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Titagarh Jute Factory Vs. Assistant Collector of Customs for Import Bond Department and ors. - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtKolkata High Court
Decided On
Case NumberCivil Order No. 10416(W) of 1984
Judge
Reported in1985(4)ECC261,1988(36)ELT55(Cal)
ActsCompanies Act; ;Customs Act, 1962 - Sections 15, 15(1), 58, 59 and 68; ;Customs Rules; ;Customs Regulations
AppellantTitagarh Jute Factory
RespondentAssistant Collector of Customs for Import Bond Department and ors.
Appellant AdvocateBhaskar Gupta and ;Samir Chakraborty, Advs.
Respondent AdvocateR.N. Das and ;Mihir Chakraborty, Advs.
DispositionApplication allowed
Cases ReferredPrakash Cotton Mills (P) Ltd. v. B. Sen and Ors.
Excerpt:
customs - date of entry--goods stored by petitioner in private bonded warehouse--presentation of bill of entry for home consumption and payment of duty, interest and other charges by petitioner --goods not cleared owing to jute mill workers' strike--petitioner applying for debonding of warehouse and requesting authorities not to demand increased duties--no action by customs authorities--finance bill increasing auxiliary duty by 10 per cent ad valorem--demand of increased duty by authorities at time of clearance--not justified--petitioner had done what all it could to clear goods--goods cleared when petitioner applied for debonding of warehouse on 29th february, 1984--customs act, (52 of 1962), sections 58, 59, 68. - .....1984, the petitioner duly submitted bills of entry for home consumption in respect of the said goods warehoused in the said factory premises of the petitioner, before the respondent authorities who duly assessed the duties of customs payable thereon. the petitioner, during the period from 6th january, 1984 to 29th february, 1984, paid the entire duties of customs as assessed by the respondent authorities on the said goods as also interest thereon in terms of the bonds furnished by the petitioner as aforesaid and/or section 59 of the said act to the respondent authorities.8. however, as the all india jute workers strike commenced from 16th 1984 for an indefinite period and the workers did not allow any movement of men or material from any jute factory in the country. including those.....
Judgment:

Ajit Kumar Sengupta, J.

1. The petitioner is a company incorporated under the U.K. Companies Act. It has Jute Mills in Titagarh in the District of 24-Parganas. For running of the said Jute Factories, the petitioner imports from time to time machinery and spares under licence granted by the Central Government. Under the Customs Act, 1962 and the Rules and Regulations framed thereunder an importer is allowed to warehouse the imported goods in a bonded warehouse or clear the same immediately for home consumption after filing appropriate Bills of entry for the same.

2. Section 58 of the said Act enables the Customs Authorities to licence private warehouses wherein dutiable goods imported by or on behalf of the licensee or any other imported goods in respect of which facilities for deposit in a public warehouse are not available could be deposited without payment of duty.

3. On or about August 27, 1982 the petitioner applied to the Customs Authorities for licensing its No. 2 mill at Titagarh as a licensed private bonded warehouse under Section 58 of the said Act wherein the petitioner could warehouse, until release thereof for home consumption, the jute mill machinery and spares imported and/or to be imported by it from time to time, as aforesaid.

4.. By an order dated March 3, 1982 the Assistant Collector of Customs licensed the said No. 2 mill of the petitioner (hereinafter referred to as the said premises) as a licenced private bonded warehouse under Section 58 of the said Act.

5. Under Section 59 of the said Act the importer of any dutiable goods which have entered for warehousing and assessed to duty under section has to execute a bond binding himself in a sum equal to twice the amount of the duty assessed on such goods on the conditions as laid down in the said section.

6. The petitioner was allowed to warehouse under Section 59 of the said Act by the respondents, consignments of jute :mill machinery in the West Bengal State Warehousing Corporation's Customs Bonded Warehouse. However, after licensing of the said factory premises under Section 58' of the said Act, the respondent authorities allowed the petitioner to warehouse the said consignments along with other consignments of the jute mill spares and machinery imported by the petitioner, in the said factory premises under Section 59 of the said Act.

7. In or about January 1984, the petitioner duly submitted bills of entry for home consumption in respect of the said goods warehoused in the said factory premises of the petitioner, before the respondent authorities who duly assessed the duties of Customs payable thereon. The petitioner, during the period from 6th January, 1984 to 29th February, 1984, paid the entire duties of Customs as assessed by the respondent authorities on the said goods as also interest thereon in terms of the bonds furnished by the petitioner as aforesaid and/or Section 59 of the said Act to the respondent authorities.

8. However, as the All India Jute Workers strike commenced from 16th 1984 for an indefinite period and the workers did not allow any movement of men or material from any jute factory in the country. including those of the petitioner, it became impossible for the petitioner to physically remove the said goods from the said factory premises inspite of paying the entire duties of Customs as levied thereon by the Customs Authorities along all other charges.

9. In the circumstances, by a letter dated 28th February, 1984 the petitioner drew the attention of the respondent No. 1 to the aforesaid facts and requested him to cancel the bonded godown so that the said consignments could be considered to be de-bonded. In the alternative, if the same was not possible, the petitioner requested the respondent No. 1 not to demand and/or require the petitioner to pay any increased rate of duties to the Customs if any as might be introduced by the Finance Bill 1984 which was to be announced on 29th February, 1984, as the petitioner had duly paid all duties of Customs on the said goods as the actual physical removal of the said goods thereafter from the said bonded warehouse was not possible due to circumstances completely beyond the control of the petitioner.

10. Thereafter, by a letter dated 29th February, 1984, the petitioner requested the respondents No. 1 to return the keys of the said premises to the petitioner as the petitioner had already surrendered the said godown as aforesaid.

11. However, the petitioner received no reply whatsoever from the respondent No. 1. In the circumstances, as the Jute Mill Workers Strike was expected to be over in the very near future, by a letter dated 29th March, 1984, the petitioner again requested the respondent No. 1 to allow clearance of the said goods in terms of the aforesaid letters dated 28th February, 1984 and 29th February, 1984.

12. However, the petitioner received no response whatsoever from the respondent No. 1. In the meanwhile the jute mill workers All India Strike ended. In the circumstances, by a letter dated 9th April, 1984 the petitioner again requested the respondent No. 1 to look into the matter and to return the keys of the said premises to the petitioner at the earliest.

13. On or about 30th April, 1984, the petitioner received a letter dated 23rd April, 1984 from the respondent No. 1 herein in reply to the aforesaid letters dated 29th March, 1984 and 9th April, 1984 of the petitioner, the respondent No. 1 called upon the petitioner to make the godown empty by clearing all the consignments lying therein so as to enable the respondent No. 1 to take further action in this regard.

14. The case of the petitioner is that the petitioner has not received any reply from the Collector of Customs to its letter dated 28th February, 1984 by 'which it requested the Assistant Collector to immediately de-bond of the premises. Thereafter the petitioner went to take delivery of the said goods from the said Godown, the petitioner was informed by the respondent No. 1 that until the petitioner paid an additional auxiliary duty to Customs @ 10% ad-valorem in respect of the said goods the petitioner would not be allowed clearance thereof. It was alleged by the respondent authorities that in view of the fact that by the Finance Bill, 1984, auxiliary duty of Customs had been increased by 10% ad valorem on and from 1st March, 1984 the petitioner was allegedly liable to pay the same in respect of the said goods. This action of the Customs authorities has been challenged in this application.

15. This application has been moved upon notice. Mr. R.N. Das, learned Counsel appearing for the Respondents has submitted that this matter can be disposed of without affidavit but the respondents do not admit the allegations made in the petition. He has submitted that under Section 15(1)(b) of the said Act the duty is payable at the rate when the goods are actually removed from the Warehouse under Section 68 of the said Act. He has relied on a decision of the Supreme Court in the case of Prakash Cotton Mills (P) Ltd. v. B. Sen and Ors. reported in A.I.R. S.C. 675. Where the Supreme Court held that the rate of duty applicable to the imported goods has to be determined according to the law which was prevalent on the date when they were actually removed from the warehouse. There the question was whether in view of the devaluation of the currency on June 6, 1966 the Customs Authorities were justified in adopting new rate of exchange at the depreciated value of the currency into consideration in respect of the consignment in question which was taken in the warehouse before the amendment of Section 15 came into force. From the facts of that case it appears that the Bills of Entry were lodged and the goods were assessed for duty by the Customs Authorities before the amendment of Section 15 was made, but the goods were cleared from the warehouse after the said amendment came into force. Mr. Das has submitted that the facts and circumstances of this case are identical with that of the Supreme Court decision. Therefore, the petitioner must pay the additional duty' imposed by the Notification dated 1st March, 1984.

16. Mr. Bhaskar Gupta, learned Counsel for the petitioner on the other hand has submitted that the facts of the instant case are different. The goods in this case were not only assessed but were cleared. Once the goods have been cleared the question of payment of any additional duty after such clearance does not and cannot arise at all.

17. I have considered the rival submissions. The Jute Machinery and Spare Parts were imported by the petitioner. The Bills of Entry were lodged and the assessment had been made and the goods were allowed to be cleared on payment of duty with interest thereon at the rate of 12%. Such assessment was made on 2nd February, 1984 as will appear from the Bills of Entry for ex-bond clearance for home consumption. The entire duty and the interest had been paid by 29th February, 1984.

18. The endorsement in the relevant bills of entry is to the following effect :

'Goods may be allowed to be cleared on payment of duty with interest thereon @ 12% on the total duty with effect from 2.2.1984 upto the dito of clearance please.'

19. By 28th February, 1984 the entire duty along with interest calculated upto 29.2.1984 had been paid.

20. It is not in dispute that the goods in question were allowed to be cleared on payment of the duties and were kept in the customs bonded warehouse. But after licencing of the factory premises of the petitioners under Section 58 of the said Act, the Customs Authorities allowed the petitioners to warehouse the said consignment along with other consignments imported by the petitioners in the godown of the petitioners' at the said factory premises under Section 59 of the said Act. By a letter dated 28th February, 1984 the petitioners intimated the respondents that because of the All India Jute Workers' strike although they were ready to debond the consignment but they could not do so until the strike was called off. The petitioners requested the authorities to cancel the bonded godown so that the consignment can be taken as debonded. It was also stated therein that in the event request by the petitioners was not acceded to then the petitioners could not be directed to pay any enhanced duty if announced on or after 29th February, 1984. By a letter dated 29th February, 1984 the petitioners also requested the respondents that the said godown was surrendered and the key of the said godown should be hended over to the petitioners. The petitioners thereafter by a letter dated 29th March, 1984 requested the Assistant Collector of Customs to allow the clearance of the said goods in terms of the aforesaid letters dated 28th February, 1984 and 29th February, 1984. No response was received from the Assistant Collector of Customs. The All India Jute Mill Workers' strike ended on 9th April, 1984 and again the petitioners requested the Respondents to return the key of the godown at the earliest. By a letter dated 9th April, 1984 the Respondent No. 1 called upon the petitioners to make the godown empty by clearing all the consignments lying there so as to enable the Respondent No. 1 to take further action in this regard. However, when the petitioner went to take delivery of the goods from the said godown the petitioner was informed by the Respondent No. 1 that since 1st March, 1984 auxiliary duty of customs has been increased by 10% ad valorem and unless the said enhanced duty is paid the goods cannot be released. The facts are not in dispute. The only question is whether having regard to the facts and circumstances of this case the petitioner is liable to pay the additional duty levied on and from 1st March, 1984. No doubt that judgment of the Supreme Court relied on by Mr. R.N. Das, learned Advocate appearing for the Respondents apparently supports the contention of the Respondents. But on the facts of this case, the said decision has no application. The goods in this case were assessed and were allowed to be cleared. The goods were lying at the Custom Bonded Warehouse but before 1st March, 1984 the goods were removed to the bonded warehouse of the petitioner within the mill premises. Under Section 68 of the said Act the importer of any warehoused goods may clear them for home consumption if the conditions therein are satisfied. There is no dispute that conditions laid down in Section 68 have been satisfied by the petitioner. The Bills of Entry for home consumption in respect of the goods were duly leviable on such goods and interest and other charges had been paid and order for clearance of such goods for home consumption was made by the proper officer on 2nd February, 1984. Because of the strike the petitioner could not remove the goods from its bonded warehouse within the mill premises. That is the reason why the petitioner asked for debonding of the warehouse so that the goods may be deemed to have been cleared for home consumption under Section 68 of the said Act. The petitioner asked for the return of the keys of the bonded warehouse as they had surrendered the godown as being debonded but no action was taken by the Respondent No. 1 for the respondents. The respondents were simply required to hand over the keys of the godown to the petitioners to signify the symbolic clearance of the goods from the bonded warehouse. This was not done. It has not been stated what prevented the respondents from acceding to the request made by the petitioner. There was no fault of the petitioner. The petitioner has done what could have been done having regard to All India Jute Workers' strike. On the facts and 'the circumstances of this case it must be held that goods were cleared by the petitioner on 29th February, 1984 when they asked for the debonding of the warehouse within the factory premises of the petitioner.

21. In the result this application succeeds. The respondents are directed to forthwith allow the clearance of the goods details whereof are contained in Annexure 'D' to the petition without demanding any further duty of customs and to cancel the warehousing bond given by the petitioner within one week from the date of communication of this order.

22. Let a plain copy of this order and judgment countersigned by the Assistant Registrar (Court) be handed over to the learned advocates appearing for the parties concerned.


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