1991 (3) TMI 145 - HC - Customs

Customs - Additional duty of customs and auxiliary duty of customs - Words and phrases - Retrospective , meaning of

Summary

Issues Involved:
1. Relevant point of time for levy and collection of additional duty of customs.
2. Applicability of the rate of duty at the time of goods entering territorial waters versus clearance from the bonded warehouse.
3. Legality of retrospective application of duty rates.
4. Interpretation of statutory provisions regarding customs duty and auxiliary duty.

Issue-wise Detailed Analysis:

1. Relevant Point of Time for Levy and Collection of Additional Duty of Customs:
The primary issue is determining the relevant point of time for the levy and collection of additional duty of customs. The petitioner contends that the taxable event occurs when the goods enter the territorial waters of India, thus the duty rate applicable should be the one prevailing at that time. However, the court concludes that the rate of duty applicable is the one prevailing at the time of clearance of the goods from the bonded warehouse. This conclusion is based on the interpretation of Section 15 of the Customs Act, 1962, which specifies that the rate of duty shall be the one in force on the date the warehoused goods are actually removed from the warehouse.

2. Applicability of the Rate of Duty at the Time of Goods Entering Territorial Waters Versus Clearance from the Bonded Warehouse:
The petitioner argues that the rate of duty should be the one prevailing when the goods enter the territorial waters of India. The court, however, relies on the provisions of the Customs Act, 1962, and the Customs Tariff Act, 1975, which indicate that the rate of duty is determined at the time of clearance from the bonded warehouse. The court references the Supreme Court's decision in Prakash Cotton Mills (P) Ltd. v. B. Sen, which affirms that the rate of duty is applicable as on the date of actual removal of the warehoused goods from the warehouse.

3. Legality of Retrospective Application of Duty Rates:
The petitioner contends that applying the rate of duty prevailing at the time of clearance from the bonded warehouse amounts to retrospective application, which is impermissible. The court dismisses this argument, clarifying the meaning of 'retrospective' as per CRAIES on Statute Law and the Supreme Court's interpretation in D.G. Gouse & Co. v. State of Kerala. The court notes that the duty is not retrospective merely because a part of the requisites for its action is drawn from a time antecedent to its passing. The court further explains that there is no vested right under any existing law that the goods imported into India shall not be subjected to tax in the future after entering the territorial waters.

4. Interpretation of Statutory Provisions Regarding Customs Duty and Auxiliary Duty:
The court examines the statutory provisions under the Customs Tariff Act, 1975, and the Finance Act, 1978, which impose additional duty and auxiliary duty, respectively. It is clarified that these duties are supplementary to the Customs Act, 1962, and must be applied in conjunction with it. The court also references the Supreme Court's decision in Khandelwal Metal & Engg. Works v. Union of India, which establishes that Section 3(1) of the Customs Tariff Act is not an independent charging section and that the additional duty is an extension of customs duty.

The petitioner relies on several Bombay High Court decisions supporting their view that the rate of duty should be the one prevailing when the goods entered the territorial waters. However, the court does not agree with these decisions, noting that they did not consider the Supreme Court's ruling in Prakash Cotton Mills (P) Ltd. v. B. Sen and other relevant cases.

Conclusion:
The court rejects the petition, concluding that the rate of duty applicable is the one prevailing at the time of clearance from the bonded warehouse, not when the goods enter the territorial waters of India. The petitioner's arguments regarding the retrospective application of duty rates and the interpretation of statutory provisions are found to be without merit. The petition is dismissed, and the rule is discharged.