2025 (2) TMI 428 - AT - Customs

Determination of the applicable customs duty rate on imported goods - relevant date for rate of duty - whether the duty rate should be based on the date the vessel entered Indian territorial waters or the date of entry inwards at the specific port where the goods were unloaded? - HELD THAT - There is no doubt that the goods assume the nature of imported goods the moment they enter into territorial waters of India and thus become leviable to duty on such import but the machinery provision as contained in Section 15 indicates as to how assessment is to be done and duty shall be calculated when goods are required to be subjected to duty. Reading of Section 15 along with the proviso makes it clear that in case filing of Bill of Entry precedes the date of entry inwards of the vessel the Bill of Entry shall be deemed to have been presented on the date of such entry inwards. Entry inwards as has been correctly pointed out by the Departmental Representative is required to be as per process dictated in Section 30 and Section 31 of the Customs Act 1962. From plain reading of Section 31 it is clear that grant of entry inwards for any vessel is a port specific documentation and is required to be done at each port by the proper officer. Expression the proper connotes proper officer as authorised specific officer at each port. The goods cannot be unloaded at any port unless such proper officer has granted entry inwards at the specific port. This Court has also examined the matter in the light of the decision cited by both sides as well as the relevant statutory provisions the judgments cited by the appellants do not deal with situation where entry inwards are granted at two different ports at two different points of time. As is emanating from the facts of this case this Courts finds that the submission made by the appellants proceed on the wrongful basis that entry into territorial waters and the first entry inwards granted at the first touched port will dictate rate of duty and shall be considered as date of entry inwards for all subsequent ports it touches. This Courts finds that there is no statutory basis to support such an argument and rather the plain reading of the statutory provision specifically Section 31 supports the argument of the department that entry inwards at the respective port and not the first port shall determine the rate of duty applicable. This Court therefore finds that the impugned order is well reasoned and deserves to be maintained. Conclusion - The duty rate is determined by the date of entry inwards at the specific port of unloading. The assessment of duty at 7.5% as per the entry inwards at Pipavav Port maintained. Order of Commissioner (Appeals) is upheld and appeal of the party is rejected.

The legal judgment revolves around the determination of the applicable customs duty rate on imported goods, focusing on the interpretation of the relevant date for duty calculation under the Customs Act, 1962. The core issue is whether the duty rate should be based on the date the vessel entered Indian territorial waters or the date of entry inwards at the specific port where the goods were unloaded.

Issues Presented and Considered:

The primary legal question considered is the determination of the relevant date for the calculation of customs duty on imported goods when an advance Bill of Entry is filed. Specifically, the issue is whether the duty rate should be based on the date the vessel enters Indian territorial waters or the date of entry inwards at the port of unloading.

Issue-Wise Detailed Analysis:

Relevant Legal Framework and Precedents:

The legal framework is centered around Section 15 of the Customs Act, 1962, which outlines the determination of the rate of duty and tariff valuation for imported goods. The proviso to Section 15(1) specifies that if a Bill of Entry is presented before the date of entry inwards of the vessel, the Bill of Entry is deemed to have been presented on the date of such entry inwards. The case references include Pride Foramer v. Union of India, Aban Loyd Chiles Offshore Ltd v. UoI, and M.S. Shawhney Asstt. Collector of Customs and Another v. Sylvania and Laxman Limited, which discuss the significance of entry into territorial waters and the applicability of duty rates.

Court's Interpretation and Reasoning:

The Tribunal interpreted Section 15 in conjunction with Sections 30 and 31 of the Customs Act. It emphasized that the entry inwards is a port-specific process, and the duty rate is determined based on the date of entry inwards at the specific port where the goods are unloaded. The Tribunal rejected the appellant's argument that the entry into territorial waters should dictate the duty rate, citing the statutory requirement for entry inwards at each port.

Key Evidence and Findings:

The evidence included the timeline of the vessel's arrival at different ports, the filing of the Bill of Entry, and the customs procedures followed. The Tribunal found that the entry inwards at Pipavav Port on 01/03/2016 was the relevant date for determining the duty rate, as per the statutory provisions.

Application of Law to Facts:

Applying the law to the facts, the Tribunal concluded that the duty rate applicable was 7.5% as of 01/03/2016, the date of entry inwards at Pipavav Port. The appellant's reliance on previous judgments was deemed inapplicable because those cases did not address situations involving multiple ports of entry.

Treatment of Competing Arguments:

The Tribunal considered the appellant's argument that the entry into territorial waters should determine the duty rate but found it unsupported by the statutory language. The department's argument that entry inwards is port-specific and dictates the duty rate was upheld based on the clear provisions of the Customs Act.

Conclusions:

The Tribunal concluded that the appellant's claim for a refund based on a 5% duty rate was unjustified, as the correct duty rate was 7.5% on the date of entry inwards at Pipavav Port.

Significant Holdings:

The Tribunal upheld the order of the Commissioner (Appeals), confirming that the duty rate is determined by the date of entry inwards at the specific port of unloading. The decision reinforces the principle that entry inwards is a port-specific determination, and the duty rate is applicable based on this date, not the date of entry into territorial waters.

The Tribunal's decision is well-reasoned and aligns with the statutory framework, emphasizing the importance of port-specific entry inwards in determining customs duty rates. The appeal was rejected, maintaining the assessment of duty at 7.5% as per the entry inwards at Pipavav Port.

← Previous Next →