1981 (9) TMI 118 - HC - Customs

Summary

Issues Involved:
1. Jurisdiction and applicability of the exemption notification.
2. Non-application of mind and violation of principles of natural justice.
3. Enforcement of the bond beyond its terms.
4. Determination of the relevant date for the rate of duty.

Issue-wise Detailed Analysis:

1. Jurisdiction and Applicability of the Exemption Notification:
The petitioners contended that they were entitled to the advantage of the exemption notification dated March 30, 1974, as the consignment crossed into Indian Territorial Waters on June 17, 1974, and the Bill of Entry was presented on June 29, 1974. The Customs Authorities, however, claimed that the Bill of Entry was presented on July 2, 1974, after the expiry of the notification on July 1, 1974. The court examined Sections 12 and 15 of the Customs Act, 1962, and referred to the Division Bench judgment in M.S. Shawhney v. Messrs. Sylvania and Laxman Ltd., which distinguished between the concepts of chargeability and quantification of customs duty. The court concluded that the exemption was available on the date of import into the territorial waters, and the petitioners were entitled to the notification's benefit despite the Bill of Entry being presented after the notification's expiry.

2. Non-application of Mind and Violation of Principles of Natural Justice:
The petitioners argued that the Assistant Collector's order indicated non-application of mind and violated principles of natural justice. The court did not find substantial evidence to support this claim, focusing instead on the primary issue of the exemption notification's applicability.

3. Enforcement of the Bond Beyond Its Terms:
The petitioners contended that the order to enforce the bond exceeded its terms. The court did not delve deeply into this issue, as the primary determination regarding the exemption notification rendered this point less significant.

4. Determination of the Relevant Date for the Rate of Duty:
The court examined whether the relevant date for determining the rate of duty was the date of import or the date of presentation of the Bill of Entry. The court referred to the Supreme Court judgment in M/s. Prakash Cotton Mills (P) Ltd. v. B. Sen and others, which emphasized the date of removal from the warehouse for determining the rate of duty. However, the court distinguished this case from the present one, noting that the Supreme Court did not address the issue of exemption notifications. The court upheld the Division Bench's view that the exemption available on the date of import into territorial waters could not be denied due to the Bill of Entry's later presentation.

Conclusion:
The court ruled in favor of the petitioners, holding that they were entitled to the exemption notification's benefits as the goods were imported during its validity period. The demand notice and the impugned order were declared illegal and unjust. The rule was made absolute, granting relief to the petitioners without any order as to costs.