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TMI Blog1983 (11) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... e Steamer Vishwa Bandhan which entered the territorial waters of India on or about 22-11-1975, and the said consignment was also deposited in the private bonded warehouse at Thane under the provisions of Section 60 of the Customs Act, 1962. 3. As per the averments made by the appellants, both these chemicals imported were meant for the manufacture of insecticides/pesticides and were dutiable at the time of their import, at the concessional rate of duty at the rate of 16% Adv. under the provisions of Notification No. 26-Cus., dated 1-3-1968 issued by the Government of India, Ministry of Finance (hereinafter referred to as Notification No. 26) subject to the conditions specified therein plus auxiliary duty at the rate of 15%. The said Notification No. 26 exempted chemicals for the manufacture of insecticides, pesticides and fungicides and felling under Item No. 28 of the First Schedule to the Indian Tariff Act, 1934 (32 of 1934) when imported into India from so much of that portion of the duty of Customs leviable thereon, which was specified in the said Schedule as was in excess of 10% Adv. where the standard rate of duty was leviable. This notification was rescinded by the Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the goods into the territorial waters of India) has been correctly decided by the Bombay High Court in the case. He further submitted that the DB judgment of the Bombay High Court in Synthetics and Chemicals (1981/E.L.T./414) has sought to explain Sylvania Laxman s case by narrowing or whittling down the principles laid down in Sylvania Laxman s case to cases of non-levy or total exemption. According to him, to the extent to which the said DB judgments in Synthetics and Chemicals case seeks to narrow down the principle, it is inconsistent with the basic position as laid down in certain Supreme Court and Privy Council decisions. Almost all the reported decisions seem to agree on the point, import means Bringing goods into territorial waters of India and that the taxing event is import or bringing of the goods within the Customs barrier, that Customs duty under the Customs Act, 1962 is charged on the goods imported into the country and that Section 12 of the Customs Act is the charging Section. He cited AIR 1963 S.C. 1760, 1962 BLR 466, AIR 1965 S.C. 1972 and AIR 1964 504 in support of his contention. 8. Referring to the Division Bench case in the Synthetic and Chemica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income Tax (16-ITR 240) in support of his contention that the liability to tax arises by virtue of the charging section alone and it arises not later than the close of the previous year though quantification of the amount payable is postponed. The last submission made by Shri Engineer is that Section 15 of Customs Act is merely procedural in nature and only prescribes a formality for determining the rate of duty and the tariff value. According to him, the date of filing of a Bill of Entry for home consumption or the removal of the goods from a bonded warehouse has no bearing on the actual import of the goods which, under Section 12, is the chargeable or taxable event. The levy under the Customs Act is provided by Section 12 itself and it is held that the rate of duty applicable is that which is provided under Section 15(1)(b) of the Customs Act (viz. at the point of time that the goods are actually removed from the bonded warehouse), then to that extent the chargeability to customs duty would depend upon a post-importation event, namely, the actual removal of the goods from a bonded warehouse which event being a fluctuating and for fortuitous event, the levy of duty based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not arise in this case as the provisions of Section 15(1)(b) are clear and unambiguous. The analogy from the cases of Income Tax under the Income Tax Act could have been drawn only when there would not have been any relevant provision under the Customs Act. A perusal of Sections 12, 14 and 15 of the Customs Act, 1962 shows that they govern dutiable goods, valuation of the goods for the purpose of assessment and date for determination of rate of duty and tariff valuation of imported goods. The Act is a complete code in itself and, therefore, importing the decisions from other Acts like Income Tax and Sales Tax Acts is not warranted or justified. 11. We have considered the submissions made by both the parties. The entire argument of Shri Engineer is based upon the decision of Bombay High Court given in the case of M/s. Sawhney v. Sylvania Laxman Ltd. (Supra). In that case, a notification giving total exemption from the whole of the duty leviable was in force on 29-3-1967 when the ship entered the territorial waters of India. The said notification was in force only upto 31-3-1967. The bill of entry was filed on 27-4-1967, goods were cleared in June, 1967. The demand of the Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... torial waters calculation for the purpose of rate of duty must be done with reference to the date mentioned in Section 15 in various circumstances. 13. Reference to Section 2(25) of the Act to the definition of imported goods does not advance the matter for the appellant. The definition says that imported goods means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption. Thus it is clear that the goods remain imported goods till they are cleared for home consumption, which cannot be done without complying with Section 15, and presenting a Bill of Entry under Section 46 of the Act. Therefore, the definition of imported goods would suggest that import is not complete for fiscal purposes at the time when the ship entered the territorial waters. Rather import is incomplete till the goods are cleared for home consumption. Serious and grave implications involved in accepting the argument that import should be deemed to be complete for the purpose of calculating the duty of customs the moment a ship enters the territorial waters of India. It will be seen that there is no definition of territorial waters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds cleared from a warehouse under Section 68, on the date on which the goods are actually removed from the warehouse; and (iii) in the case of any other goods, on the date of payment of duty. Section 12 of the Customs Act cannot be read in isolation and it has to be read alongwith the provisions of Sections 14 and 15 of the Customs Act. The Hon ble Justice Rajinder Sacher of Delhi High Court in Jain Sudh Vanaspati Ltd. (Supra) commenting upon the decision given in Sylvania s case observed : In Sylvania s case, it appears that the learned Judges omitted to notice that Section 15 does not only talk of the rate but also talks of the date with reference to which alone the rates can be calculated. It would be wrong to read that Section 15 covers only the quantification. The Sylvania s case has taken too extreme and untenable a view in not applying Section 15 of the Act. The Division Bench of Bombay High Court in a later decision in Synthetics Chemicals case (Supra) accepted that the date of import (in loose sense) in the sense of entering the territorial waters of India has no relevance for determining the rate of duty which must be worked under Section 15 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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