1979 (1) TMI 102 - SC - Central Excise

Whether the customs authorities were justified in applying the rate of duty (to the imported goods in question) according to the rate prevalent on the date of their actual removal from the warehouse? Held that - The rate of duty, rate of exchange and tariff valuation shall be those in force on the date of actual removal of the warehoused goods from the warehouse. As it is not in dispute before us that the goods, which are the subject matter of the appeals before us, were removed from the warehouse after the Amending Order had come into force on July 7, 1966, the customs authorities and the Central Government were quite right in taking the view that the rate of duty applicable to the imported goods had to be determined according to the law which was prevalent on the date they were actually removed from the warehouse namely, the amended Sections 14 and 15 of the Act. There is therefore no force in the argument that the requirement of the amended Section 15 should have been ignored simply because the goods were imported before it came into force, or that their bills of lading or bills of entry were lodged before that date. Appeal dismissed.

Issues:
- Interpretation of Customs Act provisions regarding the determination of duty rates for imported goods.
- Application of Customs (Amendment) Ordinance, 1966, and Customs (Amendment) Act, 1966, to imported goods stored in a warehouse.
- Validity of customs authorities' decision to apply amended duty rates to goods cleared after the promulgation of the amending legislation.

Analysis:

The Supreme Court dealt with appeals arising from the dismissal of revisional applications by the Central Government regarding the assessment of duty on imported goods stored in a warehouse. The appellants imported nylon yarn and cleared it from the warehouse after the Customs (Amendment) Ordinance, 1966, came into force. They argued that the amended provisions should not apply as the goods were received and assessed before the promulgation of the Ordinance. The Court examined Sections 14 and 15 of the Customs Act, emphasizing that the rate of duty for imported goods is determined at the time of their actual removal from the warehouse. The Court noted that the amended provisions clearly specify the date for determining duty rates based on the date of removal from the warehouse. As the goods in question were cleared after the amendment came into force, the customs authorities were correct in applying the amended duty rates. The Court dismissed the appeals, upholding the application of the amended sections to the imported goods cleared after the effective date of the amendments.

In a separate case, the Court addressed a similar situation involving the clearance of imported nylon yarn after the promulgation of the Customs (Amendment) Ordinance, 1966. The appellants paid duty under protest and sought a refund of the alleged excess duty. Despite unsuccessful appeals to the Appellate Collector of Customs, they argued that the amended provisions should not apply to goods stored before the amendment. The Court reiterated the requirement of determining duty rates at the time of actual removal from the warehouse, as specified in Section 15 of the Act. Since the goods were cleared after the amendment, the customs authorities were justified in applying the amended duty rates. The Court dismissed the appeal, affirming the application of the amended sections to the imported goods cleared post-amendment.

The Court emphasized the importance of the date of actual removal of imported goods from the warehouse in determining the applicable duty rates under the Customs Act. It clarified that the provisions of Sections 14 and 15 mandate the use of rates and valuations in force at the time of clearance from the warehouse. The Court rejected arguments that the amended provisions should not apply to goods stored before the amendment, highlighting that the relevant date for duty determination is the actual removal from the warehouse post-amendment. Consequently, the Court upheld the customs authorities' decision to apply the amended duty rates to the imported goods cleared after the effective date of the amendments.

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