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TMI Blog1983 (10) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... sion petition (now an appeal) are to the effect that the appellants imported a consignment of viscose staple, fibre from Canada, by vessel, `S.S. Mishref . The contention is that this ship had entered the territorial waters of India on 2-12-1978. However, the goods could not be off-loaded at Bombay Port, which fact the appellants attribute to ship s failure to get berth because of congestion in the Docks, during that period, as a result of strike by the workers of the Bombay Port Trust in November 1978, and in view of this situation the vessel after getting itself registered for berthing turn left to discharge other cargo. However, there is some difference here as to the place whereto the ship was diverted because whereas in the grounds of appeal, it is stated that it proceeded to Dubai; according to the letters of the Shipping Agents, it had sailed for Karachi to discharge the cargo meant for that port. 3. What is, however, material for the purposes of the present dispute is that the vessel arrived again in Bombay Port on 9-1-1979 whereafter Entry filed. The Goods were off-loaded in Bombay Port on or around 13-2-1979, when the Customs authorities charged customs duties in accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that once a vessel carrying dutiable goods enters India, which includes territorial waters of India, it is the duty of the Master of the Ship to file import manifest for the goods, with corresponding obligation on the customs authorities at the Port to insist on the filing of the same, with the result that in case a ship has again to sail off from that place, an export manifest and entry outwards has to be filed. They thus pleaded that the fact that Master of the Ship was allowed to take the vessel again out of the territorial waters of India, without insisting on the formalities, such as filing of export manifest in terms of Section 50 of the Act, could not entail any penal consequence for the appellants, making their goods exigible to duty, which was not payable had the goods been allowed to be off-loaded when the vessel arrived first in Bombay waters, namely, on 2-12-1978. 5. All these contentions, however, did not find favour with the Appellate Collector who dismissed the appeal by his order dated 21-11-1980 holding that the material dates for the purpose of determining the rate of duty payable, were as contemplated by Section 15 of the Act, and that appellants content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthra, Advocate appearing for the appellants, convassed the same contentions as set forth the grounds of appeal and strenuously argued that Section 12 of the Act was a complete code by itself, so far as dutiability of the imported goods was to be determined, and that the provisions of the Act particularly the definition clauses, namely, sub-section (23) of Section 2 read with sub-section (27) made it clear that the import was complete as soon as any goods were brought into India including territorial waters thereof, from any place outside India and that in view of the fact that there was a complete exemption from duty on the day the vessel carrying these goods entered territorial waters of India for the first time; namely, on 2-12-1978 these goods could not be treated as dutiable goods, and question of applying Section 15 to these goods would not arise. 8. He made extensive reference to the terms of contract between the importer and the foreign supplier in this case, placing stress on the fact, that it was clear from the copy of the agreement (page 10 of the paper book) as well the terms of bank guarantee (page 11) that the goods were intended to be discharged at Bombay, and wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed certain facts which were never within appellant s knowledge such as reference to manifest, or contents thereof, and urged that these observations seem to have been made on some facts which were within the knowledge of the Appellate Collector, to which the appellants did not even have any access. He added that they have been denied inspection of the records even at appeal stage and so facts have crept in the Appellate Collector s order, which the appellants had no means of refuting, and that on that count alone, the order was liable to be set aside. He contended that the facts, which had been introduced by the Appellate Collector such as filing of the manifest by the Master of the ship or contents thereof were such which required verification, and notice to the appellants, and this situation alone called for a remand of the case for verification of the facts as to whether the ship s master on arrival in the territorial waters of India on 2-12-1978, had filed any manifest at all and whether he had sailed away to another port, which was necessary on account of divergent versions; namely, some time it being stated that the ship had been diverted to Dubai, and at another time that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant and material provision is that of Section 15; the learned Counsel read extensively from the said judgment and contended that the said judgment of the Delhi High Court should not be taken to have conclusively determined the issue. According to him, S.L.P. in respect of this judgment has been admitted by the Supreme Court. Otherwise also, he contended, there was judgment of the Bombay High Court holding the contrary view which was earlier in time and which very much applied to the facts of this case and he made particular reference to the case of H.S. Sawhney v. M/s. Sylvania and Laxman Ltd. (1975) 77 BLR 330 which case, he asserted, was on all fours with the case in hand, inasmuch as there also the goods arrived in the territorial waters of India, when the exemption notification making the goods totally free from duty was in force, but the Bill of Entry having been filed subsequent to the withdrawal of the said exemption notification and the goods having been cleared thereafter; the Customs authorities having insisted on payment of duty in accordance with the principles laid down by Section 15 of the Act, but the High Court of Bombay in the said case held that by reading S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court authorities, reported as Empress Mills v. Municipal Committee, Wardha (1983 E.L.T. 341) before the above-quoted case of Prakash Cotton Mills, and also a number of judgments of other High Courts; particularly, a Division Bench of Gujarat High Court reported as 1982 E.L.T. 203 (Prabhat Cotton Silk Mills Ltd. v. Union of India) and also that of Calcutta High Court in the case of Shewbuxrai Onkarmall v. Assistant Collector of Customs Others [1981 E.L.T. 298 (Cal.)]. 16. The learned S.D.R. drew pointed attention of the Bench to a judgment of Bombay High Court also, in the case of Jain Shudh Vanaspati, reported as 1983 E.L.T. 923 which was a case identical to the facts of the present case, where also the ship having arrived in the territorial waters of India on a date when some exemption notification was in force, had been diverted to Karachi without unloading the cargo, and re-entered the Indian waters on a later date, by which time the exemption notification had been withdrawn, and then the question arose whether the import of goods had taken place on the earlier date, when the ship had initially entered the Indian waters or whether the chargeability of duty is to be asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve placed on record a copy of a letter from the Steamer Agents (Page 3 of Paper Book `A ) which has been addressed to the appellants bearing the date 22-12-1980 in which it is categorically stated that after getting her berth turn registered in Bombay on 2-12-1978, the vessel sailed to Karachi because the waiting time in Bombay was about 45 days and so it proceeded to Karachi to off-load the cargo there, and had re-entered the Cutter Anchorage on 9th January, and was brought to Inner Anchorage on 19th January and was allotted its berth on 13th February. It is thus evident that except for the conflicting version as to whether the ship had been diverted to Dubai or Karachi, there is no disputing the fact that it did leave Indian waters and sailed to some place of another country to discharge the cargo there. It is also established from the order of the Appellate Collector that after re-entry on 9th January, 1979, the Bill of Entry was presented and cargo cleared after paying duty on 13-2-1979; the date of entry inwards being 29-1-1979. Although, we do find that Appellate Collector has gone off the tangent in entering into details of the conduct of the Master of the ship or by referri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and got mixed up with the totality of the property in the country, and, or until they are removed from the bonded warehouse, in terms of Section 15(1)(b) of the Act. The Calcutta High Court went to the extent of saying that the expression `imported into India had a wide meaning, and Indian waters meant Indian Customs waters , and that it cannot be said that the goods `imported into India would mean the goods which merely cross into the territorial waters of India. Similar view was held by Kerala High Court in case : Shri Ramlinga Mills v. Assistant Collector of Customs (1983 E.L.T. p. 65). Delhi High Court also held in an earlier case reported as Union of India v. Khalil Kechrim (1970 Cr. L.J. 417) where also a Division Bench held that unless the goods are brought into the country for the purpose of use, enjoyment, sale or distribution, they cannot be said to have been imported or brought into the country. It is thus apparent that the judgment of the Delhi High Court in the Jain Shudh Vanaspati case (supra) is not a solitary authority on the point but is based on a view almost held uniformly by several other High Courts, and has the support of a similar proposition having be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive rate of duty, which has to be done only with reference to provisions of Section 15 of the Act, because calculation obviously has to be relatable to some date which has been particularised in recognition of different situations, in Section 15. 24. The authority on which the appellants have chosen to fall back, namely, Sylvania Laxman case of Bombay remains the solitary authority on the point but the view expressed therein has to be taken to have been overruled by the Supreme Court in M/s. Prakash Cotton Mills case which happened to be later in point of time and with reference to special provisions of Section 15 of the Act and this would be irrespective of the fact that there is no particular reference to the Bombay High Court in this judgment. The matter is further taken out of pale of any controversy, because even the Bombay High Court, in a situation exactly the same as the case in hand, has held in the latest judgment decided on 20-9-1982 and reported as 1983 E.L.T. 923 (Jain Shudh Vanaspati Ltd. v. S.R. Patankar Others) that the relevant date for the purpose of calculation of duty is when the goods re-enter the Indian waters, and not with reference to the date of their ..... X X X X Extracts X X X X X X X X Extracts X X X X
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