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Issues:
- Appeal against the order upholding rejection of claim for refund of basic customs duty on imported goods. - Interpretation of exemption notification in force during the importation of goods. - Determination of applicable rate of duty based on the date of entry inwards of the vessel. Analysis: The appeal was filed against the order upholding the rejection of the claim for refund of basic customs duty on a consignment of Polynosic Staple Fibre imported by the appellants. The Collector of Customs (Appeals) upheld the Assistant Collector's order rejecting the claim for refund based on the grounds that the vessel by which the goods were imported was granted entry inwards on a date when there was no exemption in force regarding the levy of basic customs duty. The exemption notification in question was Customs Notification No. 25, dated 31-1-1978, which lapsed on 31-12-1978 and was revived only on 5-1-1979 by Customs Notification No. 6/79. The Customs authorities levied basic Customs duty at 100% ad valorem under Heading No. 56.01/04 of the First Schedule to the Customs Tariff Act. The appellants contended that the goods did not attract the levy of basic Customs duty as they were exempted on the date they entered the territorial waters of India. The ship entered the territorial waters on 18-12-1978 and got berthed in the Anchorage on 30-12-1978, with the papers filed on 1-1-1979. The central issue revolved around the interpretation of the exemption notification in force during the importation of goods and the determination of the applicable rate of duty based on the date of entry inwards of the vessel. The appellants relied on a principle established by a full Bench of the Bombay High Court in a previous case, emphasizing that goods entering territorial waters when an exemption notification is in force should not be charged customs duty even if the notification is no longer in force at the time of bill entry presentation. However, a later judgment by the Calcutta High Court presented a conflicting view, stating that the benefit of exemption ceases if the exemption is no longer in force at the time of bill entry presentation. The Calcutta High Court held that goods become leviable to duty if the exemption notification is withdrawn before the actual clearance of goods for home consumption. The Tribunal considered these conflicting judgments and decided to follow the Calcutta High Court's ruling. The date of entry inwards of the vessel, 1-1-1979, was deemed relevant for determining the applicable rate of duty. As the pre-existing exemption notification had lapsed on 31-12-1978 and was not in force on 1-1-1979, the Tribunal upheld the impugned order, concluding that the goods were correctly charged basic customs duty and dismissing the appeal.
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