1992 (12) TMI 53 - SC - Customs

Writ of mandamus or any appropriate directions to seek that the component/parts of ball bearings imported from foreign supplier M/s. Impex Matel Lucka Sarszawa (Poland) are liable to excise duty prevalent as on February 20 1989 and to release the goods on payment thereof or in the alternative to declare Section 15(l)(a) ultra vires of Arts. 14 19(l)(g) 21 265 and 300A of the Constitution Held that - The relevant date under Section 15(l)(a) is the date on which entry inwards after delivery of import manifest was granted to discharge the cargo for the purpose of the levy of the customs duty and rate of tariff. The contention therefore that the ship entered Indian territorial waters on February 20 1989 and was ready to discharge the cargo is not relevant for the purpose of Section 15(1) read with Sections 46 and 31 of the Act. The prior entries regarding presentation of the bill of entry for clearance of the goods on February 27 1989 and their receipt in the appraising section on February 28 1989 also are irrelevant. The relevant date to fix the rate of customs duty therefore is March 2 1989. The rate prevailed as on that date would be the duty to which the goods imported are liable to the impost and the goods would be cleared on its payment in accordance with the rate of levy of customs prevailing as on March 2 1989. If the interim directions of the court are taken to be substitute for the statutory operation of the relevant provisions the interest of the revenue would be prejudicially affected and the fraudulent conduct and acts done in furtherance thereof would get legitimacy to avoid payment of duty and tariff prevailing as on either dates on which the bill of entry was presented or the goods are actually removed from the warehouse. It would be easy for an importer to have the goods imported get an order from the court to keep them in private warehousing till either the rate of tariff is reduced or the price of the goods are substantially increased by creating artificial scarcity in the market which would jeopardise the economy of the country. Accordingly we are of the considered opinion that the importer cannot be permitted to circumvent the law through judicial process which is otherwise impermissible under the Act. The contention of the petitioner that Section 15(1) of the Act is ultra vires of the provisions of the Constitution is no longer res integra as per decision in M. Jhangir Bhatusha etc. etc. v. Union of India & Ors. etc. etc. 1989 (5) TMI 61 - SUPREME COURT OF INDIA . Appeal dismissed.

Summary

Issues:
1. Determination of the proper excise duty rate on imported goods.
2. Interpretation of Sections 15, 31, and 46 of the Customs Act, 1962.
3. Consideration of subsequent court orders and their impact on duty rates.
4. Examination of the validity of Section 15(1) of the Act in light of the Constitution.

Analysis:

1. The primary issue in this case revolves around the determination of the excise duty rate applicable to imported goods. The petitioner argued that the duty should be based on the rate prevailing on the date the goods were ready for discharge in Indian waters, i.e., February 20, 1989. However, the court held that as per Section 15(1) of the Customs Act, the duty rate is determined based on the date of entry inwards after the delivery of the import manifest, which in this case was March 2, 1989. The court emphasized that the relevant date for fixing the duty rate is crucial, and in this instance, it was March 2, 1989.

2. The interpretation of Sections 15, 31, and 46 of the Customs Act played a significant role in determining the duty rate for the imported goods. Section 15 outlines the rate of duty and tariff valuation for imported goods, with specific provisions for goods entered for home consumption or cleared from a warehouse. Section 31 regulates the unloading of imported goods from vessels, emphasizing the importance of entry inwards. Section 46 mandates the importer to make an entry of goods by presenting a bill of entry, with provisions for different scenarios. The court's analysis of these sections guided the determination of the duty rate in this case.

3. The court also considered subsequent court orders directing the release of goods under certain conditions and subsequent representations to reduce the duty rate. The petitioner argued that these orders could influence the duty rate determination under Section 15(1)(b) of the Act. However, the court held that the statutory declarations required under Sections 15(1)(a) and 15(1)(b) are determinative, and court orders cannot substitute the statutory compliance mandated by the Act. The court emphasized that allowing such circumvention through judicial processes would be detrimental to revenue interests and the economy.

4. Lastly, the validity of Section 15(1) of the Act in light of the Constitution was raised by the petitioner. The court referred to a previous Constitution Bench decision upholding the validity of Section 15(1) and dismissed the contention that it was ultra vires of the Constitution. The court reiterated that the government could consider the case sympathetically but upheld the validity of the statutory provisions. The writ petitions were ultimately dismissed without costs, concluding the judgment.

This detailed analysis outlines the court's reasoning and interpretation of the relevant legal provisions in determining the excise duty rate on imported goods and addressing the various contentions raised by the petitioner.