1994 (9) TMI 105 - SC - Customs

Constitutional validity of Section 15(1)(b) of the Customs Act, 1962 Held that - Section 12 opens with the words except as otherwise provided in this Act or any other law for the time being in force . Thus, Section 12 is subject to Section 15 among others. Secondly, Section 12 does not purport to prescribe the date with reference to which rate of duty shall be determined. It only says that duties of customs shall be levied at such rate as may be specified under the Customs Tariff Act on goods imported. It is Section 15 that prescribes the date with reference to which the rate of duty and tariff valuation of imported goods shall be determined. A reading of Sections 15, 46 and 68 makes it clear that they provide an option to the importer either to file a bill of entry for home consumption straightaway (in which case he has to pay the duty determined with reference to that date) or to file a bill of entry for warehousing. In the latter case, the goods are merely warehoused. The import duty will be levied at the rate and on the basis of the valuation determined in accordance with the provisions prevailing on the date of clearance from the warehouse for which purpose the importer has to file a fresh bill of entry for home consumption. In other words, it is the date of filing the bill of entry for home consumption which determines the rate of duty in clauses (a) and (b) of Section 15. Thus no room for any legitimate grievance of discrimination. Appeal dismissed.

Summary

Issues:
Constitutional validity of Section 15(1)(b) of the Customs Act, 1962.

Analysis:
The Supreme Court addressed a writ petition challenging the constitutional validity of Section 15(1)(b) of the Customs Act, 1962. The petitioner imported goods by sea, and the custom duty was levied based on the rate in force on the dates of clearance from the warehouse, as per Section 15(1)(b). The petitioner contested this provision's validity, arguing it was discriminatory as the duty may be higher on the clearance date than the actual import date. The Court examined Section 15, which determines the rate of duty on imported goods. It noted that the Act provides importers the option to file a bill of entry for home consumption immediately or for warehousing, with duty determined based on the clearance date in the latter case. The Court emphasized that Section 12 is subject to Section 15 and clarified that the importer's choice dictates the duty rate under Sections 15, 46, and 68. It concluded that the provision was not discriminatory, as it offered importers flexibility and followed a uniform principle, dismissing the petition.

The Court delved into the Customs Act's relevant sections, explaining the procedures for filing bills of entry for home consumption or warehousing under Sections 46 and 68. It highlighted that the duty rate is determined based on the date of clearance from the warehouse for goods warehoused initially, requiring a separate bill of entry for home consumption. The Court rejected the petitioner's argument that the duty should be based on the import date, emphasizing that the Act allows importers to choose the duty calculation method, ensuring no discrimination and potential duty savings if rates decrease. The Court emphasized the importer's discretion and the Act's uniform application, dismissing the discrimination claim and upholding the provision's validity.

In conclusion, the Supreme Court dismissed the writ petition challenging the constitutional validity of Section 15(1)(b) of the Customs Act, 1962. The Court clarified that the provision, determining the duty rate based on the clearance date from the warehouse for imported goods, was not discriminatory. It emphasized the importer's choice between immediate home consumption entry or warehousing, ensuring flexibility and uniformity in duty calculation. The Court highlighted that Section 12 is subject to Section 15, which governs duty rate determination, and rejected the petitioner's argument for duty calculation based on the import date. The petition was dismissed with no costs awarded.