Customs, Excise and Gold Tribunal - Calcutta
Everett (India) Pvt. Ltd. vs Collector Of Customs on 31 December, 1984
Equivalent citations: 1985(21)ELT732(TRI-KOLKATA)
ORDER Harish Chander, Member (J)
1. M/s. Everett (India) Pvt. Ltd., 4, Government Place North, Calcutta-700001 had filed three revision applications to the Government of India, Ministry of Finance, Department of Revenue, New Delhi. After the coming into existence of the Tribunal, the said revision applications stand transferred to the Tribunal under Section 131B of the Customs Act and are being disposed of as appeals. Since the facts of three appeals are identical, the same are disposed of by a consolidated order. The details of the appeals are as under :
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Appeal No. Appellate Collr's. Adjn. Order No. Penalty
Order No. and and date
date
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CD(T)CAL-50/81 1699/80 dt. 16th 75/78 dt. 3rd Rs 17.055/-
Sept., 1980 January, 1980
CD (T) CAL-9/80 889/80 dt. 12th 280/78 dt. 20th Rs.12.060/-
May, 1980 July, 1979
CD (T) CAL-59/82 Cal-Cus-946 dt. 178/78 dt. 28th Rs.11.155/-
12th Nov., 81. Nov., 1980
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2. The facts of the three appeals are identical and I am discussing the brief facts of one case only in respect of Appeal No. C.D(T)CAL-50/81.
The appellant is Steamer Agent and there was a short-landing of one case machine, Line No. 109, ex. M. V. Mohneverett, Lot No. 478/78. As per certificate of Port Trust of Calcutta, the Steamer Agents were called upon to account for and explain why penal action under Section 116 of Customs Act, 1962, should not been taken against them for the short-landing of the cargo. In reply to the K.L. C., the Steamer Agent had admitted the short-landing. The learned Deputy Collector of Customs had imposed a penalty of Rs. 17.055/-. Being aggrieved From the aforesaid order, the appellant had filed an appeal before the learned Appellate Collector of Customs and before the learned Appellate Collector of Customs, the appellant had contended that Section 116 of the Customs Act, 1962, is the empowering section for imposition of penalty for not accounting of goods and is not applicable to short-landing of Napal cargo. The appellant has based his arguments on the grounds that Section 116 applies to three categories of goods-(a) those loaded in a conveyance for importation into India, (b) those transhipped into India under the Customs Act, 1962, (c) coastal goods. The appellant had further contended that the goods involved in the instant case were in transit to Nepal and therefore, do not fall in any of the three categories. The learned Appellate Collector of Customs did not accept the contention of the appellant. The learned Appellate Collector had come to this conclusion after examining the sample selection, Import General Manifests and Bills of lading covering what is commonly known as Nepal cargo. The 1. G. Ms clearly indicate the Nepal Cargo as being from different foreign ports to Calcutta; in fact this is the heading of the I. G. M. The bills of lading indicate Calcutta as the port of discharge. This being the case, it was clear that so-called Nepal cargo was meant for discharge at Calcutta. The crucial documents, the Import General Manifest and Bill of Lading indicate that the port of discharge, was Calcutta and the learned Appellate Collector of Customs had come to the conclusion that the goods cover under the first category i.e. those loaded in a conveyance for importation into India. The learned Appellate Collector of Customs had also referred to the definition of the importer as mentioned in Section 2 of the Customs Act, 1962 and had held that Section 116 of the Customs Act, 1962 was applicable. The appellant had also made a second agrument before the learned Appellate Collector of Customs that in terms of Indo-Nepal Treaty of Transit, traffic in transit to Nepal is exempted from Customs duty and from all transit duties and other duties and as such, if there was short-landing of cargo at Calcutta port penalty could not be imposed. The learned Appellate Collector of Customs had held that if there was short-landing, Section 116 of the Customs Act was attracted irrespective of the Treaty and had rejected the appeal of the appellant. Being aggrieved from the aforesaid order and two other orders passed by the learned Appellate Collector of Customs, the appellant has come in appeal before this Court.
3. Shri Ajit Roy Mukherjee, the learned Barrister has appeared on behalf of the appellant. He has reiterated the facts in respect of Appeal No. C.D(T) CAL-50/81 and has pleaded that the facts of other appeals are also similar. He has referred to list of items reported as short-landed which appears at page 12 of the original paper book and has referred to Item No. 4. The learned Barrister has also referred to the memorandum of appeal addressed to the Appellate Collector of Customs which appears at page 7 of the paper book. The learned Barrister has pleaded that the adjudication was done by the learned Deputy Collector of Customs without giving an opportunity to the appellant. He has also referred to the order passed by the learned Appellate Collector of Customs which appears at page 4 of the paper book. He has pleaded that Section 116 of the Customs Act, 1962 is not applicable to the appellant. The learned Barrister has pleaded that Import General Manifest was duly filed in terms of Section 30 of the Customs Act, 1962 which appears at page 16 of the paper book in original and it was specifically mentioned on the top of the I.G.M. that it is a Nepal Cargo. The learned Barrister has again pleaded that the order passed by the learned Appellate Collector of Customs, is not correct in law and has referred to the three points agitated by the appellant that Section 116 of the Customs Act, 1962, the empowering section for imposition of penalty for not accounting for goods, is not applicable to short-landing of Nepal cargo. The learned Barrister has pleaded that Section 116 applies to three categories of goods-(a) those loaded in a conveyance for importation into India, (b) those transhipped into India under the Customs Act, 1962, (c) coastal goods. The learned Barrister has stated that the goods involved in the present case, were in transit to Nepal and therefore, do not fall in any of the three categories and as such, no penalty is leviable. He has submitted that a cargo brought into Indian port in transit to Nepal, cannot be held to be import into India. He has submitted that the cargo which is in transit to Nepal, no duty is leviable. He has submitted that imposition of penalty is subsequent to the imposition of duty. Where no duty is leviable, no penalty can be levied. The learned Barrister further goes on to argue that since no duty is leviable, it does not come within the ambit of Section 116 of the Customs Act, 1962 and no penalty is leviable. The learned Barrister has further stated that the order of the learned Appellate Collector of Customs is dated 16th September, 1980 whereas the Hon'ble Calcutta High Court in the case of Birendra Bahadur Pandey v. Gramophone Co. of India Ltd. and Ors. had passed the judgment much later. He has pleaded that it was a Single Bench decision and the Hon'ble High Court had held it tantamounted to import. He has further submitted that the Single Bench decision of the Hon'ble Calcutta High Court was over-ruled by the judgment of the Division Bench vide order dated 10th February, 1982 reported in A.I.R. 1984 Cal. 69. The learned Barrister has stated that a copy of the Division Bench judgment of the Hon'ble Calcutta High Court has been duly annexed in the supplementary paper book. The copy appears at page 62 of the paper book. He has referred to the observation of the Hon'ble High Court on the word 'Import' which appears at page 69 of the paper book wherein Hon'ble High Court has discussed in detail on the word 'Import'. The learned Barrister has pleaded that the Division Bench judgment of the Hon'ble High Court was reversed by the Hon'ble Supreme Court, The copy of the said judgment has been annexed in the supplementary paper book vide Civil Appeal Nos. 3216-3218 of 1983 reported in AIR 1984 S.C. 667. The learned Barrister has pleaded that the Hon'ble Supreme Court had deliberately refused to be dragged into any controversy on the point whether the Nepal cargo tantamounts to import under the Customs Act, 1962. The learned Barrister has referred to Notification No. 68-Cus. (G.S.R. No. 193-E), dated 25th March, 1978. The said Notification reads as follows :
"In exercise of the powers conferred by Sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Department of Revenue and Banking No. 191-Cus., dated 2nd August, 1976, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts-
(a) ail goods when imported into India from a foreign country for the purpose of export to Nepal from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), and the whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act ;
(b) all goods when imported into India from Nepal for the purpose of export to a foreign country, from the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), and the whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act ;
(c) all goods imported into India from Nepal for the purpose of export to a foreign country and all goods imported into India from a foreign country for the purpose of export to Nepal, when exported to the foreign country or, as the case may be, to Nepal, from the whole of the duty of customs leviable thereon under the Second Schedule to the Customs Tariff Act, 1975 (51 of 1975)."
The learned Barrister has further submitted that this Notification indicates that in pursuant to the treaty whenever any goods imported into India, had the Notification not been there, the said goods had been liable to be treated as imported goods and would have been exposed to obligations to payment of customs duty. Similarly, when the said goods were in the process of transhipment outside India or transferred outside India in such a case no export duty would be leviable under the Customs Act. The learned Barrister has also argued that there is no definition of the word 'import' under the Copyright Act (14 of 1957). Section 53 of the said Copyright Act uses the word 'import'. The learned Barrister has laid special emphasis on the last four lines of the Division Bench judgment of the Hon'ble Calcutta High Court which appears at page 77 of the paper book :
"We have set out the relevant provisions of the Customs Act as well as the Copyright Act upon which reliance was placed. We have set out the context in which the expression 'import' has been used."
The learned Barrister has referred to the concluding portion of the Hon'ble Calcutta High Court judgment which appear at pages 85, 86, 87 and 88. The learned Barrister has pleaded that unless the goods were brought into the country for the purpose of use, enjoyment, consumption, sale or distribution so that they were incorporated and got mixed up with the mass of the property of the country, these could not be said to have been imported. Importation could not be said only to have taken place when they had crossed the Customs barrier. Now coming to the Hon'ble Supreme Court judgment in the case of Gramophone Co. of India Ltd. v. Birendra Bahadur Pandey and Ors. reported in AIR 1984 S.C. 667. The learned Berrister has referred to Para Nos. 21 and 26 of the said judgment. Para Nos. 21 and 26 from the said judgment are reproduced as under :
"21. Section 53 which is of direct relevance as it deals with 'importation of infringing copies' needs to be fully extracted'. It says :
'53. (1) The Registrar of Copyrights, on application the owner of the copyright in any work or by his duly authorised agent and on payment of the prescribed fee, after making such inquiry as he deems fit, order that copies made out of India of the work which if made in India would infringe copyright shall not be imported.
(2) Subject to any rules made under this Act, the Registrar of Copyrights or any person authorised by him in this behalf may enter any ship, deck or premises where any such copies as are referred to in Sub-section (1) may be found and may examine such copies.
(3) All copies to which any order made under Sub-section (1) applies shall be deemed to be goods of which the import has been prohibited or restricted under Section 11 of the Customs Act, 1962, and all the provisions of that Act shall have effect accordingly :
Provided that all such copies confiscated under the provisions of the said Act shall not vest in the Government but shall be delivered to the owner of the Copyright in work.
This provision empowers the Registrar of Copyrights to make an order that copies made out of India of any work which if same in India would infringe Copyright, shall not be imported. This the Registrar may do on the application of the owner of the Copyright in that work or by his duly authorised agent on payment of the prescribed fee and after making such enquiry, as he deems fit. The effect of such an order by the Registrar is to deem all copies to which the order applies to be goods of which the import has been prohibited or restricted under Section 11 of the Customs Act, 1962, and to attract all the provisions of the Customs Act on that basis, including the liability to be confiscated, with the slight modification that copies confiscated under the provisions of that Act shall not vest in the Government, but shall be delivered to the owner of the Copyright."
"26. The learned Counsel for the appellant invited our attention to Radhakishan v. Union of India (1965) 213, Shawhney v. Sylvania and Laxman, 77 Bom. LR 380, Bernado v. Collector of Customs, AIR 1960 Kerala 170, to urge that importation was complete so soon as the Customs barrier was crossed. They are cases under the Customs Act and it is needless for us to seek aid from there when there is enough direct light under the Copyright Act and the various conventions and treaties which have with the subject 'Copyright' from different angles. We do not also desire to crew our judgment with reference to the history of the Copyright and the Customs legislation in the United Kingdom and India as we do not think it necessary to do so in this case."
The learned Barrister has again reiterated that the Hon'ble Supreme Court does not go into the Customs Act and as such, great doubts have been created and the Hon'ble Supreme Court does not throw any light on the subject. The learned Barrister has pleaded that he has placed reliance on all the decisions considered by the Hon'ble Calcutta High Court in its Division Bench judgment reported in AIR 1984 Cal. 69. The learned Barrister has stated that the Hon'ble Supreme Court had discussed the observation of the Hon'ble Calcutta High Court in Para No. 25 of its judgment. The said para is reproduced as under :
"25. The Calcutta High Court thought that goods may be said to be imported into the country only if there is an incorporation or mixing up of the goods imported with the mass of the property in the local area. In other words the High Court relied on the 'original package doctrine' as enunciated by the American Court. Reliance was placed by the High Court upon the decision of this Court in the Central India Spinning and Weaving and Manufacturing Co. Ltd., The Empress Mills, Nagpur v. The Municipal Committee, Wardha (1958) SCR 1102. That was a case which arose under the C.P. and Berar Municipalities Act and the question was whether the power to impose "a terminal tax on goods or animals imported into or exported from the limits of a municipality" included the right to levy tax on goods which were neither loaded or unloaded at Wardha but were merely carried across through the Municipal area. This Court said that it did not. The word 'import', it was thought meant not merely the bringing into but comprised something more, that is 'incorporating and mixing up of the goods with the mass of the property in the local area', thus accepting the enunciation of the 'Original Package doctrine' by Chief Justice Marshall in Brown v. State of Maryland 6 L. Ed. 78. Another reason given by the learned Judges to arrive at the conclusion that they did, was that the very levy was a 'terminal tax' and, therefore, the words 'import and export' in the given context, had something to do with the idea of a terminus and not an intermediate stage of a journey. We are afraid the case is really not of any guidance to us since in the context of a 'terminal tax' the words 'imported and exported' could be construed in no other manner than was done by the Court. We must however say that the 'original package doctrine' as enunciated by Chief Justice Marshall on which reliance was placed was expressly disapproved first by the Federal Court in the Province of Madras v. Boddu Paidanna, 1942 FCR 90 and again by the Supreme Court in the State of Bombay v. F. N. Balsara, 1951 SCR 682. Apparently, these decisions were not brought to the notice of the Court which decided the case of Central India Spinning and Weaving and Manufacturing Co. Ltd., The Empress Mills, Nagpur v. Municipal Committee, Wardha. So we derive no help from this case. As we said we prefer to interpret the word 'import' as it is found in the Copyright Act rather than search for its meaning by referring to other statutes where it has been used."
The learned Barrister has pleaded that the cargo in transit to Nepal should not be treated as 'import'. The learned Barrister has submitted that in case his arguments on the point that the cargo in transit to Nepal does fall in the definition of 'import' even then Section 116 of the Customs Act, 1962 is not attracted. He has again referred to the Customs Notification No. 68-Cus. (G. S. R. 193-E), dated 25th March, 1978 and Indo-Nepal Treaty. He has referred to articles III to VIII of the Indo-Nepal Treaty which appear at page 6 of the paper book and has made special reference to Articles II to VI which are reproduced as under :
"ARTICLE III Both the Contracting Parties shall accord unconditionally to each other treatment no less favourable than that accorded to any third country with respect to (a) customs duties and charges of any kind imposed on or in connection with importation and exportation, and (b) import regulations including quantitative restrictions.
ARTICLE IV The Contracting Parties agree, on a reciprocal basis, to exempt from basic customs duty as well as from quantitative restrictions the import of such primary products as may be mutually agreed upon, from each other.
ARTICLE V Notwithstanding the provisions of Article III and subject to such exceptions as may be made after consultation with His Majesty's Government of Nepal, the Government of India agree to promote the industrial development of Nepal through the grant on the basis of non-reciprocity of specially favourable treatment to imports into India of industrial products manufactured in Nepal in respect of customs duty and quantitative restrictions normally applicable to them.
ARTICLE VI With a view to facilitate greater interchange of goods between the two countries, His Majesty's Government shall endeavour to exempt, wholly or partially, imports from India from customs duty and quantitative restrictions to the maximum extent compatible with their development needs and protection of their industries."
These Articles are from the Treaty of Trade between His Majesty's Government of Nepal and Government of India. He has also referred to Treaty of Transit between His Majesty's Government of Nepal and Government of India with a special reference to Article IV which appear at page 21 of the paper book. Article IV is reproduced as under:
"ARTICLE IV Traffic in transit shall be exempt from customs duties and from all transit duties or other charges except reasonable charges for transportation and such other charges as are commensurate with the costs of services rendered in respect of such transit."
He has further referred to Section 12 of the Customs Act, 1962 which is a charging section. He has further submitted that the notification was issued by the Government under Section 25 of the Customs Act. He has pleaded that by virtue of the benefit of the said Notification, no duty is leviable and in cases, no duty is attracted, penalty cannot be levied. He has referred to the provisions of Section 116 of the Customs Act, 1962 which are reproduced as under :
"116. Penalty for not accounting for goods-If any goods loaded in a conveyance for importation into India, or any goods transhipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination, and if the failure to unload or the deficiency is not accounted for to the satisfaction of the Assistant Collector of Customs, the person in charge of the conveyance shall be liable-
(a) in the case of goods loaded in a conveyance for importation into India or goods transhipped under the provisions of this Act, to a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported ;
(b) in the case of coastal goods, to a penalty not exceeding twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported."
The learned Barrister has referred to a judgment of Hon'ble Bombay High Court in the case of Bruusgaard Kiosteruds Dampskibs Aktieselskab v. Secretary of State reported in AIR 1940 Bombay. In the said judgment, the Hon'ble High Court had observed that the object of the penalty seems to be primarily to compensate the Government for the loss of so much revenue to them. The amount of the penalty is paid to the Customs and goes to the revenue. The object of the penalty is not merely to compensate the Government, but also to deter other persons from committing the same offence and thereby preventing or hindering the collection of revenue. The learned Barrister has pleaded that the penal laws should be construed narrowly in favour of the person proceeded against and has referred to second paragraph at page 239 of the book 'Maxwell on the Interpretation of Statutes'. The said para is reproduced as under :
"The principle applied in construing a penal Act is that if, in construing the relevant provisions, 'there appears any reasonable doubt or ambiguity,' it will be resolved in fovour of the person who would be liable to the penalty. "If there is a reasonable interpretation which will avoid the penalty in any particular case," said Lord Esher M.R., "we must adopt that construction. If there are two reasonable constructions we must give the more lenient one. That is the settled rule for the construction of penal sections". Or, as Plowman J. has said more recently : "In every case the question is simply what is the meaning of the words which the statute has used to describe the prohibited act or transaction ? If these words have a natural meaning, that is their meaning, and such meaning is not to be extended by any reasoning based on the substance of the transaction. If the language of the statute is equivocal and there are two reasonable meanings of that language, the interpretation which will avoid the penalty is to be adopted". The Court must always see that the person to be penalised comes fairly and squarely within the plain words of the enactment. It is not enough that what he has done comes substantially within the mischief aimed at by the statute : "the sooner this misunderstanding is dispelled and the supposed doctrine given its quietus the better it will be for all concerned, for the doctrine seems to involve substituting 'the incertain and crooked cord of discretion' for 'the golden and straight metwand of the las'."
The learned Barrister has further submitted that Maxwell's aforesaid passage has been approved by the Hon'ble Supreme Court in the case of Ratanlal v. State of Punjab reported in AIR 1965 S.C. 444 in Para No. 6 and in another judgment of the Supreme Court in the case of Tularam Renumall and Anr. v. State of Bombay reported in AIR 1954 S.C. 496. The learned Barrister has pleaded that Section 116 is not applicable in the instant case and only Section 117 is applicable which is a saving section for the imposition of penalties and the maximum penalty under Section 117 of the Customs Act, 1962 can be imposed at Rs. l.000/-. The learned Barrister has submitted that Section 116 cannot be converted for raising revenue of the Government. He has again referred to learned Appellate Collector of Customs order and has pleaded that the order is not correct in law. He has referred to notification which appears at page 61 of the paper book and pleads that simple reading of the Notification No. 68-Cus. (G.S.R. 193-E), dated 25th March, 1978 shows that there is no condition in the Notification that the cargo must reach Nepal. He has pleaded that the reasons given by the learned Appellate Collector of Customs in arriving at his findings are not correct.
Lastly, he has referred to the Outturn Report of the Port Trust which appears at page 14 of the paper book. He has pleaded for the acceptance of the appeals.
4. In reply Shri A. K. Chatterjee, the learned Junior Departmental Representative has pleaded that in these appears, facts are not disputed and the short-landing is also not in doubt. He has submitted that only question in this case is whether cargo imported from a foreign country and subsequently exported to Nepal, will attract Section 116 of the Customs Act, 1962 or not, and subsequent question can arise that such a cargo shall be deemed to be a cargo imported into India. He has referred to Section 116 of the Customs Act, 1962 and has pleaded that a simple reading of the section shows that if any goods loaded in a conveyance for importation into India, Or any goods transhipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their place of destination in India or if the quantity unloaded is short of the quantity to be unloaded at that destination and if the failure to unload or the deficiency is not accounted for to the satisfaction of the Assistant Collector of Customs, the person in charge of the conveyance shall be liable-
(a) in the case of goods loaded in a conveyance for importation into India or goods transhipped under the provisions of this Act, to a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported.
(b) in the case of coastal goods, to a penalty not exceeding twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported.
The learned Junior Departmental Representative has referred to Section 2(23) of the Customs Act, 1962 which defines the word "import". The same is reproduced as under :
"Section 2(23) 'import', with its grammatical variations and cognate expression, means bringing into India from a place outside India ;"
He has also referred to Sub-section (27) of Section 2 which defines "India". "India" includes the territorial waters of India. He has pleaded that Section 116 of the Customs Act, 1962 undoubtedly relates to a penalty provision. This section safeguards the country's economy and the argument of the learned Barrister that it is a revenue earning section, is not correct. The learned J.D.R. has further stated that the Division Bench judgment of the Hon'ble Calcutta High Court has been overruled and does not hold good at all. He has referred to Para 27 of the Hon'ble Supreme Court judgment in the case of Gramophone Co. of India Ltd. v. Birendra Bahadur Pandey and Ors. reported in AIR 1984 S.C. 667. The same is reproduced as under :
"27. We have, therefore, no hesitation in coming to the conclusion that the word 'import' in Sections 51 and 53 of the Copyright Act means 'bringing into India from outside India', that it is not limited to importation for commerce only, but includes importation for transit across the country. Our interpretation, far from being inconsistent with any principle of International law, is entirely in accord with International conventions and the Treaties between India and Nepal. And, that we think is as it should be."
He has submitted that after the judgment of the Hon'ble Supreme Court, the judgment of the Hon'ble Calcutta High Court is not good. He has again referred to Para No. 28 of the said judgment of the Hon'ble Supreme Court. He said para 28 is reproduced as under :
"28. We have said that an order under Section 53 may be made by the Registrar of Copyrights on the application of the owner of the Copyright, but after making such enquiry as the Registrar deems fit. On the order being made the offending copies are deemed to be goods whose import has been prohibited or restricted under Section 11 of the Customs Act. Thereupon the relevant provisions of the Customs Act are to apply, with the difference that confiscated copies shall not vest in the Government, but shall be delivered to the owner of the Copyright. . . ."
The learned J.D.R. has submitted that the Central Government has got power to prohibit import and export of the goods as per Section 11 of the Customs Act, 1962 and the Central Government may, by notification in the Official Gazette, prohibit the import or export of the goods. He has referred to Clause (n) of Sub-section (2) of Section 11. Clause (n) relates to the protection of patents, trade marks and copyrights. The learned J.D.R. has pleaded that it is accepted that the Nepal cargo tentamounts to import and the charging Section 12 of the Customs Act, 1962 steps in and Section 116 of the Customs Act, 1962 shall not apply where the goods are not dutiable. He has referred to the Customs Tariff Chapter 84. He has also pleaded that it is admitted by the party that the goods are charge able to customs duty as the goods are transported under bond procedure and if the short-landing was to be permitted, there was no necessity for following the bond procedure. The learned J.D.R has further pleaded that the Notification referred by the appellant on page 61 of the paper book, grants conditional exemption. If the condition is not satisfied, then the benefit of the notification automatically goes. The learned J.D.R. has referred to the provisions for transportation of the goods and has referred to page 203 of the Cen-Cus Customs Manual 1984 Edition. He has referred to a Notification issued under Section 56 of the Customs Act, 1962 No. C.B.E. and C. Notification No. 112-Cus., dated 21st August, 1965 as amended by Notification No. 69-Cus., dated 14th May, 1966 viz. Transportation of Goods (through foreign territory) Regulations, 1965. A simple reading of the said Notification shows that the goods permitted to be loaded on a conveyance on the execution of a bond by the consignor or the person in charge of the vessel. The learned J.D.R. has also referred to Sections 30, 31 and 32 of the Customs Act, 1962. Section 30 deals with the delivery of import manifest or import report. Section 31 deals with the imported goods not to be unloaded from vessel until entry inwards granted and Section 32 deals with the imported goods not to be unloaded unless mentioned in import manifest or import report, the learned J.D.R. has also Submitted that the paragraph from Maxwell on the Interpretation of Statutes, referred by the learned Barrister, does not help the appellant as there is a specific provision under Section 116 of the Customs Act, 1962. He has pleaded for the dismissal of the appeal.
5. In reply, Shri Ajit Roy Mukherjee, the learned Barrister has stated that the respondent has not been able to counter his arguments. He has again reiterated that Section 116 of the Customs Act, 1962, does not show that it was intended to apply to duty free cargo. He has also submitted that the learned J.D.R.'s argument that the exemption from duty under Notification No. 68-Cus. (G.S.R. No. 193-E), dated 25th March, 1978 appearing at page 61 of the paper book is conditional, carries no merit. The learned Barrister has stated that the exportation is not made as per paragraphs (a), (b) and (c) of the Notification No. 68-Cus. (G.S.R. No. 193-E), dated 25th March, 1978 and the said notification is unconditional. He has pleaded for the acceptance of the appeal.
6. After hearing the arguments of both the sides and going through the facts and circumstances of the case, I would like to observe that the word 'import' means 'bringing into India from outside India', it is not limited to importation for commerce only, but includes importation for transit across the country. This interpretation far from being inconsistent with any principle of International law, is entirely in accord with International Conventions and the Treaties between India and Nepal. During the course of arguments, the learned Barrister has repeatedly referred to the Hon'ble Calcutta High Court judgment reported in AIR 1984, Calcutta 69 which was reversed by the Hon'ble Supreme Court judgment reported in AIR 1984 S.C. 667. I am very respectfully following the judgment of the Hon'ble Supreme Court. Para Nos. 24, 27 and 28 from the said judgment are reproduced as under :
"24. It was submitted by the learned Counsel for the respondents that where goods are brought into the country not for commerce, but for onward transmission to another country, there can, in law, be no importation. It was said that the object of the Copyright Act was to prevent unauthorised reproduction of the work or the unauthorised exploitation of the reproduction of a work in India and this object would not be frustrated if infringing copies of a work were allowed transit across the country. If goods are brought in, only to go out, there is no import, it was said. It is difficult to agree with this submission though it did find favour with the Division Bench of the Calcutta High Court, in the judgment under appeal. In the first place, the language of Section 53 does not justify reading" the words "imported for commerce" for the word 'imported'. Nor is there any reason to assume that such was the object of the legislature. We have already mentioned the importance attached by International opinion, as manifested by the various International Conventions and Treaties to the protection of Copyright and the gravity with which traffic in industrial, literary or artistic property is viewed, treating such traffic on par with traffic in narcotics, dangerous drugs and arms. In interpreting the word 'import' in the Copyright Act, we must take note that while the positive requirement of the Copyright Conventions is to protect copyright, negatively also the Transit Trade Convention and the bilateral Treaty make exceptions enabling the Transit State to take measure to protect copyright. If this much is borne in mind, it becomes clear that the word 'import' in Section 53 of the Copyright Act cannot bear the narrow interpretation sought to be placed upon it to limit it to import for commerce. It must be interpreted in a sense which will fit the Copyright Act into the setting of the International Conventions."
"27. We have, therefore, no hesitation in coming to the conclusion that the word 'import' in Sections 51 and 53 of the Copyright Act means 'Bringing into India from outside India', that it is not limited to importation for commerce only, but includes importation for transit across the country. Our interpretation, far from being inconsistent with any principle of International Law, is entirely in accord with International Conventions and the Treaties between India and Nepal. And, that we think is as it should be."
"28. We have said that an order under Section 53 may be made by the Registrar of Copyrights on the application of the owner of the Copyright, but after making such enquiry as the Registrar deems fit. On the order being made the offending copies are deemed to be goods whose import has been prohibited or restricted under Section 11 of the Customs Act. Thereupon the relevant provisions of the Customs Act are to apply, with the difference that confiscated copies shall not vest in the Government, but shall be delivered to the owner of the Copyright. One fundamental difference between the nature of a notification under Section 11 of the Customs Act and an order made under Section 53 of the Copyright Act is that the former is quasi-legislative in character while the latter is quasi-judicial in character. The quasi-judicial nature of the order made under Section 53 is further emphasised by the fact that an appeal is provided to the Copyright Board against the order of the Registrar under Section 72 of the Copyright Act. We mention the character of the order under Section 53 to indicate that the effect of an order under Section 53 of the Copyright Act is not as portentous as a notification under Section 11 of the Customs Act. The Registrar is not bound to make an order under Section 53 of the Copyright Act so soon as an application is presented to him by the owner of the Copyright. He has naturally to consider the context of the mischief sought to be prevented. He must consider whether the copies would infringe the Copyright if the copies were made in India. He must consider whether the applicant owns the Copyright or is the duly authorised agent of the Copyright (owner). He must hear those claiming to be affected if an order is made and consider any contention that may be put forward as an excuse for the import. He may consider any other relevant circumstance. Since all legitimate defences are open and the enquiry is quasi-judicial, no one can seriously complain."
The learned Barrister has also argued that if the benefit of the Notification No. 68-Cus. (G.S.R. No. 193-E), dated 25th March, 1978 (page 6f of the paper book) is given to the appellant, no duty is leviable and hence no penalty under Section 116 of the Customs Act can be levied, is not tenable. The goods are transhipped under bond procedure and this procedure has been duly accepted by the appellant. The learned Barrister's argument that the Section 116 of the Customs Act, 1962 is a revenue yielding section, also does not help him. Keeping in view the Hon'ble Supreme Court's judgment reported in AIR 1984 S.C. 667, the above three appeals are dismissed.