1984 (10) TMI 53 - HC - Customs

Issues Involved:

1. Validity of the demand for additional duty under Section 3 of the Customs Tariff Act, 1975.
2. Validity of the demand for auxiliary duty under Section 47 of the Finance Act, 1981.
3. Determination of the applicable rates of customs duty.
4. Interpretation of the term "import" in the context of customs duty.
5. Application of exemptions and notifications under Section 25 of the Customs Act, 1962.
6. Retrospective application of customs duty rates.

Issue-wise Detailed Analysis:

1. Validity of the demand for additional duty under Section 3 of the Customs Tariff Act, 1975:

The court upheld the demand for additional duty, emphasizing that Section 3 of the Customs Tariff Act charges additional duty on imported articles equal to the excise duty for the time being leviable on like articles if produced or manufactured in India. The court noted that the relevant notifications enhancing the additional duty to 40% plus 10% SED were effective from 27-3-1981, and the bill of entry was filed on 28-3-1981, making the petitioner liable for the enhanced duty.

2. Validity of the demand for auxiliary duty under Section 47 of the Finance Act, 1981:

The court confirmed the validity of the demand for auxiliary duty, noting that auxiliary duty at 5% became payable from 27-3-1981 as per the relevant notification. The court rejected the petitioner's claim for a refund of Rs. 1,62,517.11, which was alleged to have been excess paid as auxiliary duty, as the duty was correctly assessed based on the rates in force on the date of the bill of entry.

3. Determination of the applicable rates of customs duty:

The court clarified that duties of customs are levied based on the rates specified under the Customs Tariff Act, 1975, or any other law for the time being in force, on goods imported into or exported from India. The date for determination of the rate of duty is specified under Section 15 of the Customs Act, 1962. The court held that the applicable rates are those in force on the date the bill of entry is presented, which in this case was 28-3-1981.

4. Interpretation of the term "import" in the context of customs duty:

The court rejected the argument that the importation of goods materialized when the vessel entered Indian territorial waters. It held that the act of importation for the purpose of levy does not materialize until the goods have been brought into the port of discharge, the vessel is granted "entry inwards," and the bill of entry is presented. The court emphasized that the levy of duty is made with reference to the point of time when the bill of entry is presented.

5. Application of exemptions and notifications under Section 25 of the Customs Act, 1962:

The court discussed various notifications issued under Section 25 of the Customs Act, which exempted or altered the duty payable on aluminum ingots. It noted that the relevant notifications enhancing the rates by cancellation or reduction of the exemptions granted under earlier notifications were effective from 27-3-1981. The court held that the enhanced rates were applicable as the bill of entry was presented on 28-3-1981.

6. Retrospective application of customs duty rates:

The court dismissed the contention that the rates had been applied retrospectively. It clarified that the rates applied were those in force on the date of filing the bill of entry, i.e., 28-3-1981, as specified under Section 15 of the Customs Act. The court emphasized that the legislative intent is to charge the goods with the duty payable on the relevant date and not on any anterior date.

Conclusion:

The court concluded that the duties payable by the petitioner were those in force on the date of filing the bill of entry, i.e., 28-3-1981. The appeal was dismissed, and the impugned notices were upheld. The parties were directed to bear their respective costs.

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