Customs, Excise and Gold Tribunal - Delhi
Allibhoy Mohamed vs Collector Of Customs on 15 June, 1984
Equivalent citations: 1984(18)ELT413(TRI-DEL)
ORDER G. Sankaran, Member (T)
1. The captioned appeal was initially filed as a Revision Application to the Central Government which under Section 31-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.
2. The appellants imported a consignment of stamping foils by the ship MARTHA FISSER and warehoused the goods. On 9-6-1980 they presented a Bill of Entry for clearance of the goods from the warehouse for home consumption. On 10-6-1980 the goods were assessed to duty under Heading No. 32.04/12(1) of the 1st Schedule to the Customs Tariff Act, 1975 at 100% ad. val. (basic duty) plus 20% ad. val. (auxiliary duty) plus 8% ad. val. (countervailing duty equivalent to the excise duty under Item No. 68 of the Central Excise Tariff Schedule). The appellants disputed the assessment and claimed assessment at 40% ad. val. only in terms of Serial No. 12 of the Table annexed to Notification No. 29-Cus., dated 10-2-1979. Serial No. 12 read as "buckles and other embellishments for footwear". The claim was that the goods were to be used as embellishment in leather footwear manufactured by them. The Assistant Collector asked them to produce an end-use bond with 100% bank guarantee to cover the differential duty. In the meantime, Government of India, Ministry of Finance issued another Notification No. 170-Cus., dated 28-8-1980 deleting the aforesaid entry No. 12 relating to buckles and other embellishments for footwear. The Assistant Collector in his order dated 10-9-1980 held that since the Bill of Entry was for clearance of goods from the warehouse, the rate of duty applicable would be that which was in force on the date of actual removal of the goods from the warehouse in terms of Section 15(1)(b) of the Customs Act, 1962. Since the relevant entry had been deleted and the goods were still in the warehouse, he held that the concessional rate of duty in terms of Notification No. 29/79 would not apply to the goods and so he ordered assessment of the goods at the standard rate of duty.
3. The appellants pursued the matter in appeal. If was urged before the Appellate Collector by the appellants that the Custom House had tried to obtain the advice of the Law Ministry whether in terms of Notification No. 29/79 an end-use bond could be asked for from the appellants. In the process there was delay in clearance of the goods and in the meantime the notification came to be amended with the result that entry No. 12 in the Table to the notificati on got omitted. It was due to the delay and negligence on the part of the Custom House that the situation had changed with adverse consequences for the appellants. The Appellate Collector did not countenance these contentions and observed in his order dated 15-10-1980 that he could not go behind the causes for delay and that if the appellants felt aggrieved because they had to pay higher duty because of the delay in clearance, the proper forum for agitation would be a Civil Court and that he, as a quasi-judicial authority, would not be able to go into the matter. He, however, held that in terms of the Notification an end-use bond was not necessary. On the question whether stamping foils were at all embellishments within the meaning of the deleted entry in Notification No. 29/79, the Appellate Collector held that they were not. The present appeal is against this order.
4. The appeal was heard on 5-6-1984. Shir L.V. Balani, the learned Counsel for the appellants, made the following submissions :-
(i) In terms of the Tribunal's decision reported in 1983 ECR 258-D and 1983 ECR 894-D, the imported goods, namely, stamping foils, have been held to be embellishments within the meaning of Notification No. 29/79 ;
(ii) However, the question in the present case was whether in view of the deletion of the relevant entry No. 12 in the notification before the date of clearance of the goods from the warehouse, the benefit of the concessional rate of duty would still be available. Shri Balani claimed that the concession would be available despite the deletion of the relevant entry. Attention was drawn to a letter dated 9-6-1980 written by the appellants to the Assistant Collector setting out their claim that stamping foils were widely used in the leather footwear industry as embellishment and so were eligible for the concessional assessment. The letter further made it clear that in view of the impending presentation of the Budget the importers wanted to clear the goods immediately. In the alternative, the Assistant Collector might issue an appealable order so that the importers could get the case decided from the Appellate Collector before the Budget was presented, The request was repeated in a letter dated 17-6-1980 from the Counsel. However, it was only on 10-9-1980 that the Assistant Collector made his order denying the concessional assessment. In the said order, the Assistant Collector, in effect, admitted that the goods were entitled to the concessional rate and it was, therefore, that the importers were asked to furnish a bank guarantee. However, in the meantime, the relevant entry came to be deleted and the concession was no longer applicable ;
(iii) The notification in question has statutory force, reliance being placed in this connection on AIR 1957 S.C. 790. The appellants' right to the benefit conferred by the notification cannot be taken away or defeated by the procedural law contained in Section 15 of the Customs Act. Reliance was also placed in this connection on the Tribunal's decision reportedlin 1983 E.L.T. 1671 (CEGAT) ;
(iv) In the peculiar circumstances of the case, the Bill of Entry for clearance from the warehouse might be deemed to be constructively a Bill of Entry for home consumption and the provisions of Section 15(1)(a) of the Customs Act be applied to the instant case.
5. On behalf of the Revenue, the following submissions were made by Shri Sachar :-
(i) The appellants have no vested right in the matter of relief under the notification in question. They were entitled to only such rights as flow out of the provisions of the Customs Act;
(ii) In the facts and circumstances of the present case, Section 15(1)(b) and not 15(1) (a) applies ;
(iii) The Tribunal has no power to deem the ex-bond Bill of Entry constructively as a home consumption Bill of Entry to which Section 15(1)(a) applies.
6. We have carefully considered the submissions of both sides. The Tribunal in its order in Allibhoy Mohamed, Bombay v. Collector of Customs, Bombay reported in 1983 ECR 258-D (CEGAT held that as per the trade understanding and usage, stamping foils are embellishments and, therefore, entitled to the concessional rate of duty provided for in Notification No. 29/79-Cus. In the ordinary course, we would have had no difficulty in following this decision and passing a similar order. However, unfortunately for the appellants, there is a complicating factor in the present case. It is that the goods were'initially"bonded in a warehouse and the Bill of Entry for ex-bond clearance for home consumption was presented on 9-6-1980. By the time the Customs authorities took a decision in the matter, Serial No. 12 of Notification 29-Cus., dated 10-2-1979 (with reference to which Serial No. the appellantsi areo claiming relief) came to be deleted by Notification No. 170-Cus.,deted 28-8-1980. Therefore, though the appellants may have been entitled by the benefit of the notification on the date they presented the Bill of Entry, by the time the Bill of Entry was processed and a decision taken by the Assistant Collector on 10-9-1980, the concession was no longer available. According to Section 15(1) of the Customs Act, 1962, the rate of duty and tariff valuation in force-applicable to anyimported goods shall be the rate and
(a) in the case of goods entered for home consumption under Section 46, on the date on which a Bill of Entry in respect of such goods is presented under that Section ;
(b) in the case of goods cleared from the warehouse under Section 68, on the date on which the goods are actually removed from the warehouse.
In the present case, admittedly sought to be cleared from The warehouse umder Sectionu 68 therefore, Section 15(1)(b) squarely applies to the case the appellants' contention that it should be deemed that constructively the Bill of Entry was one for home consumptionattracting Section 15(1)(a) is devoid of substance and unacceptable. There is no running away formthe faxt that fact that the Bill of Entry was one for clearance of goods from the warehouse.
7. That the Noticicat on in question has statutory force need not be aouoted. However, the appellants' contention that the benefit of the notification cannot be taken away or defeated by the procedural law contained in Section 15 of the Customs Act is not tenable. We do not think that in the present case the appellants had any vested right to the concession contained in the notification. All that the notification said was that on certain goods (the present goods would fall in that group), the Central Government, by virtue of its power under Section 25(1) of the Customs Act, reduced the rate of duty to 40% ad. vol. Thereafter, the question whether a particular consignment was eligible for the concessional rate was to be determined only by the provisions of the Customs Act. Section 15 lays down the relevant date for determination of inter alia the rate of duty indifferent situations. situation in the present case is the one described in Section 15(1)(b) We cannot find fault with the denial of the concessional rate under the notification in respect of the present consignment. The reference to the Tribunal's order in 1983 E.L.T. 1671 (CEGAT) is of no assistance to the appellants. In that case the Tribunal was concerned with the question whether the right of appeal was a matter of substantive right and not merely a matter of procedure. It held that this right became vested in the appellants when the proceedings were first initiated against the appellants. Consequently, the Tribunal held that the requirement in Section 35-F of the Central Excises and Salt Act, 1944, requiring the appellants to make a deposit of duty and penalty as a pre-condition for an appeal would not be applicable when the show causs notice leading to the demand was served on the appellants on a date earlier to 11-10-1982, the date on which Section 35-F came into force. We may observe that this principle has no relevance to the facts of the case before us. This particular view has been over-ruled by a Larger Benchof this Tribunal in an order dated17-2-198 in Appeal No. ED(SB)A. No. 1 /61/83-B.
8. The appellants seem to be nursing a sense of grievance, apparently with cause, that the delay in Customs clearance of the goods has resulted in an increased duty burden on them. As the Appellate Collector has rightly observed, the proper forum for agitation of this matter is not quasi-judicial authorities functioning under the Act.
9. In the result, the impugned order is upheld and the appeal is rejected.