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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 ..... 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" (hereinafter collectively referred to as "the impugned Circulars". 2.1 The petitioner companies in the above petitions are manufacturers of various steel products and are having their plants at Hazira. The petitioners, with the permission of the Government of Gujarat and the respondent no. 2, constructed a captive jetty for the purpose of landing or shipping of captive industrial raw materials or finished goods from the jetty at a cost of over Rs. 115 crores. After the vessels with imported goods arrive at the Port, goods are discharged and transported to custom bounded area through the use of conveyor system and after such goods are cleared by the customs authorities, the same are transported through conveyor system to the bunker of the petitioners for use thereof in manufacturing finished goods. 2.2 The captive jetty of the petitioners has been notified as a "landing place" for the purpose of loading or unloading of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present petitions have been filed challenging the aforesaid impugned circulars. 3. Learned Advocate for the petitioners has raised the following contentions : 3.1 That it is a fundamental principle of law that stamp duty is levied on a document or instrument. No stamp duty is can be levied on a mere right or on a transaction in the abstract or in vaccuuo. The incidence of levy of stamp duty is, therefore, required to be related to the existence of such a document/instrument and the existence of such a document/instrument attracting stamp duty is therefore a sine qua non. In absence of a document/instrument no stamp duty is leviable. 3.2 That in the present case it is an uncontroverted fact that so far as delivery of cargo to the petitioners at the captive jetty is concerned, the only document/instrument involved is a bill of lading/undertaking to produce a Bill of Lading furnished to the charterer. The petitioners receive delivery of imported cargo at the captive jetty, from the carrier against a bill of lading and no other document or instrument is involved for the delivery of goods. 3.3 That in the case of delivery of cargo to the petitioners at the said captive jetty, no del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not required to be paid subject to fulfilling the conditions prescribed by Sections 53, 54, 55 and 56. In the case of these goods there is no need to present a Bill of Entry. Bill of Entry is necessary and has to be presented in the case of goods for home consumption or warehousing : Goods entered for home consumption are required to be cleared on payment of duty. Warehoused goods may be cleared either for home consumption or exportation on payment of import duty or export duty, as the case may be. Goods entered for home consumption are to be subjected to duty at a rate and tariff valuation as on the date of presentation of a Bill of Entry under Section 46 and goods cleared from a warehouse are to be subjected to duty at a rate and tariff valuation as on the date of actual removal from the warehouse. Other goods, presumably goods not disclosed but discovered to be imported or which have otherwise escaped duty, are to be subjected to duty at a rate and tariff valuation as on the date of payment of duty. 11. Section 56(1) which we have extracted earlier requires the importer of any goods for home consumption or warehousing to present to the proper officer a bill of entry in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 68 as on the date on which the goods are actually removed from the warehouse and in the case of any other goods as on the date of payment of duty. Goods which are entered for home consumption under Section 46 and goods which are warehoused are naturally goods which are openly imported into India without concealment. The expression/other goods' mentioned in Section 15[c] is obviously meant to cover other imported goods such as goods imported clandestinely and goods which have otherwise escaped duty." 4.2 In the case of Union of India and others v. Chowgule and Co. Pvt. Ltd., reported in 1985 (20) E.L.T. 57 (Bom.) it is held that a Bill of Entry is an innocuous matter. It does not create any obligation or liability on the petitioner. It is more so when no civil consequence will follow from the mere filing of a Bill of Entry. If such a Bill of Entry is filed the customs authorities would proceed to decide the question about the necessity or otherwise of payment of customs duty and that in this fashion the Bill of Entry would start the ball rolling. Therefore the petitioners have been unnecessarily making a grievance when the petitioners were called upon to furnish the Bill of En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a company can effect transfer of property. The words "inter vivos" in the context of Section 394 of Companies Act would include within their meaning also a transfer between two "juristic persons" or a transfer to which a "juristic person" is one of the parties. The transaction between a minor or a person of unsound mind with the other person would not be recognized in law, though the same is between two living beings, as they are not juristic persons in the eye of law who can by mutual consent enter in a contract or transfer the property. The company would be a juristic person created artificially in the eye of the law capable of owning and transferring the property. Method of transfer is provided in law. One of the methods prescribed is dissolution of the transferor company by merger in the transferee company along with all its assets and liabilities. Where any property passes by conveyance, the transaction would be said to be inter vivos as distinguished from a case of succession or devise." 4.5 In the case of State of Rajasthan v. Bhilwara Spinners Ltd., reported in AIR 2001 Rajasthan 184. Para 23 thereof reads as under : "23. The aforesaid definition makes it clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar of the respondent authorities. 6. Mr. S.N. Soparkar, Senior Advocate submitted that though the bill of entry is filed, if the goods are transferred under Bill of lading, the tax is already paid and only in case of a fresh transaction the duty is leviable. He has relied upon a judgment in the case of Bayyana Bhimayya v. Government of A.P., reported in AIR 1961 SC 1065 (V 48 C 178) wherein it is held that in so far as the third parties were concerned, they had purchased the goods by payment of an extra price, and the transaction must, in law and in fact, be considered a fresh transaction of sale between the assessees and the third parties. 7. Mr. Kamal Trivedi, learned Advocate General appearing for the respondent State submitted that the Bill of Entry is not a procedureal formality, but it creates the following rights in favour of the importer of the goods : [i] To have the goods assessed at the value and rate of duty as in force on the date of presenting the said Bill of Entry. [ii] To have the goods cleared and delivered in its favour, and [iii] To avail of Cenvat Credit of the import duty paid on the imported goods while paying duty on the finished goods manufactured ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the respondents would deliver the same into the custody of the Excise Officer in charge of the importer thereof and the respondents would on demand pay or cause to be paid to that excise Officer excise duty on all or any portion of such liquor not delivered. The obligation of the respondents under the instrument in question is that if there be a breach of all or any of its provisions or of the Rules they would forthwith pay to the State of Kerala the sum of money mentioned in it, representing the amount of the excise duty payable upon the quantity of liquor to be exported, upon payment the obligation would be void and of no effect. By the instrument in question, therefore, the respondents avail themselves of the advantage of clearing from their distillery for export outside the State of Kerala, liquor without paying excise duty thereon. They do so upon the condition that the liquor shall be delivered into the custody of the Excise Officer in charge of the importer and excise duty shall be paid to that Excise Officer on all or any portion of the liquor which is not so delivered. As required by the Abkari Act, the respondents obliged themselves in the event of breach of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a bill of entry for warehousing." 8.5 In the case of Union of India v. Marmagoa Steel Ltd., reported in 2008 (229) E.L.T. 481 (S.C.) it is held as under : "11. Now in the present case as far as Bills of Entry dated 30th May,1994 and 31st May, 1994 are concerned, Bills of Entry were produced by the assessee which indicate that M/s. Essar Gujarat Limited had paid duty at the time of import and, therefore, the assessee was entitled to take MODVAT Credit for the duty paid on the imported goods. However, when we come to the 3rd Bill of Entry dated 6th June, 1994 only the above Certificate at Page No. 42 of the Paper Book was relied upon and the triplicate copy of the Bill of Entry was not produced. In the circumstances, in our view, the respondent had wrongly availed of MODVAT Credit of Rs. 1,78,582/- on the quantity of 212.659 MT scrap referred to in the above Chart." 8.6 In the case of Ashirwad Ispat Udyog v. State Level Committee, reported in AIR 1999 SC 111, in para 8 it is held as under : "8. Decisions construing the meaning of the word "manufacture" as used in other statutes do not apply unless the definition of that word in the particular statute under consideration is simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overning the instant case incorporated the terms 'manufacture' and 'production' and omitted the term 'processing'. Therefore the respondent-assessee cannot be extended the benefit of section 35(1)(B) of the Income-tax Act. 60. The processing is only an intermediate stage of production and/or manufacture. The processing of tea of the respondent-assessee falls short of either manufacturing or production, therefore, because of the language of Section 35(1)(B) of the Income Tax Act, the respondent-assessee cannot be extended the benefit which has been extended to the assesses in Nilgiri's and Chowgule's cases. 61. Since the legislature in its wisdom has not used the term 'processing' in section 35(1)(B) of the Act, it would be erroneous to incorporate the word in the section and then interpret the Statue. In this view of the matter Chowgule's case and Nilgiri's case dealt with by this Court in Chowgule's case are clearly distinguishable because of the language of the statutes. 62. The intention of the legislature has to be gathered from the language used in the statute which means that attention should be paid to what has been said as also to what has not been said. xx xxx xxx 67. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negotiable document. Title to the consignment covered under the bill of lading and the right to receive delivery of the consignment covered by the bill of lading, can, therefore, be negotiated and/or transferred and/or assigned. A holder of a bill of lading is entitled to demand, from the carrier, delivery of the goods covered thereunder. The Bills of Lading Act, 1856 governs the rights and obligations in relation to a bill of lading in India. 9.2 A "delivery order" is a document which is very different. It does not cover the carriage of goods by sea. A "delivery order" is a written order or instruction by the bailor of goods, directing a warehouseman, the port authorities or other bailee to deliver the goods to the person named in the delivery order or to the person in lawful possession of the delivery order. A delivery order is, therefore, different and distinct from a bill of lading. A delivery order is normally issued in cases where there is bailment of goods and is issued by the bailor and addressed to the bailee. Where goods are loaded onto a ship, and a bill of lading issued, the shipper is the bailor and the carrier is the bailee. I am, therefore, of the view that a bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... characteristics of the delivery order. 10.2 Thus, the bill of lading represents the goods and the transfer of it operates as a transfer of goods. A bill of lading serves three purposes viz. (1) it is a receipt for the goods shipped containing the terms on which they have been received; (2) it is evidence of the contract for the carriage of goods and (3) it is a document of title for the goods specified therein. In the case of bill of lading the goods are directly transferred to the owner of the goods and no third party is involved. 10.3 In view of the above discussion it is clear that since the cargo in question is directly received, taken delivery of and transported to the petitioners, there is no entrustment of the cargo to the respondents, there is no necessity for any other instrument. 10.4 Section 2(1) and Section 74 of the Bombay Stamp Act clearly exclude the bill of lading from the purview of Bombay Stamp Act. In so far as a bill of lading is concerned, it is clear that the levy of stamp duty on a bill of lading can only be done by Parliament and it is not within the legislative competence of a State to prescribe stamp duty in respect of a bill of lading. In this case si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts". 11.2 It is also required to be noted that in the case of IRC v. G. Angus & Co. reported in (2004) 9 SCC 438 the Apex Court held that the thing which is made liable to stamp duty is the "instrument". It is not a transaction of purchase and sale, which is struck at, it is the "instrument" whereby the purchase and sale are effected which is struck at. It is the "instrument" whereby any property upon the sale thereof is legally or equitably transferred and the taxation is confined only to the instrument whereby the property is transferred. If a contract of purchase or sale or a conveyance by way of purchase and sale, can be, or is, carried out without an instrument, the case would not fall within the section and no tax can be imposed. Taxation is confined to the instrument by which the property is transferred legally and equitably transferred. In the case on hand the only instrument is Bill of Lading on which tax has already been paid and the same is exempted from the definition of "instrument". 11.3 I may also quote Section 2(4) of The Sale of Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner files a Bill of Entry. 11.8 Thus, mere filing of bill of entry would not mean that the petitioner is required to pay stamp duty especially the goods 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. 12. A contention has been raised stating that filing of bill of entry is not optional. It may be so. But in all cases it is not necessary that tax is required to be imposed, especially when the tax has already been paid in case of bill of lading. 13. Now, the impugned Circulars were issued on the basis of amended Article 24 of the Bombay Stamp Act. While the Indian Stamp Act prescribes the rate of stamp duty on a Bill of Lading, the Bombay Stamp Act contains provisions for the rate of stamp duty on "delivery order". Article 24 of the Schedule to the Bombay Stamp Act (prior to 1st April 2006) prescribed the rate of stamp duty that would be leviable on "delivery order in respect of goods". Prior to its amendment on 1st April 2006, Article 24 read as under : "24. Delivery order in respect of goods - That is to say, any instrument entitling any person the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst production of a bill of lading. Neither amended Article 24 deals with nor could deal with nor contemplate a case of direct delivery by the carrier to the consignee at a captive jetty against a bill of lading or even otherwise, without the issuance of a delivery order. 13.4 In short, 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. 14. In view of the above discussion it is clear that if the name of the party is the same in the bill of lading and bill of entry, then no stamp duty can be levied upon them. However, in case the petitioners where the name of in the bill of lading and name in the bill of entry is differen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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