1. The National Textile Corporation Ltd., Coimbatore filed revision petition before the Additional Secretary Revision Applications), Ministry of Finance, Government of India under Section 131 of the Customs Act, 1962 (hereinafter referred to as the Act), feeling aggrieved by an order passed by the Appellate Collector of Customs, Madras on 19.2,1981. The said revision petition has since been received by the Tribunal to be disposed of as an appeal by virtue of Section 131B 2) of the Act, and has been taken up, and is being disposed of as such.
2. The facts as set out in the grounds of appeal, reveal that the appellant (hereinafter referred to as the NTC, for short) which is stated to be a Government of India undertaking, had imported 350 metric tonnes (approximately) of viscose staple fibre from Canada. The import was effected by sea route per vessel 'Banglar Progoti', the destination of the imported consignment being Port of Madras. It is alleged that the ship arrived in Madras during December, 1978 but had to be diverted to Calcutta Port, because of its failure to find berth in Madras Port, on account of heavy congestion, and that the ship arrived at Calcutta on 23.12.1978 where the cargo was discharged and subsequently transhipped to Madras Port by another coastal vessel, namely, 'KHULNA'.
The goods were eventually got released from Customs in Madras Port after complying with the necessary formalities in two instalments, one in February and the other in March, 1979.
3. The situation giving rise to the present controversy has resulted as a result of withdrawal of benefit of exemption notification, in respect to countervailing duty, which had existed under Government Notification issuer under Section 25(1) of the Act, up to 31st December, 1978, with the consequence that with effect from 1.1.1979, these goods became liable to be charged to countervailing duty although the exemption from customs duty as well as auxiliary duty continued as before.
4. In view of this withdrawal of exemption from countervailing duty on these goods, the Customs authorities at the time of clearance of the goods at Madras Port in the months of February and March 1979, held the view that since at the time the goods were being released from customs, namely, in the months of February and March 1979, the exemption from countervailing duty stood withdrawn, the importers were liable to pay the said duty, and on this insistence, the duty was paid, but under protest, 5. However, subsequently, a claim for refund of amount, paid as countervailing duty, which was worked out to Rs. 2,23,723.83 was made.
This refund application was rejected by the Assistant Collector, Madras by his order dated 3.5.1979 on the short ground that since the Bills of Entry relating to the goods, which were the subject matter of claim before him, were admitted on 1.3.1979 and 15.3.1979, the consignments covered thereby will be liable to countervailing duty with reference to Item 18 of the Central Excise Tariff because at the time of the customs clearance, exemption survived only in respect to customs duty and auxiliary duty, whereas it stood withdrawn in respect to countervailing duty.
6. The party went in appeal to the Appellate Collector against this rejection, but by an order dated 19.2.1981/9.4.1981, the said appeal was dismissed by means of a short order with the observation that the decision of the lower authority was maintainable in law, and there was no ground for interference.
7. It is against this dismissal of the appeal that the party went up to the Government of India, by means of a revision petition, which is now being taken up as an appeal. The matter was agitated on the pleas that the appellant was a Government of India undertaking and that the goods had been booked for Madras and the ship did reach the Madras Port during the month of December, 1978 and had been diverted to the Calcutta Port for reasons of lack of berth in the Madras Port and even there, the ship discharged the cargo on 23.12.1978 for transhipment to Madras Port. It was asserted that the import had been completed as soon as the ship had entered the territorial waters of India, which was definitely during the period the exemption notification regarding countervailing duty was in operation, and that a subsequent diversion of the ship to Calcutta or transhipment of goods from Calcutta to Madras by means of another vessel or the clearance after the withdrawal of notification were not relevant considerations, and that the lower authorities had erred in holding that the material date for this purpose, would be the date of clearance from Customs at Madras Port. It was contended that the authorities failed to appreciate that Section 12(1) of the Customs Act was the only charging section, and the rate prevailing on the date on which the ship carrying the goods arrived in the Territorial Waters of India was the only applicable rate, and that the authorities had erred in holding that the rate of duty would be the rate prevailing on the date on which the Bill of Entry was admitted.
8. The factual position was reiterated to the effect that the ship carrying these goods had, in any case, reached Calcutta Port by 31st December, 1978 when the exemption was in force, and before that it had arrived in Madras and that the goods had been landed at the Calcutta Port before 1.1.1979 with effect from which date the exemption notification was withdrawn, and that as such, the subsequent withdrawal could not have effected this consignment, import in respect whereto had been completed during the operation of the exemption notification.
Reliance was also placed on two decisions of Bombay High Court, namely, (1) M.S. Sawhney v. Sylvania and Laxman 77 BLR 380 and (2) Synthetics and Chemicals Ltd. (1980 ELT 414) in support of their plea that the only relevant effective date was that of entry into India including territorial waters thereof and that the vessel carrying goods having been shown to have reached Madras Port during December, 1978 and, in any case, having entered territorial waters of India when it entered Calcutta Port on 23.12.1978, the benefit of the exemption notification then prevailing was certainly available to the appellant, and it was wrongly withheld, and, that the amount realised on account of countervailing duty was liable to be refunded.
9. They further pleaded that not only the Appellate Collector had not passed any speaking order, to justify his conclusions, they have also been subjected to discrimination inasmuch as certain importers whose goods had reached Bombay Port prior to 1.1.1979 have been given the benefit of exemption notification because the Bombay Collectorate was following the decision of the Bombay High Court referred to above and that this variation in practice adopted by the Madras Customs authority was certainly violative of principle of equality, as enshrined in Article 14 of the Constitution. It was stressed at the end that subsequent journey of the goods from Calcutta to Madras by another coastal vessel ought not to have been taken into consideration and had the appellant been aware of any such interpretation by the Customs authorities, they would have taken the dell-very at Calcutta Port itself by presenting the Bill of Entry there as has been done by the importers in Bombay who have been given the benefit because of the mere entry of the ship into the territorial waters near Bombay Port prior to 1.1.1979. It was also pleaded in support of this contention that the goods had touched Madras Port during December, 1978 inasmuch as Bill of Entry in anticipation of the arrival of the Vessel had been presented at Madras Port on 26.12.1978 and even assessment had been made on the bails thereof but the same had been cancelled m the ship did not actually call at the Madras Port and this had given rise to anomolous consequences for the appellant, which damage was sought to be remedied through the revision petition filed before the Government.
10. On the appeal being received here, it was first taken up for hearing on 3.1.1983. After some preliminary hearing, when Shri M.A, Rangaswamy, Advocate appearing for the appellant formulated the point in controversy, some information was felt necessary by the Bench and it was accordingly directed that the appellant should submit following information by means of documentary evidence: (1) Madras Port Trust's certificate showing the date when the subject vessel arrived at Madras Port.
(2) Calcutta Port Commissioner's certificate showing the date when the ship arrived at Calcutta Port.
(3) Date of entry inwards of the vessel at Calcutta and date of presentation of the Bill of Entry at Calcutta, as certified by Customs.
(4) Navigation chart sea route followed by the vessel between Calcutta and Madras showing whether at any stage the vessel went out on the high seas beyond territorial waters of India during this voyage.
(5) A copy of Bombay High Court judgment in Sylvania Laxman's case relied on by the appellants.
11. The appeal was then ordered to be posted for hearing on 8.2.1983 on which date, Shri M.A. Rangaswamy appeared for the appellant and the Department was represented by Shri M. Chatterjee. The learned Advocate submitted that the appellant had been able to procure only two of the documents out of the five required by the Bench on the previous hearing which information has been conveyed separately also by a letter dated 8.2.1983. The information supplied by means of this letter as well as verbally, indicated that besides filing photostat copies of the Bombay High Court's Judgment in the 'Sylvania and Laxman case', the appellant had also submitted a copy of the Certificate in original, from Calcutta Customs House showing the date of entry of the vessel "Banglar Progoti", together with three photo copies thereof certifying that the vessel was given entry inwards in Calcutta on 1.1.1979, implying that it would have been at Sandheals in Indian territorial waters not later than 31.12.1978. Since the learned advocate expressed inability in court on that date, namely, on 8.2.1983, in respect to other information about which documentary evidence was required and appealed for more time, one adjournment was given upto 11.3.1983. He however, admitted in response to a query from the Bench that the ship had not been given any entry Inwards in Madras Port prior to 31.12.1978.
12. In view of the decision of the Bombay High Court, the departmental representative, Shri M. Chatterjee was asked to verify about the practice at Bombay Customs House, as to whether the said Customs House was not levying any duty on the goods, as totally exempted on the date of arrival of the vessel in territorial waters of India. The matter was fixed for hearing on 7.4.1983 and in the meantime another written reply was submitted by the appellant bearing the date 30.3.1983 in which, after referring to the Calcutta Port Commissioner's certificate regarding arrival of the ship in the Calcutta Port on 31.12.1978 and date of entry Inwards of the Vessel in Calcutta on 1.1.1979, and after referring to the judgment of the Bombay High Court in Sylvania Laxman case, it was pleaded that it was not possible to get evidence about the fact that the Vessel, "Banglar Progoti was diverted to Calcutta on account of congestion in Madras Port, which was attributed to lapse of four years' time. It was further averred that even otherwise the Madras Port Authority was not cooperating because they could legitimately apprehend that the burden of the duty which fell on the appellant for failure to call at Madras Port before 31.12.1978, which was the normal expected period, the appellant could very well lay claim for damages against them. They, however, placed on record copy of a letter given by the Shipping Agent, reproducing a message dated 23.12.1978 received from the Master of the Ship in question. It was, however, clarified that no positive date showing arrival of the ship at Madras Port could be ascertained but it was understood that the said vessel did not come into the harbour at Madras nor could it be said with any certainty that the vessel had come into the territorial waters of India off Madras, 13. After available material had been placed on record that was considered relevant by the Bench, the learned Counsel of the appellant addressed arguments, giving a resume of the facts as set out in the grounds of appeal. It was strenuously argued by the learned Counsel that a reading of Section 12 of the Act which was the charging section, makes it unmistakably clear that the taxable event was the date of import of the goods into India, and that by virtue of the definition as comprised in Sub-section (27) of Section 2 of the Act, "India" included the "territorial waters of India". The learned Counsel thus built up his arguments that firstly the message received from the Captain of the ship as placed on record indicated that ship was originally bound for Madras Port, but on or around 23.12.1978, it was diverted towards Calcutta Port where it reached, according to the Certificate supplied by the Calcutta Port Trust, on 31.12.1978, and the entry Inwards at the said Port was granted on 11.1979. On these premises, the learned Counsel urged that even though it be assumed for lack of evidence that the vessel carrying these goods had not entered the territorial waters of India off Madras Port, and it could have been diverted to Calcutta while still in International Waters, but there was definite evidence placed on record showing that ship had reached Calcutta Port on 31.12.1978 and con-sequently, the import into India was completed with effect from the said date and since the exemption was still available on that date, i.e., 31.12.78, the subsequent transhipment of the good from Calcutta to Madras by means of a coastal vessel or their clearance from Customs at Madras Port, by presentation of bills of entry on later dates were not relevant and material considerations.
14. The learned Counsel made a pointed reference to the practice at Bombay Port, where the importers have been able to avail of the exemption because of the judgment of the Hon'ble High Court of Bombay holding that in the case of complete exemption from duty, mere entry into Territorial Waters of India, was enough by virtue of Section 12(1) of the Act, and that Section 15(1) or proviso thereof came into play only if the goods initially attracted some duty and it was only a case of variation in the rates, in which event it could be legitimately averred that the rate which was prevailing on the date of presentation of the bill of entry or the clearance of the goods from the Bonded Warehouse, or the date of entry Inwards in terms of the proviso, would be the crucial date for purpose of computation and quantification of the rate of duty. The learned Counsel made detailed reference to judgments of the Hon'ble High Court of Bombay, firstly in the Sylvania and Laxman case, followed in the second case, namely, Synthetics and Chemicals Ltd. as reported in 1981 ELT 414, and also the case of New India Industries Ltd. v. Union of India (Bom.) reported in 1982 ECR 782D.15. The learned Departmental Representative, though conceded the assertion that the Government had accepted the view of the Bombay High Court as given in Sylvania Laxman case, and that the practice followed, particularly in the Bombay Customs House, was as alleged by the learned Advocate for the appellant, namely the date of arrival of the goods in territorial waters of India, was being recognized and that the goods were being cleared from customs, free of duty without adverting to the date of bill of entry, or the entry Inwards, strenuously pinpointed the distinction that every thing depended upon the facts of each individual case, and contended that in this particular matter, which is the subject matter of appeal before us, it had not been proved, as a fact, that the goods had entered the territorial waters of India during the operation of the exemption. He thus urged that this vital fact having remained unestablished, the appellant could not have recourse to the authorities of the Bombay High Court and the practice prevailing in the Bombay Customs House, or the acceptance of the judgment by the Government.
16. In view of the nature of the controversy and peculiar facts of the case, we have given our very careful and anxious thought to the matter.
We find ourselves in agreement with the learned Departmental Representative's contention that the most crucial requirement to be seen and determined is as to the date of import of the goods in India, as a fact (emphasis ours) though, in that context, the question as to what could be the date of their entry into the territorial waters of India, may be relevant. There is thus no marked difference of opinion on the legal proposition because as conceded by the learned Departmental Representative, in view of the judgment of Bombay High Court in Sylvania Laxman case, as followed up in subsequent cases, the practice in Bombay Port has been to give recognition to the fact of arrival of the vessel carrying particular consignment in the territorial waters of India, though the presentation of Bill of Entry as well as entry Inwards may have been of some subsequent date.
17. The crux of the problem, therefore, would be to determine the date of import of the goods into India which may include, in a given situation, the arrival of the vessel in the territorial waters of India. The appellant has tried to oversimplify the matter by relying first on the fact that the vessel was presumably somewhere in the territorial waters of India near Madras Port around 23.12.1978, and that Madras being the Port of destination and that the diversion to Calcutta being not of appellant's own choice, the presence of the ship off Madras Port ought to be considered as Entry into India for the purpose of Section 12(1) of the Act. This plea is sought to be reinforced from the fact that even though it may be contended by the Revenue that the ship had not actually entered Madras Harbour but the very fact that the Ship had reached Garden Reach Calcutta) on 31.12 78 (as evidenced by the Certificate issued by Calcutta Port Authorities), ought to be sufficient to hold that the import into India of the goods stood effected and completed on that date. It is contended that the goods having been off-loaded at Calcutta Port, and the subsequent transhipment being by means of a coastal vessel; the material date in this case has to be taken to be 31.12.1978, and that in view of the accepted position that the fact of entry of vessel into the territorial waters of India is determinative of the question, the date of presentation of Bill of Entry or that of entry Inwards at the Madras Port may not be a relevant consideration and so the subject consignment ought to have been held to be entitled to the benefit of exemption from countervailing duty as prevailed up to 31.12.1978. We have carefully analysed the authorities cited and relied upon by the learned Counsel for the appellant in the light of the suggestions made by him but as already indicated in the foregoing discussions, the most relevant consideration would be the question of fact, as to arrival of the vessel, carrying goods, in India and for that further pertinent point would be as to whether that arrival has to be confined to the Port of destination, or as to whether the arrival of the vessel anywhere in the territorial waters of India, can be taken into account.
18. We were inclined to consider the submissions made on behalf of the appellant, on the basis of the authorities of the Hon'ble High Court of Bombay, on which the learned Counsel for the appellant placed reliance, but on going through a judgment of the Hon'ble High Court of Kerala in case of Shri Ramalinga Mills Private Ltd. and Ors. v. Assistant Collector of Customs and Anr. 1982 ECR 472D Kerala, to which the learned Counsel himself made a reference in his written submissions, we find that the case in hand is entirely distinguishable from those considered by the Bombay High Court. In a very lucid discussion, the Hon'ble High Court of Kerala has drawn a remarkable distinction in the situation where the vessel arrives by the scheduled date in the territorial waters off the Port of destination, where the importer had intended to effect the import, as against the calling of the ship or arrival of the ship at other Ports in India and in that course passing through the territorial waters. During the course of discussion the Hon'ble High Court raised the query which we reproduce below, to bring into the focus the point calling for adjudication.
19. However, before that, we consider it appropriate to narrate briefly the facts of the case covered by the judgment of the Honble Kerala High Court where the Port of destination was Cochin and the ship carrying the consignment of viscose staple fibre reached Cochin after 31.I2.1978 which was the date of expiry of the Exemption Notification but before that it had reached Bombay as early as on 28.12.1978. It had thus obviously been in the territorial waters of India and further Inwards having called in the Port of Bombay and the subject goods alongwith the ship had crossed even the customs barrier of the Bombay Port where it stayed for some days, before setting sail again for Cochin, and in expectation of the arrival of the ship at Cochin Port much earlier, even the Bill of Entry as in the present case, had been presented before 31.12.1978 ; the actual date being 21.12.1978 indicating the arrival of the vessel at Cochin by 25.12.1978. These facts, namely the arrival of the vessel in the territorial waters of India on Bombay Port on 28.12.1978, and the submission of the Bill of Entry in the Port at Cochin, by the Clearing Agents were urged to be circumstances entitling them to the Exemption on the basis of the notification which expired on 31.12.78 as there also the contention was that the dutiable event under the relevant enactments was of the import of the goods into India and that read with Section 2(27) of the Act, this would include the "territorial waters of India".
20. It was in this setting of facts that the question was posed for determination as follows: Is the importation really complete when the vessel crossed the territorial waters around Bombay or was berthed in the Port, although the importer intended the Port of destination as Cochin and every other attending net connected with the import was to be performed in Cochin : This is the problem posed for decision.
21. After very analytical examination of all the case law, including the two judgments of the Hon'ble Bombay High Court, reported as Sylvania Laxman case and Synthetics & Chemicals Ltd. and also all relevant provisions of law, including the definition as well as the provisions of the Act, on which the learned Counsel in this case also, has laid stress, the Hon'ble High Court of Kerala held in firm and clear terms that the act of importation is not complete if a ship merely enters some other Port with goods on board, which is not the destined Port of discharge of those goods. The cases of Bombay High Court were clearly distinguished on the ground that there the ship in one case, namely, Sylvania Laxman case, had reached the territorial waters of the Port of destination itself, namely, Bombay, whereas in other two cases, namely, Synthetics & Chemicals Ltd, and the New India Industries Ltd. v. Union of India they had arrived at the Port of destination and then taken to the bonded Warehouse and subsequently released. It was because of this factual position that the concerned ship, had entered the territorial waters of the Port of intended destination, it could be legitimately said that arrival in territorial waters around the Port of Intended import should be deemed to be import into India, in view of the definition contained in Section 2(21) read with Section 2(27).
22. It was categorically held that where a ship with goods intended for an importer at one Port, has other merchandise dischargeable at other Ports in India, calls on some of such other Ports in India, before reaching the Port of destination of the disputed consignment, for discharging cargo in respect of which importation was contemplated only in that particular Port by the intended import, it could not be said that importation had taken place as soon as the ship entered territorial waters while touching, calling at other Ports for the purpose of discharging other consignments. His Lordships highlighted the incongruities resulting from such an interpretation, observing that this would lead to disastrous and absurd consequences, which could not have been intended by the statute at all, and holding that import generally takes place as a result of transaction between traders under definite conditions to be fulfilled by the importer at the Port of importation in terms of the Import Policy, import of goods takes within its hold not only the goods but also the person who is the contracting party to the transaction which "propels the import of the goods". In other words, the ingredients of the term of 'import' have to be linked with the importer of the destination...and consequently the mere fact that goods touched a Port in which the importer had no intention whatsoever to have the goods delivered from the ship, will not amount to import, for the simple reason that the importer had no intention whatsoever to have access to the goods, except at the Port of destination, which he has specified in the contract with the foreign seller.
23. We find the present case to be exactly on all fours with the case which was before the Hon'ble Kerala High Court, and the situation is positively distinguishable from the cases decided by the Hon'ble High Court, of Bombay and the resultant practice at Bombay Port would also not be a relevant consideration.
24. We find on the facts of the present case that (1) the Port of destination was admittedly Madras, and (2) the import was intended to be, effected at Madras which conclusion is fortified from the fact that, according to the appellant's own case, although the goods had been discharged at Calcutta Port after the entry Inwards of the ship on 1.1.1979, the appellant did not take any steps to have the goods delivered at Calcutta but seems to have insisted on the delivery of goods at Madras Port, which inference can certainly be drawn from the fact that the goods ha to be transhipped from Calcutta to Madras by another ves6el, and Bills of Entry were presented almost after two months, i.e., in February and March, 1979.
25. The appellant could have some case if it had been established as a fact that the diversion of the ship to Calcutta was not due to congestion at Madras Port, as seems to have been contended in the grounds of the appeal, but the copy of the message from the Master of the Ship which has been placed on record merely indicates that somewhere around 23.12.1978, decision was taken to first take the skip to Calcutta. There is no indication from this message that this was because of failure to find berth in Madras Port. It could as Well have been because of some other emergency or urgency, such as requirement of haying first to discharge some other goods at Calcutta. There is also no indication from this message that the ship was diverted to Calcutta after entering the waters anywhere near Madras Harbour. The appellant has rather given in writing that it is not possible to procure such an evidence. There is also no evidence in support of the contention that the goods had been transhipped to Madras, by a coastal vessel, because no certificate to that effect has been produced. It was also conceded at the bar that for navigational purposes the ship could have gone out of the territorial waters in the course of journey of goods from Calcutta to Madras.
26. From all these facts, the import of the goods at Calcutta could not be said to have been completed because if that were so, it would again have necessitated entry outwards for the ship about which fact there is neither any indication nor even a plea. That being not so, the only inference that is possible is that the goods had not been unloaded in Calcutta Port in that sense, which would have amounted to clearance from customs barrier. The intention of the importer is positively established from the fact that in spite of the fact that arrival of the goods in Madras was delayed for two to three months, even then all formalities laid down by Customs authorities were effected in Madras, and that at no stage attempt was made Ito get the clearance at Calcutta. We are, therefore, of our most considered view, that on the basis of a very clear line of distinction drawn by the Hon'ble High Court of Kerala and in view of the facts of the case as detailed above, it is a case where mere arrival of the ship having these goods on board, at Calcutta Port, on 31.1 "'.1978 cannot be a relevant consideration so far as these goods destined for import at Madras Port are concerned and which were actually cleared from customs at Madras Port and which was, after the withdrawal of the Exemption in respect to countervailing duty.
27. We also do not find it possible to subscribe to the plea of the learned Counsel that principle of "promissory estoppel" would apply in this case and that the import having been effected by the appellant on the assumption that the exemption would be available, the appellant cannot be made to suffer adversely by the factum of subsequent withdrawal, because it is an established proposition of law that there cannot be any estoppel against the Government or statute. This view has been confirmed in a very recent judgment of the Hon'ble High Court of Delhi (DB) reported in Khandelwal Metal & Engg. v. Union of India 1983 ELT 292 (Delhi.) : 1983 ECR 91D. This view has been further propounded in very firm terms by a full Bench of the Hon'ble High Court of Delhi in another case, namely, Bombay Conductors and Electricals Ltd. and Anr. v. Shri K. Chandramouli, Under Secretary 1983 ECR 315D, where it was held that issuing of a notification is a legislative and not an executive action and hence plea of promissory estoppel not available and that even time bound notification can be withdrawn before stipulated time.
28. As a result of the view, we have taken, there is no other course open but to dismiss the appeal, and the same is accordingly dismissed.