1980 (3) TMI 94 - HC - Customs

Customs - Valuation - Rate of duty chargeable on importation - Liability to duty - Criteria for - Words and Phrases - Resin Acid - Relevant date - Connotation

Summary

Issues Involved:
1. Interpretation of Section 12 and Section 15 of the Customs Act, 1962.
2. Applicability of the exemption notification under Section 25(1) of the Customs Act, 1962.
3. Determination of the relevant date for the rate of duty on warehoused goods.
4. Validity of the Assistant Collector of Customs' demand for duty at 60%.

Detailed Analysis:

1. Interpretation of Section 12 and Section 15 of the Customs Act, 1962:
Section 12 of the Customs Act is the charging section, which states that duties of customs shall be levied at rates specified under the Indian Tariff Act, 1934, or any other law in force, on goods imported into or exported from India. Section 15 relates to the date for determination of the rate of duty and tariff valuation of imported goods. Section 15(1)(b) specifies that for goods cleared from a warehouse, the rate of duty applicable shall be the rate in force on the date the goods are actually removed from the warehouse.

2. Applicability of the exemption notification under Section 25(1) of the Customs Act, 1962:
The appellants imported "Disproportionated resin acid" and warehoused it. Initially, the duty was 60%, but an exemption notification issued on 12th October 1968 reduced it to 27 1/2 %. The appellants cleared the goods from December 1968 to June 1969, paying the reduced duty. The Assistant Collector of Customs later issued notices demanding the original 60% duty, which led to the appellants seeking relief through a writ petition.

3. Determination of the relevant date for the rate of duty on warehoused goods:
The court emphasized that under Section 15(1)(b), the relevant date for determining the rate of duty is the date on which the goods are actually removed from the warehouse. Since the goods were cleared after the exemption notification was issued, the appellants argued that they were entitled to the reduced duty rate. The court agreed, stating that the plain reading of the notification and the Act supports the appellants' claim. The exemption notification applies to goods imported for the manufacture of synthetic rubber, and the relevant date for duty calculation is the date of removal from the warehouse.

4. Validity of the Assistant Collector of Customs' demand for duty at 60%:
The court examined the Assistant Collector's demand for the original duty rate of 60% and found it inconsistent with the statutory provisions and the exemption notification. The court referred to a Supreme Court judgment in M/s. Prakash Cotton Mills P. Ltd. v. B. Sen & Others, which clarified that the rate of duty applicable is the one in force on the date of removal from the warehouse. This precedent supported the appellants' position that the reduced duty rate should apply.

Conclusion:
The court allowed the appeal, quashed the orders of the Assistant Collector of Customs, and directed that the appellants are entitled to withdraw the deposited amounts along with accrued interest. The respondents were ordered to pay the costs of the appellants, quantified at Rs. 1,500/- for both the trial and appellate courts. The judgment underscores the importance of the relevant date for duty calculation being the date of removal from the warehouse, aligning with the statutory provisions and the exemption notification.