2020 (1) TMI 326 - HC - Customs

Prohibition on seeking assessment/reassessment of vessel - section 17 of the Customs Act, 1962 - whether the levy of the penalty under order, dated 06.07.2018, and the deposit of the same by the petitioner absolved the petitioner from discharging of all its liabilities in respect of the import of the vessel, on 28.05.2012, into Indian waters? - whether the petitioner is not required to file the manual bill of entry at any time later and is, therefore, entitled to withdraw the manual bill of entry having filed, on 10.07.2018? - HELD THAT - The imposition of the penalty or a direction to the importer to pay charges is for contravention of the provisions of Sections 30 46 of the Act, which is prescribed, and not for absolving or discharging the importer from the liability to present a bill of entry in the prescribed form. Therefore, the contention of the petitioner that once penalty is imposed and deposited, the petitioner is not required to present manually the bill of entry and, therefore, the respondents ought to have considered the request of the petitioner for withdrawal of the manual bill of entry, which was presented for regularisation, needs no countenance. Whether the customs authorities are entitled to assess the impugned vessel to duty, on the premise that the bill of entry is filed in the year 2018, and also collect duties and tax prevalent in 2018 despite the fact that the vessel is admittedly imported into the Indian waters on 28.05.2012 more particularly when the customs duties applicable at that point of time viz., 28.05.2012 were nil and when the integrated tax in terms of Section 3(7) of the Customs Tariff Act, was a levy introduced only w.e.f 01.07.2017? - HELD THAT - Whether the bill of entry has been presented before the date of entry or after the date of entry, the bill of entry shall be deemed to have been presented on the date of actual entry inwards and the said date of entry shall be reckoned as the relevant date for application of the law prevalent as on that date. The law prevalent as on the date of the import of the vessel in the case on hand would only be applicable and that merely because the bill of entry was not filed at the inception in the year 2012 and the manual bill of entry was filed in the year 2018, that is, about six years after the actual import of goods, the duty and tax cannot be levied based on the law prevalent on the date of the filing of manual bill of entry more particularly as the import of the vessel in May, 2012, is not in dispute and as the vessel ran after getting necessary port clearances on number of occasions is also not in dispute - As admittedly the duties were nil at the time of import in May, 2012, and the integrated tax in terms of Section 3(7) of Customs Tariff Act, 1975 was introduced w.e.f from 01.07.2017, we hold that the petitioner is entitled to the reliefs claimed in the writ petition. Petition allowed.

Summary

Issues Involved:
1. Whether the petitioner is absolved from discharging all its liabilities after the levy and deposit of penalties for the import of the vessel in 2012.
2. Whether the customs authorities can assess the vessel to duty based on the law prevalent in 2018 despite the vessel being imported in 2012 when applicable customs duties were 'nil'.

Issue-wise Detailed Analysis:

1. Penalties and Liabilities:
The petitioner contended that the penalties imposed and deposited under Sections 30 and 46 of the Customs Act, 1962, for non-filing of the bill of entry absolved them from further liabilities. The petitioner argued that the manual bill of entry filed on 10.07.2018 was for procedural regularisation and should be withdrawn as the importation was regularised upon payment of penalties. However, the court noted that the imposition of penalties does not discharge the importer from the legal obligation to file a bill of entry. The court emphasized that penalties were for contraventions of Sections 30 and 46, not for absolving the importer from filing the required documentation. Therefore, the petitioner's contention that they are not required to present a manual bill of entry post-penalty was rejected.

2. Assessment of Duties Based on 2018 Law:
The petitioner argued that the customs authorities' attempt to assess the vessel according to the law prevalent in 2018 was without jurisdiction since the vessel was imported in 2012 when customs duties were 'nil' and the integrated tax under Section 3(7) of the Customs Tariff Act, 1975, was introduced only from 01.07.2017. The court referred to Section 15 of the Customs Act, which states that the rate of duty applicable to imported goods is based on the date of the bill of entry. However, the court found that the law prevalent at the time of the vessel's import in 2012 should apply, not the law in 2018 when the bill of entry was filed. The court cited precedents, including the High Court of Judicature at Bombay's order in SEAMEC Limited and the CESTAT decision in Samson Maritime Ltd., which supported the view that duties are determined based on the law at the time of import, not the date of filing the bill of entry.

The court concluded that the customs authorities could not assess the vessel based on the 2018 law, as the vessel was imported in 2012 when the duties were 'nil'. The court emphasized that the date of import, not the date of filing the bill of entry, is the relevant date for determining applicable duties.

Conclusion:
The court allowed the writ petition, ruling that the petitioner is entitled to the reliefs claimed. The customs authorities were prohibited from assessing/re-assessing the vessel based on the law prevalent in 2018. The court held that the law applicable at the time of the vessel's import in 2012, when the duties were 'nil', should apply. The writ petition was deemed maintainable, and the interim order putting on hold further proceedings was upheld.