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TMI Blog2010 (2) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... ods are imported by way of Bill of Lading. As in the present case the tax has already been paid on bill of lading, there is no question of making any further tax on the same. If the bill of lading and the bill of entry are in the same name and if the person whose name is in the bill of lading is taking the goods, no separate stamp duty can be levied as the stamp duty is already paid under the Central Act. Again imposing tax on the very same person would amount to double taxation on the same person. However, if the goods are transferred to a third person the bill of entry will come into play and the third party is required to make the payment in accordance with Article 24. Therefore, no fault can be found in Article 24 and even the Circulars issued on the basis of the said Article. Thus if the bill of lading and the bill of entry are in the same name and if the person whose name is in the bill of lading is taking the goods, no separate stamp duty can be levied as the stamp duty is already paid under the Central Act. Again imposing tax on the very same person would amount to double taxation on the same person. However, if the goods are transferred to a third person the bill of ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of loading or unloading of goods under Section 8 of the Customs Act, 1962. The petitioners pay wharfage charges to the respondent no. 2 at the prescribed rates for loading and unloading of goods at the said port. 2.3 The respondent no. 1 issued a Circular dated 29th March 2006 stating, inter alia, that stamp duty at the rate of Re. 1/- per Rs. 1000/- or part thereof is payable on goods imported through ports. Thereafter the respondent no. 3 issued a Circular stating, inter alia, that No Demand Certificate in respect of the vessel arrived at Magdalla (Surat) Port will be issued after submission of clearance from Registrar of Stamp Duty regarding payment of stamp duty on the entire imported cargo and that NDC will not be issued by the said office to the vessels of import cargo without receipt of Stamp Duty Clearance . 2.4 Thus, No Due Certificate would be issued to the vessel only upon payment of the stamp duty. There are vehicles of the petitioners unloading cargo, the delivery of which is done on the basis of Bill of Lading. If these vessels are detained for want of No Due Certificate as contemplated in the Circular dated 10th January 2007, due to non-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argo to the petitioners at the said captive jetty, no delivery order is issued. In fact the issuance of a delivery order is completely inconsistent with the manner in which delivery is effected at the captive jetty. Delivery is not effected to the Port authorities but directly to the petitioners. There is no bailment or entrustment of goods by the carrier to the Port. Consequently, the question of subsequent delivery of goods by the Port Authorities to the petitioners does not arise. The carrier is not the Bailor and the Port Authority is not the Bailee and there is no bailment to the Port. The manner in which the actual delivery is effected is inconsistent with the issuance of the delivery order. The respondents have not been able to point out a single case where a delivery order has in fact been issued. 3.4 That the delivery of cargo against a bill of lading/undertaking to produce a Bill of Lading is a universally recognized and accepted practice. 3.5 That since the only document/instrument involved in the process of delivery is a bill of lading, any levy of stamp duty can only be with reference to this document/instrument. In so far as a bill of lading is concerned, it is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... using to present to the proper officer a bill of entry in the prescribed form. The question, which arises for consideration, therefore, is whether the vessels in the two cases before us are goods brought into India for home consumption? Mixed up with this question is the question whether a transhipper is an ocean going vessel? We will first consider the question whether a vessel is goods so as to attract Sec. 46(1) of the Customs Act. By definition a vessel, aircraft or vehicle is included among goods, vide Sec. 2(22). But according to Sri Setalvad, notwithstanding the definition, the scheme of Chapters VI and VII of the Customs Act and the context in which the expression goods is used in section 46 of the Act require the expression to be interpreted for the purpose of Section 46(1) as excluding a vessel, aircraft or vehicle. In answer to a direct question by us, Shri Setalvad canvassed that if a vessel, aircraft and vehicle are required to be excluded from the meaning of the expression goods in section 46(1) of the Act, he was unable to suggest what other purpose was to be served by the inclusive definition of the expression which expressly brought within its shadow vessel, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the petitioners were called upon to furnish the Bill of Entry. In this background, petitioners grievance about the demand of filing of Bill of Entry is not a prejudicial act which would require interference by the High Court under Article 226 of the Constitution. 4.3 In the case of State of Andhra Pradesh v. K. Shree Ramamurthy, reported in AIR 1962 SC 1585 it is held as under : Where on receiving a part of the purchase price, the Mills issue delivery orders directing the delivery of goods as per contract and these are handed over to the dealer buyer on his honouring a hundi for the value of the goods, but the buyer, instead of himself taking delivery of the goods, kept ready, from the godowns of the Mills, endorses the delivery order which passes through several hands before the ultimate holder of it presents it to the Mills and obtains delivery of the goods from them, the transaction so entered into by the buyer is not mere sale or transfer of delivery order but is a sale of goods so as to bring them to charge under S.3 of the Madras General Sales Tax Act, 1939. A delivery order is a document of title to goods by virtue of S. 2(4) of the Sale of Goods Act, 1930 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reads as under : 23. The aforesaid definition makes it clear that a document which either creates any right or liability is created, transferred, extended, limited, extinguished or recorded can fall within the category of instrument. Even if no such right or liability is created, transfer, limited, extended, extinguished or recorded in fact but purports to create transfer or record any right or a liability it may invite attraction of stamp duty. But, obviously, the right or liability referred to under above definition can only relate to the right or liability in respect of which the instrument has been executed. If any transaction has been carried out between two parties without execution of an instrument, the provisions of the Stamp Act cannot be attracted on the assumption that in order to create, transfer, limit, extent, extinguish or record validly what instrument ought to be executed or purporting to create any right or a liability, or purporting to create such right or liability no provision of Stamp Act can be invoked for the purpose of levying Stamp Duty by assuming existence of any document for the said purpose. Else, it would amount to duty on transaction and not duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the imported goods while paying duty on the finished goods manufactured therefrom, under Rule 9 of the Cenvat Rules. As against the above, no sooner Bill of Entry is filed under the provisions of the Customs Act, 1962, there arises liability on the part of the importer to pay the required customs duty in respect of the imported goods. 7.1 He submitted that the Bill of Entry is very much an instrument as per Section 2(l) of the Bombay Stamp Act, 1958 inasmuch as it creates right as well as liability on the part of the importer, which entitles him to the delivery of the imported goods. In other words, importer cannot take delivery of imported goods from the control of the Customs Authorities, unless the Bill of Entry is filed and till then, the goods remain within the custody of the Customs Authorities and that there would be no question of creation of the aforesaid rights and liability on the part of the importer. 7.2 Mr. Trivedi submitted that after the amendment in Article 24 with effect from 1-4-2006, concept of transfer of ownership or concept of authorizing third party to make the delivery of the goods or the concept of tripartite arrangement are all foreign to the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Abkari Act, the respondents obliged themselves in the event of breach of the condition, to pay to the State of Kerala the sum of money mentioned in the instrument in question, being the amount of the excise duty. Under the instrument in question the respondents clearly oblige or bind themselves to pay to the State of Kerala a specified sum of money and can be sued thereon. The instrument in question is, therefore, an instrument whereby a person obliges himself to pay money to another, the obligation to become void if a specified act is performed. It is a bond within the meaning of the Kerala Stamp Act. 8.2 In the case of J.K. Industries Ltd. v. Union of India, reported in 2005 (186) E.L.T. 3 (Raj.) it is held that the Custom Authorities under whose jurisdiction the bonded warehouse is situate, is the person before whom application seeking permission to remove goods for home consumption is to be made. The bill of entry is also required to be presented to him and liability to pay Customs Duty on such goods be removed for home consumption also arises then. 8.3 In the case of Vijaya Industrial Products (P) Ltd. v. Union of India, reported in 1995 (76) E.L.T. 531 (Mad.) it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y unless the definition of that word in the particular statute under consideration is similar to that construed in the decisions. The plain construction of the special definition of the word in a particular Act must prevail. In the special definition given in Section 2(j) of the said Act manufacture has been defined as including a process or manner of producting, collecting, extracting, preparing or making any goods. There can be no doubt whatsoever that collecting goods does not result in the production of a new article. There is, therefore, inherent evidence in the definition itself that the narrow meaning of the word manufacture was not intended to be applied in the said Act. Again, the definition speaks of the process of lopping the branches (of trees), cutting the trunks . The lopping of branches and the cutting of trunks of trees also, self evidently, does not produce a new article. The clear words of the definition, therefore, must be given due weight and cannot be overlooked merely because in other contexts the word manufacture has been judicially held to refer to the process of manufacture of new articles. 8.7 In the case of Commissioner of Income Tax, Kerala v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention should be paid to what has been said as also to what has not been said. xx xxx xxx 67. Therefore, the legal position seems to be clear and consistent that it is the bounden duty and obligation of the court to interpret the statute as it is. It is contrary to all rules of construction to read words into a statute which the legislature in its wisdom has deliberately not incorporated. 68. On clear construction and interpretation of section 35B(1A) of the Act we are clearly of the opinion that the respondent s activity amounts to processing only and the activity does not amount to either production or manufacture . The term processing has not been included in section 35B(1A) of the Act, therefore the respondent is not entitled for weighted deduction of section 35B (1A) of the Act. 9. The crux of the contention of the petitioners is that since the only document/instrument involved in the process of delivery is a bill of lading, any levy of stamp duty can only be with reference to this document/instrument. In Mitra s Legal Commercial Dictionary (Sixth Edition) by Tapash Gan Choudhary, the Bill of Lading is explained as under : Bill of lading : A shipmaster s d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued, the shipper is the bailor and the carrier is the bailee. I am, therefore, of the view that a bill of lading, which is issued by the carrier (bailee) can, therefore, never treated the description of a delivery order. 10. Now let us examine the case of the petitioners. In the case of the petitioners, the practice that is followed at their captive jetty, for discharging of cargo from ships is concerned, is that as and when a ship carrying cargo consigned for the petitioners arrives at the jetty, the cargo in the ship s tanks is directly transported via conveyor belt to the custom bonded house/yard for custom clearance, where it is directly transported via conveyor belt to the petitioner company s storage facility and from there, it is taken for consumption. All this is done only against production of/undertaking to produce the Bill(s) of Lading. The respondents are not involved in so far as entrustment of the cargo by the carrier to the petitioners are concerned. The cargo is directly delivered to the petitioners via the jetty utilizing the conveyor belt. The cargo is not delivered to the Port Authorities, which might be in the case of an individual consignee at a conventiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislative competence of a State to prescribe stamp duty in respect of a bill of lading. In this case since the goods are directly delivered to the owner of goods, no stamp duty is involved. 10.5 The power to levy stamp duty is concurrent under Entry 44 of List III of Schedule 7 of the Constitution of India. Entry 91 of List 1 of the 7 Schedule prescribes the instruments in relation to which the Central Government may enact legislation to prescribe the rate of stamp duty. Entry (1) of Schedule 7 is reproduced below : 91. Rates of stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts. 10.6 Entry 63 of List 2 of Schedule 7, defines documents in respect of which the State Government may legislate. Entry 63 of List 2 reads as under : 63. Rates of stamp duty in respect of documents other than those specified in the provisions of List I with regard to rates of stamp duty. 10.7 Thus, a plain reading of Entry 63 of List 2 and Entry 91 of List 1 makes it clear that the State Government has no competence to prescribe a rate of stamp duty in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid and the same is exempted from the definition of instrument . 11.3 I may also quote Section 2(4) of The Sale of Goods Act, 1930 which is as under : 2. Definitions - In this Act, unless there is anything repugnant in the subject or context, - xxx xxx xxx (4) document of title to goods includes a bill of lading, dock-warrant, warehouse keeper s certificate, wharfinger s certificate, railway receipt, multimodal transport document, warrant or order for the delivery of goods and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorizing or purporting to authorize, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented; 11.4 The aforesaid definition would show that a bill of lading is a proof of possession or control of goods, or authorizing or purporting to authorize, either by endorsement or by delivery, the possessor of the document to transfer or receive goods. 11.5 Thus, in case of a bill of lading, the Act is not applicable and no stamp duty can be levied. In short, Section 2(1) and Section 74 of the Bombay Stamp Act clearly exclude a bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006, Article 24 read as under : 24. Delivery order in respect of goods - That is to say, any instrument entitling any person therein named or his assigns or the holder thereof, to the delivery of any goods lying in any dock or port, in any warehouse in which goods are stored, or deposited on rent of hire, or upon any wharf, such instrument being signed by or on behalf of the owner of such goods upon the sale of transfer of such goods the sale or transfer of the property therein when such goods exceed in value twenty rupees. (emphasis supplied). 13.1 With effect from 1st April 2006, the description of delivery order in respect of goods was, however amended. The amended article reads as under : 24. Delivery order in respect of goods, that is to say, any instrument entitling any person therein named or his assigns or the holder thereof, to the delivery of any goods lying in any dock or port, in any warehouse in which goods are stored, or deposited on rent or hire, or upon any wharf, when such goods exceed in value one hundred rupees. (Emphasis supplied). 13.2 A perusal of the Article, prior to amendment and after amendment, shows that a Delivery Order as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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