9911796707
TMI Blog1987 (10) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... item permitted to be imported under the O.G.L. was palm oil. The Government of India, Ministry of Commerce, issued Notification No. 126 on July 1, 1977 prescribing that the imported palm oil would be totally exempted from payment of Customs duty. The petitioners secured import licence on June 23, 1979 and in pursuance thereof entered into two firm contracts for import of palm oil. A total quantity of 2902.3001 Metric Tons of palm oil was loaded on ship M.V. 'Dolphin II' by the party in Penang and the vessel arrived within the territorial waters of India and was registered at the Bombay Front Line at 10.30 hours on February 27, 1979. On February 28, 1979 the Shipping Agents submitted the Import General Manifest, which was duly registered and was displayed on the notice board of Collector of Customs, Bombay. On February 28, 1979 the petitioner's clearing agents filed with the Customs authorities six bills of entries for clearance of the imported goods for home consumption. The entry inwards of the vessel was not granted and the goods could not be discharged as the Bombay Port Trust informed the vessel's agents on February 23, 1979 that the vessel would have to wait for about 65 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 E.L.T 414 (Synthetics and Chemicals Ltd. v. S.C. Coutinho) held that the goods entered the Indian territorial waters on February 27, 1979 and that was the taxable event. The learned Judge further held that as the vessel left the Indian territorial waters without discharging the cargo, the imported goods lost their characteristics and when the vessel re-entered the territorial waters on March 6, 1979 the goods were reimported and therefore liable to duty. The learned Judge felt that as soon as the vessel left for Karachi Port and thereby crossed the Indian territorial waters, the goods were exported within the meaning of Section 2(18) of the Customs Act. On the strength of this finding, the petition was dismissed and that judgment is under challenge. 5. Shri Rana, learned Counsel appearing on behalf of the appellants, submitted that the goods entered Indian territorial waters on February 27, 1979 and on that date taxable event occured and the goods acquired the characteristic of imported goods. The learned Counsel submitted that in view of the exemption notification, the imported goods were not liable for payment of any Customs duty on February 27, 1979. The learned Counsel urge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was further held that the chargeability does not remain suspended until they are cleared for home consumption. In view of the decision of the Full Bench, it is no longer open to contend that the goods were not imported when the ship entered Indian territorial waters on February 27, 1979. The learned single Judge was therefore right in concluding that the import did take place on February 27, 1979 when the vessel entered the Indian territorial waters, and if the goods acquired the characteristics of imported goods on that date, then the goods were obviously not liable to payment of any Customs duty in view of the exemption Notification No. 126, dated July 1, 1977. 7. Shri Sethna, learned Counsel appearing on behalf of the Department, very vehementally urged that the concept of taxable event occurring on February 27, 1979 is totally irrelevant to consider whether the Department can recover the Customs duty. The learned Counsel submitted that taxable event may have occurred on February 27, 1979 in view of the decision of the Full Bench of this Court, but the liability to pay the duty arises only when the goods are unloaded at the Port. In other words, the submission is that the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause (a) of Section 8 for the loading of such goods. Under Section 8(a) the Collector of Customs approves proper places in any Customs port or Customs airport or coastal port for loading of goods for export. Section 41 provides that the person incharge of a conveyance carrying export goods shall, before departure from a Customs station, deliver to the Customs Officer an export manifest in the prescribed form. The person delivering the export manifest is required to subscribe to a declaration to the truth of its contents. Section 42 demands that the person incharge of a conveyance, on which export goods are loaded at a Customs station, shall not permit the conveyance to depart until written order to that effect has been given by the proper officer. Section 50 requires the exporter of goods to make entry thereof by presenting to the proper officer a shipping bill if the goods are exported in a vessel or aircraft and the bill of export if the goods are exported by land. Section 51 provides that the goods entered for export would be assessed and charges recovered only after the officer is satisfied that the goods are not prohibited goods and the exporter has paid duty. The goods cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to suggest that the goods were exported as soon as the vessel left the territorial waters. The goods can be said to be exported only when the goods are taken beyond the limits of Indian territorial waters by following the procedure prescribed under the Customs Act and it is not in dispute that such procedure was not undertaken when the ship left for Karachi Port. Therefore, in our judgment, it is not possible to hold that the goods were exported after February 27, 1979. 10. Shri Sethna urged that the goods lost the characteristic of "imported goods" as soon as the ship left for Karachi Port. We are unable to accede to this submission. The characteristic acquired by the goods on crossing the territorial waters cannot be wiped out merely because the conveyance, on which the said goods were loaded, leaves Indian territorial waters in view of the difficulty in securing berthing accommodation. 11. Once the finding that the imported goods were exported after February 27, 1979 is set aside, then the consequential finding that the goods were imported on March 6, 1979 when the vessel re-entered the territorial waters of India cannot be sustained. The taxable event occurred when the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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