Customs, Excise and Gold Tribunal - Bangalore
Bharat Electronics Ltd. vs Cc on 17 March, 1998
Equivalent citations: 1998(77)ECR358(TRI.-BANGALORE)
ORDER Lajja Ram, Member (T)
1. M/s. Bharat Electronics Ltd. (BEL) have been allowed to pursue this appeal with the Tribunal by the Committee on Disputes under their Minutes of the Meeting held on 28.9.1995 circulated under No. COD/25/1995 LC dated 6.10.1995 (Item No. 1 refers).
2. The only issue for our consideration in this appeal is what is the relevant date for calculating the price of the goods imported with reference to the rate of exchange. The Assistant Collector of Customs, LCD., Bangalore had held that the relevant date for determination of the rate of duty and the exchange rate was the date when the Bill of Entry was filed at the LCD. in terms of Section 14 of the Customs Act, 1962. He had observed that the importers had not submitted any evidence or proof that they had approached the ICD to file the Bill of Entry before the sub-manifest was filed, nor had they lodged any protest to this effect at ICD at any time. The order passed by the Assistant Collector of Customs was confirmed by the Collector of Customs (Appeals), Madras, who observed as under:
Ground II: Section 14 of Customs Act, 1962 clearly lays down that the crucial date for determining Exchange rate is the date of presentation of the Bill of Entry under Section 46 of Customs Act, 1962. The date of presentation of manifest or sub-manifest or the date of landing of the goods etc. have no relevancy to the issue on hand.
2.1. We have heard Shri V. Bhujang Rao, Senior Store Officer for M/s. BEL and Shri R.S. Sangia, JDR for the respondents/Revenue.
3. We find that the law on this point is clear. Under Section 14 of the Customs Act, 1962, the price for the purposes of charging the duty of Customs is required to be calculated with reference to the rate of exchange as in force on the date on which the bill of entry is presented under Section 46 of the said Act. In this case the bill of entry bearing No. 480/87 was presented under Section 46 of the Customs Act on 16.11.1987 and the rate of exchange as in force on that date is required to be taken into account for the purposes of calculating the price in terms of Section 14 of the said Act.
4. The appellants have pleaded that under Public Notice No. 44/88-Cus. dated 2.5.1988, the Collector of Customs, Bangalore had prescribed the procedure for admitting the bills of entry prior to receipt of sub-manifest from the gateway port of entry, under the Prior Entry System. The procedure prescribed is that the steamer agent should obtain the sub-manifest from the Customs soon after the main manifest is filed at the gateway port of entry and the said sub-manifest should be presented at Inland Container Depot, Bangalore, to ensure that the bills of entry are filed and accepted at Inland Container Depot only after the main manifest is filed at the Port of Entry. In such a situation, the procedure prescribed that the steamer agents were required to obtain the sub-manifest from the Customs soon after the main manifest is filed at the time of gateway port of entry. The sub-manifest was required to be presented at the ICD to ensure that the bills of entry are filed and accepted at Inland Container Depot only after the main manifest is filed at the Port of Entry. This procedure in no way affect the law as laid-down under Section 14 of the Act and for the purposes of applying the rate of exchange, it was the date on which the importers chose to file the bill of entry under Section 46 of the Act for assessment and clearances.
5. Reference was also made to the Bombay High Court's decision in the case of Assistant Collector of Customs v. Sylvania and Laxman Ltd., 1988 (19) ECR 192 (Bombay). The Hon'ble Bombay High Court had referred to the taxable event in terms of Section 12 of the Customs Act. The High Court had confirmed that in case of the goods entered for home consumption under Section 26 of the Act, the rate of duty applicable to imported goods shall be the rate in force on the date on which a bill of entry in respect of such goods is presented. Para 8 from that decision is extracted below:
8. It is necessary to examine the scheme of the Act as regards the chargeability in respect of customs duty. It is well settled that a clear distinction exists between the concept of chargeability and the concept of assessment or quantification of the amount payable by way of customs duty. It will be useful in this connection to refer to the observations of their Lordships of the Privy Council in Wallace Brothers and Co. Ltd. v. Commissioner of Income Tax, (1948) 16 ITR 240 which have been proved by the Supreme Court in Kesoram Industries and Cotton Mills Ltd. v. C.W.T., . Those observations run as follows:
...the rate of tax for the year of assessment may be fixed after the close of the previous year and the assessment will necessarily be made after the close of the year. But the liability to tax arises by virtue of the charging section alone, and it arises not later than the close of the previous year, though quantification of the amount payable is postponed.
These observations fully justify the clear distinction that exists inter alia between chargeability in respect of a tax or duty and the quantification of the amount payable in respect thereof. The only charging Section in respect of levy of customs duty is Section 12(1). As provided in that Section duties of customs shall be levied at such rates as may be specified under the Indian Tariff Act, 1934, or any other law for the time being in force, on goods imported into, or exported from India. Thus the levy of customs duty either in respect of import or export of goods is under this Section and such levy is subject to other provisions of the Act or any other law for the time being in force. The chargeability in respect of levy of customs duty arises when the goods are imported into India, i.e. when they cross the customs barriers as stated above. That event in the present case took place much prior to March 31, 1967 when the exemption Notification was operative. Such chargeability in respect of levy of customs duty ought not to be confused with quantification of the amount or an assessment thereof as provided under the Scheme of the Act. Section 15 of the Act specified the date for determination of rate or duty and tariff valuation of goods imported. In case of goods entered for home consumption under Section 26 of the rate of duty applicable to any imported goods shall be the rate in force on the date on which a bill of entry in respect of such goods is presented under that section. The assessment has to be made as provided in Section 17 of the Act. What Sections 15 and 17 provide is to determine the rate at which duty is leviable and to quantify the amount payable by way of duty but this is entirely different from 'chargeability' under the Act. Chargeability arises simply by reason of Section 12(1) of the Act and that takes place only when the goods are imported into India i.e. into the territorial waters of India.
6. The Hon'ble Supreme Court in the case of Bharat Surfactants (Pvt.) Ltd. v. UOI, 1992 (39) ECR 85 (SC) had held in para 5 as under:
The rate of duty and tariff valuation applicable to the imported goods is governed by Clause (a) of Section 15(1). In the case of goods entered for home consumption under Section 46, it is the date on which the Bill of Entry in respect of such goods is presented under that section.
The Apex Court had observed that in a case where the bill of entry had been presented before the entry inward of the vessel under a prior Entry System then it will be the date of the entry inward of the vessel and not the date of the presentation of the bill of entry under the prior entry system, which will be the relevant date.
7. In these proceedings, we are not concerned with the prior entry system under which a facility had been extended to the importers to file the bill of entries provisionally even prior to the date of entry inward of the vessels. As there is no dispute with regard to the facts and the law is clear on the subject, we consider that there is no infirmity in the view taken by the appellate authority in this case.
8. Taking all the relevant facts and considerations into account, we do not find any merit in this appeal and the same is rejected. Ordered accordingly.
Order dictated & pronounced in the Open Court on 17.3.1998.