1986 (6) TMI 129 - AT - Customs

Summary

Issues Involved:
1. Whether the vessel 'Banglar Progoti' entered the territorial waters of India off Madras port before 1.1.1979.
2. Applicability and interpretation of the Madras High Court and Bombay High Court judgments.
3. The relevance of the exemption notification and its withdrawal.
4. The concept of entry into territorial waters under Sections 11 and 12 of the Customs Act.
5. The plea of promissory estoppel.

Issue-wise Detailed Analysis:

1. Entry of Vessel into Territorial Waters:
The appellants argued that the vessel 'Banglar Progoti' had entered the territorial waters of India off Madras Port before 1.1.1979, citing several circumstances, including the filing of the import manifest and bills of entry before the vessel's arrival and the shipmaster's message indicating the ship's proximity to Madras. However, the Tribunal concluded that these circumstances did not necessarily establish that the ship entered the territorial waters off Madras port. The Customs Act allows for the filing of import documents before the vessel's arrival to expedite customs formalities. Previous Tribunal orders confirmed that the ship did not enter the territorial waters off Madras before 1.1.1979, and there was no justification to depart from this view.

2. Applicability and Interpretation of High Court Judgments:
The appellants contended that the Madras High Court's judgment in M. Jamal & Co. vs. Union of India did not consider the full Bench judgment of the Bombay High Court in Apar Private Limited's case. They argued that the Madras High Court erred in using the General Clauses Act to define "India" under Section 12(1) of the Customs Act, contrary to the Supreme Court's principle in the Gramophone Co. of India's case. The Tribunal noted that it was not the appropriate forum to address these arguments and reaffirmed its previous conclusion that the goods did not enter the territorial waters off Madras port before 1.1.79.

3. Exemption Notification and Its Withdrawal:
The Tribunal discussed the relevance of the exemption notification and its withdrawal. It noted that previous Tribunal decisions were based on the material on record, leading to the conclusion that the vessel 'Banglar Progoti' did not enter the territorial waters off Madras port before 1-1-1979. The Tribunal emphasized that the goods entered the territorial waters at Calcutta during the exemption period but were transhipped to Madras, where they arrived after the exemption was withdrawn. The Tribunal held that the entry of goods into the territorial waters at the actual port of unloading for clearance through customs is the relevant date, not the date of their entry into the territorial waters at the first port of call in India.

4. Concept of Entry into Territorial Waters under Sections 11 and 12:
The appellants argued that the concept of entry into territorial waters should be consistent for Sections 11 and 12 of the Customs Act. The Tribunal disagreed, explaining that the importer is liable to pay duty only upon filing a bill of entry for clearance of goods under Section 46. In contrast, prohibitions or restrictions on import attach to goods the moment they enter territorial waters, making them liable for confiscation and penalties under Section 111(d) and Section 112. The Tribunal concluded that the analogy between Sections 11 and 12 was misconceived.

5. Plea of Promissory Estoppel:
The Tribunal addressed the plea of promissory estoppel, noting that it had been dealt with in a previous order. The Tribunal rejected the analogy drawn by the appellants to relaxations granted by the Chief Controller of Imports and Exports for prohibited goods, emphasizing that such relaxations are administrative and do not apply to duty liability. The Tribunal reiterated that duty liability is governed by the Customs Act provisions.

Conclusion:
The Tribunal dismissed the appeals, finding no reason to differ from its previous decisions on similar issues. The vessel 'Banglar Progoti' did not enter the territorial waters off Madras port before 1.1.1979, and the goods were not exempt from duty based on the exemption notification in force at the time of their entry into territorial waters at Calcutta. The appellants' arguments regarding the interpretation of high court judgments, the concept of entry into territorial waters, and promissory estoppel were not accepted.