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1999 (7) TMI 69 - SC - CustomsLevy of customs duty under the provisions of the Sea Customs Act Held that - Duty has to be paid with reference to the relevant date as per Section 15 of the Customs Act. We, accordingly, allow these appeals and set aside the judgment of the Bombay High Court wherein held that as the goods were exempt from payment of tax on the day when they entered the territorial waters no customs duty was payable. Appeal allowed.
Issues involved:
Levy of customs duty under the Sea Customs Act based on the exemption notification issued by the Central Government. Analysis: The judgment in question pertains to the challenge against a Full Bench judgment of the Bombay High Court regarding the levy of customs duty under the Sea Customs Act. The case revolved around goods entering India's territorial waters and being stored in a bonded warehouse, initially exempt from customs duty under a government notification. However, when the goods were to be removed from the warehouse, the exemption was rescinded. The respondents argued that as the goods were exempt from duty when they entered the territorial waters, no duty was payable upon removal from the warehouse. The Bombay High Court, relying on its previous decision, ruled in favor of the respondents, stating that no customs duty was payable. The Supreme Court, in its analysis, referred to two of its prior decisions dealing with similar contentions. It clarified that the relevant date for determining the duty payable is when the bill of entry for the goods is presented under Section 46, or in the case of warehoused goods, the date of actual removal from the warehouse. The Court highlighted that the date of entry inwards and the date of arrival of the vessel into port are crucial for determining the levy of customs duty, not the date the ship entered territorial waters. The Court emphasized that the relevant date for fixing the duty rate is as per Section 15 of the Customs Act. Based on the precedents and legal provisions, the Supreme Court concluded that the judgment under appeal did not correctly interpret the law. It held that duty must be paid with reference to the relevant date specified in the Customs Act. Consequently, the Court allowed the appeals and set aside the Bombay High Court judgment, leading to the dismissal of the writ petitions filed by the respondents. No costs were awarded in this matter.
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