1986 (6) TMI 130 - AT - Customs

Summary

Issues Involved:
1. Entry of the vessel into the territorial waters of India.
2. Application of exemption notifications.
3. Reference to judgments of the Madras and Bombay High Courts.
4. Relevance of the territorial waters entry date for duty exemption.
5. Concept of promissory estoppel.

Issue-wise Detailed Analysis:

1. Entry of the vessel into the territorial waters of India:
The appellants argued that the vessel "Bangla Progoti" had entered the territorial waters of India off Madras Port based on several circumstances, including the filing of the import manifest and bills of entry before the arrival of the vessel and a message from the ship's Master. However, the Tribunal concluded that these circumstances did not necessarily prove that the vessel entered the territorial waters off Madras Port before 1.1.1979. The Customs Act allows for the filing of import manifests and bills of entry before the arrival of the vessel, which is a common practice to expedite customs formalities and minimize demurrage.

2. Application of exemption notifications:
The Tribunal had previously decided similar appeals where the goods did not enter the territorial waters of India off Madras port during the currency of the exemption notification. The goods were carried to Calcutta and entered the territorial waters there on 31-12-1978, during the currency of the exemption notification. However, the goods were not intended for import at Calcutta but were transshipped to Madras, arriving after the exemption had been withdrawn. The Tribunal held that the entry of the goods into the territorial waters at the actual port of unloading for clearance through customs is the relevant date, not the entry date at the first port of call in India.

3. Reference to judgments of the Madras and Bombay High Courts:
The appellants cited the Madras High Court judgment in M. Jamal & Co. vs. Union of India and others and the Bombay High Court judgment in Apar Private Limited's case. The Tribunal noted that it is not the appropriate forum to address arguments regarding the Madras High Court's judgment. The Bombay High Court had held that if goods are wholly exempt on the date they enter the territorial waters, any subsequent withdrawal of the exemption does not affect their duty status. However, the Tribunal distinguished the present cases from the Bombay High Court cases, as the goods in the present cases were not intended for import at Calcutta but were transshipped to Madras.

4. Relevance of the territorial waters entry date for duty exemption:
The Tribunal emphasized that the entry of goods into the territorial waters at the actual port of unloading for clearance through customs is the relevant date for determining duty exemption. The analogy drawn by the appellants between sections 11 and 12 of the Customs Act was deemed misconceived. The importer is called upon to pay duty only upon filing a bill of entry for clearance, whereas prohibitions or restrictions attach to the goods the moment they enter the territorial waters.

5. Concept of promissory estoppel:
The Tribunal addressed the plea of promissory estoppel, stating that liability to duty is governed by the provisions of the Customs Act. The analogy drawn by the appellants to relaxations granted by the Chief Controller of Imports and Exports was not applicable. Such relaxations are administrative measures to honor trade contracts, whereas duty liability is a statutory requirement.

Conclusion:
The Tribunal dismissed the appeals, upholding the view taken in similar previous cases that the goods did not enter the territorial waters off Madras port during the currency of the exemption notification and that the entry date at the actual port of unloading for customs clearance is the relevant date for duty exemption.