1. The captioned appeal was originally filed as a revision application before the Central Government which, under the provisions of Section 131-B of the Customs Act, 1962, has come as transferred proceedings to this Tribunal for disposal as if it were an appeal filed before it.
The facts of the case, briefly stated, are that the appellants imported a consignment of palmolein by the vessel m.v. Nikolay Semashko at Madras Port in 1979. The vessel arrived at the port on 22-2-1979 but, owing to congestion in the port, opted to register arrival under the Registration system and sailed away. She re-arrived at the port on 28-2-1979 and berthed on 2-3-1979. The cargo was discharged thereafter.
A Bill of Entry for clearance of the goods for home consumption was filed on 13-3-1979, the duty assessed thereon was paid on 36-3-1979 and the goods cleared thereafter.
Later on, the appellants filed an application before the Assistant Collector of Customs, Madras claiming refund of the duty paid on the ground that the goods were exempt from basic duty (the duty leviable under the First Schedule to the Customs Tariff Act) and were chargeable only with additional duty (or countervailing duty, corresponding to the duty of excise leviable on indigenous goods under the First Schedule to the Central Excises and Salt Act) at the rate of Rs. 100/- per M.T. + 5% of that duty as special excise duty. The claim as well as the appeal preferred before the Appellate Collector of Customs, Madras did not meet with success. The lower authorities held that on the relevant date i.e. the date of presentation of the Bill of Entry, the exemption from basic duty was no longer in force and the goods were chargeable with basic duty at 12.5% ad valorem.
2. Despite the notice of hearing, the appellants were not represented before us when the appeal was taken up for hearing. Since there was no request for adjournment of the hearing, we have heard the Departmental Representative and proceed to dispose of the matter.
3. The salient submissions in the memorandum of appeal before us are that the carrying ship having entered Madras Port on 22-2-79, the goods had entered the territorial waters of India on 22-2-1979 during the currency of Notification No. 126-Customs, dated 1-7-1977, whereby palmolein was exempted from the whole of the Customs duty leviable thereon. The fact that the ship had left the port without discharging the goods, that it re-arrived on 28-2-1979, berthed on 2-3-1979 and that the bill of entry for home consumption was filed on 13-3-1979 when the aforesaid notification was no longer in force but Notification 42-Cus., dated 1-3-1979 imposing 12 1/2% duty on palmolein-all these were not relevant in the face of the law laid down by the Bombay High Court in M.S. Sawhney and Anr. v. Sylvania Laxman Ltd.-1977 BLR 360- according to which the goods having been imported i.e. arrived in the territorial waters of India when they were exempt from duty, would not attract duty on their clearance. The goods were, in fact and in law, imported on 22-2-1979. The taxable event viz. import took place on 22-2-1979 and in accordance with Section 12 of the Customs Act, 1962 (hereafter called 'the Act') there being no duty when the import took place, Section 15 of the Act which only provided for quantification of the duty and did not determine the durability or otherwise of the goods did not come into play.
4. Shri A.S. Sundar Rajan, Departmental Representative, opposed the appeal citing, in support of the impugned order, the Tribunal's decision in Bayer (India) Ltd., Bombay v. Collector of Customs, Bombay-1984 (16) E.L.T. 375 and the judgment of the Kerala High Court in the Indian Aluminium Industries Ltd. v. Union of India and Anr.
(1985) 4 ECC 1.
5. We have carefully considered the submissions before us. In the Bayer case (Supra), the Tribunal had occasion to consider several decisions including the one in the Sylvania Laxman case (Supra). Briefly put, the Bench observed that in a later decision of the Bombay High Court -Synthetics & Chemicals Ltd. v. S.C. Coutinho and Ors.-1981 E.L.T. 414, the earlier one rendered in the Sylvania Laxman case was discussed. It also come to be discussed in the judgment of the Delhi High Court in Jain Shudh Vanaspati Ltd. v. Union of India--1983 E.L.T. 1688. In the latter case, their Lordships of the Delhi High Court, after analysing the implications of Sections 12 and 15 of the Act, observed that, in their opinion, it would be wrong to read that Section 15 covered only the quantification but the date with reference to which it had to be clone could relate back to the earlier period of time when the ship had entered the territorial waters. It was added that the statute was clear that irrespective of the date when the ship entered the territorial waters, calculation for the purpose of rate of duty must be done with reference to the date mentioned in Section 15 in various circumstances.
The Court also pointed out that serious and grave implications were involved in accepting the argument that import should be deemed to be completed for the purpose of calculating the duty of customs the moment a ship entered the territorial waters of India, thing which is difficult of determination with exactitude.
6. The position that the rate of duty has to be calculated with reference to the date laid down in Section 15 of the Act stands concluded by the Supreme Court in Prakash Cotton Mills v. B. Sen and Ors.-AIR "It is thus clear requirement of Clause (b) of Sub-section (1) of Section 15 of the Act that the rate of duty, rate of exchange and tariff valuation applicable to any imported goods shall be the rate and valuation in force on the date on which the warehoused goods are actually removed from the warehouse." The ratio of the above decision would apply to the present case with the only difference that the relevant provision is Section 15(l)(a) [and not Section 15(1)(b) as in the Prakash Cotton Mills case].
7. To the same effect is the decision of the Kerala High Court in the Aluminium Industries case (Supra) in which several decisions including that of the Supreme Court in the Prakash Cotton Mills case, of the Bombay High Court in the Sylvania Laxman and the Synthetics and Chemicals cases, and of the Delhi High Court in the Jain Shudh Vanaspati case were considered.
"Any other construction of these provisions so as to separate charge-ability from computation by relating chargeability to the time of entry into the territorial waters and computing the duties with reference to the rates then in force is to construe the sections artificially and contrary to the legislative intent. The general scheme of the Act does not permit the computation to be related to an anterior date. It is intended to be made, in the case of goods entered for home consumption, with reference to the duty payable on the actual or deemed date of presentation of the bill of entry, or, in the case of warehoused goods, on the date of their removal from the warehouse, or, in the case of any other goods, on the date of payment of duty. What is payable is what was in force on the relevant date. That a different rate of duty was payable at the time of entry of the vessel into the territorial waters of India or at any time prior to the dates specified under Section 15 is immaterial. The legislative intent is to charge the goods with the duty payable on the relevant date and not any other date. This is the most convenient method of fixing the duties and collecting the same. The space and time are both certain, and the enforcement of collection is easiest at that point. That is the relevant stage for the purpose of chargeability, computation and collection." 8. Both the Delhi High Court and the Kerala High Court disagreed with the decision of the Bombay High Court in the Sylvania Laxman Case (Supra) on which the appellants place reliance.
9. Following the decision of the Delhi High Court in Jain Shudh Vanaspati case, of the Kerala High Court in the Indian Aluminium Industries case and of the Supreme Court in the Prakash Cotton Mills case and the Tribunal's decision in the Bayer case, we hold that the lower authorities have correctly held that the date of presentation of the bill of entry, and not the date of entry of the goods in the Indian territorial waters, was the date relevant for ascertaining the rate of customs duty applicable to the goods. The bill of entry was presented in the instant case on 13-3-1979 on which date the notification exempting palmolein from basic customs duty was no longer in force. In its place, Notification No. 42, dated 1-3-1979 imposing a duty of 12.5% ad valorem was in force. The duty has, therefore, been correctly collected.