Andhra Pradesh High Court - Amravati
Great Eastern Shipping Company Limited vs Deputy Commissioner Of Customs Import on 27 November, 2019
Author: J. Uma Devi
Bench: J. Uma Devi
HONOURABLE SRI JUSTICE M. SEETHARAMA MURTI
AND
THE HONOURABLE MS JUSTICE J. UMA DEVI
WRIT PETITION No.46076 of 2018
ORDER:[Per Hon'ble Sri Justice M. Seetharama Murti] This writ petition, under Article 226 of the Constitution of India, is filed by the petitioner seeking verbatim the following relief/s:
"..a. To prohibit the Respondents from seeking to assess/re-assess to customs duties the vessel - MV Jag Aditi under section 17 of the Customs Act, 1962 in the year 2018 or thereafter, when the vessel was imported into India on 28.05.2012 at which point in time the applicable customs duties were 'NIL', on the ground that the same is wholly without jurisdiction, contrary to the provisions of the Customs Act, 1962, Customs Tariff Act, 1975, and, violative of Article (s) 14, 19(1)(g), 265 and 300A of the Constitution of India; and b. To prohibit the Respondents from seeking to assess the import of the vessel
- MV Jag Aditi which was imported on 28.05.2012, to Integrated tax ('IGST') in terms of section 3(7) of the Customs Tariff Act, 1975 (which levy was introduced only w.e.f 01.07.2017), on the ground that the same is wholly without jurisdiction, contrary to the provisions of the Customs Act, 1962, Customs Tariff Act, 1975, Integrated Goods and Services Tax Act, 2017, and, violative of Article(s) 14, 19(1)(g), 265, and 300A of the Constitution of India; and c. To call for the records of the letter bearing number F.No.S6/108/2018-IMP and dated 19.09.2018 from the Respondent No.1 and to quash the same; and d. pass such other order(s) as this Hon'ble Court deems fit and proper in the extraordinary circumstances of the case in the interests of justice. We have heard the submissions of Sri Rohan P. Shah, learned senior counsel representing Sri K. Vivek Reddy, learned counsel appearing for the petitioner; of Sri Y.N. Vivekananda, learned senior standing counsel for Central Excise, Customs & Service Tax Department appearing for respondents 1 to 3; and, of Sri B. Krishna Mohan, learned Assistant Solicitor General of India appearing for the 4th respondent. We have perused the material record.
The case of the petitioner and the submissions made on its behalf are as follows: - 'The petitioner company with its fleet of 49 (owned) vessels provides shipping services across the world, which entail transportation inter alia of 2 MSRM,J & JUD,J WP_46076_2018 crude oil, petroleum products, gas and dry bulk commodities. The petitioner is registered primarily as a 'supplier of services' under the Central Goods and Services Tax Act, 2017 (CGST Act) and under certain State Goods and Services Tax (SGST) Act and holds GST registration. On 29.04.2011, the petitioner acquired a motor ship viz., MV Jag Aditi. In terms of Section 406 of the Merchant Shipping Act, 1958, a general licence to undertake worldwide trade and coastal trade in Indian waters, was obtained in respect of the same. The said vessel came to India, on 28.05.2012, (Visakhapatnam port of Andhra Pradesh) for the first time. At that time, full exemption from customs duties was available in terms of (i) S.No.461 of exemption notification no.12/2012- Cus, dated 17.03.2012, which exempted the basic customs duty; (ii) S.No.306A of notification no.12/2012-CE, dated 17.03.2012, which provided for exemption from excise duty, and consequently no additional duty of customs was leviable under Section 3(1) of the Customs Tariff Act, 1975; and (iii) S.No.56 of notification no.23/2002-Cus., dated 01.03.2002, which exempted special additional duty of customs under Section 3(5) of the Customs Tariff Act, 1975. After the vessel is imported to India, on 28.05.2012, it has been operating as a conveyance on its own steam as defined under Section 2(9) of the Customs Act, 1962. At the time of import into India, the petitioner tried to file the bill of entry for the vessel through their agent, K. Ramabrahmam & sons Pvt.Ltd. The Steel Authority of India Limited (SAIL) submitted a letter to the 2nd respondent - Assistant Commissioner of Customs (Import), on 30.05.2012, seeking inclusion of the vessel as a separate line item in the Import General Manifest (IGM) so as to enable the said agent to file a bill of entry in respect of the vessel. The said agent also filed a letter, dated 31.05.2012, on 01.06.2012, stating that the line inclusion as requested in the letter of the SAIL was not being permitted and that due to failure in the ICEGATE system, they were not able to file a bill of 3 MSRM,J & JUD,J WP_46076_2018 entry in respect of the vessel till the sailing of the vessel from the port, on 31.05.2012. The petitioner when preparing for the vessel to come into Visakhapatnam port in June, 2018, during the course of its operation as a 'conveyance', realised that the IGM and bill of entry had not been filed during its import on 28.05.2012 and voluntarily brought the same to the notice of the 3rd respondent - Commissioner of Customs (Import) by letter, dated 01.06.2018. While clarifying that there is no duty implication as the applicable customs duty and additional customs duty are 'NIL' at the first time of the import of the vessel, regularisation of the importation of the vessel was sought. Thereafter, a show cause notice, dated 03.07.2018, was issued by the 2nd respondent calling upon the petitioner to show cause as to why non inclusion of the vessel in the IGM and non filing of the bill of entry should not be considered as violations of Sections 30 & 46 of the Customs Act, 1962, and why penalty for violations should not be levied on the importer. The show cause notice specifically noted that the import of the vessel into Indian waters is on 28.05.2012. Subsequently, the 2nd respondent passed an order in original, dated 06.07.2018, stating that though the import of the vessel was on the said date, there are violations of the above said provisions and consequently a penalty of Rs.25,000/- and a penalty of Rs.60,000/- are respectively leviable under Section 30 and under Section 117 for violation of Section 46 of the said Act. The petitioner complied with the said order and made the deposit of the penalties on 09.07.2018. Thereafter, petitioner filed a manual bill of entry, dated 10.07.2018, seeking procedural regularisation of the import of the vessel, as on 28.05.2012, at 'Nil' rate of Customs duty. The said manual bill of entry made it clear that it was filed for the purpose of regularisation of the import of the vessel on 28.05.2012. Since penalty was levied and was paid as stated supra, the petitioner addressed a letter, dated 14.08.2018, for cancellation of 4 MSRM,J & JUD,J WP_46076_2018 the manual bill of entry aforesaid as importation is regularised on payment of penalty. The petitioner also addressed a letter, dated 14.08.2018, simultaneously for a closure report. The petitioner also sent a letter, dated 27.08.2018, to the 3rd respondent for issuance of closure letter and cancellation of manual bill of entry. In response to the letters, dated 14.08.2018 and 27.08.2018, the 1st respondent - Deputy Commissioner of Customs (Import) issued the letter, dated 19.09.2018, stating that the payment of penalties does not absolve the importer from assessment of the imported goods under Section 17 of the Customs Act, 1962, and that the request of the importers for cancellation of manual bill of entry or for issuance of a closure report is not in consonance with the provisions of the Customs Act, 1962, and further informing that the importers are to fulfil their obligation under Section 17 of the said Act. The petitioner vide letter, dated 20.11.2018, addressed to the 1st respondent, inter alia, stated as follows: 'There is no requirement for the petitioner to fulfil any obligations under the said Section of law. The proposal of the customs authority was wholly without jurisdiction and contrary to the provisions of the said Act. Since penalties have been imposed and paid and as at the time of import of the vessel in May, 2012, the applicable customs duty was 'nil' and no customs duty was leviable on import of ships/vessels into India, the actions of the said authorities are wholly without jurisdiction and without authority of law. By filing the manual bill of entry, on 10.07.2018, the petitioner only had sought procedural regularisation as on 28.05.2012, at 'nil' rate of customs duty. If the customs authorities want to undertake the assessment/re assessment in 2018 as suggested in the letter, dated 19.09.2018, and not as on 28.05.2012, as requested in the manual bill of entry, the petitioner is then withdrawing the manual bill of entry so filed.' However, the 2nd respondent is seeking to continue with the assessment/re assessment proceedings of the vessel and has 5 MSRM,J & JUD,J WP_46076_2018 fixed the personal hearing on 21.12.2018, by intimating the same by letter, dated 10.12.2018. The respondents have neither withdrawn their actions to assess/re-assess the vessel nor issued a closure report post payment of penalties as per the order levying penalties. The vessel is imported to India in May, 2012. The respondents are seeking to assess/re-assess the vessel imported to India in May, 2012, only for the reason that integrated tax @ 5% is imposed on the levy of vessels falling under Chapter heading 8901 when imported into India for the first time on or after 01.07.2017 in terms of Section 3(7) of the Customs Tariff Act, 1975. The levy of integrated tax was only introduced w.e.f 01.07.2017. Hence, it is wholly inapplicable to the import of the vessel made in May, 2012 by the petitioner. The vessel has been operating as a conveyance as defined under Section 2(9) of the Customs Act, 1962. Being aggrieved of the actions of the customs authorities, the present writ petition is filed.' On 19.12.2018, the then High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh granted an interim order while posting the matter to 21.01.2019. The said order reads as under: - "In the meantime, further proceedings pursuant to the notice, dated 10.12.2018, issued by the Assistant Commissioner of Customs shall be put on hold." The said interim order is being extended from time to time and is in force.
The case of the respondents 1 & 2 and the submissions made on their behalf are as follows: - 'The petitioner's contention is that since the vessel was imported in May, 2012, and since the petitioner was penalised for non filing of bill of entry, the impugned goods cease to be imported goods in the year 2018 and, therefore, the provision of Section 15 of the Customs Act, 1962, has no application. The petitioner is obliged to file bill of entry on import of the vessel 6 MSRM,J & JUD,J WP_46076_2018 in the year 2012 and self assess the duties leviable on the same and seek an order for home clearance from the proper officer under the provision of Section 47 of the Customs Act, 1962. The petitioner failed to discharge the said obligation. There is transgression of law. The vessel is yet to be cleared for home consumption and remained an imported goods. It is the obligation of the petitioner to file a bill of entry and clear the goods for home consumption. When a bill of entry is filed, the rates of duty and tariff valuation prevalent as on the date of filing are to be levied in terms of Section 15 of the Customs Act, 1962. The bill of entry for home consumption was filed, on 10.07.2018, seeking clearance of the imported goods under Section 47 of the Act. Allegation that respondents sought to file bill of entry in 2018 to collect duties prevalent in 2018 is mischievous. It is in discharge of the obligation, the petitioner filed the bill of entry as is evident from the letter, dated 14.08.2018. The proper officer is yet to pass an order under the provision of Section 17(2) of the Customs Act, 1962, assessing the vessel. A personal hearing was afforded. A blatant transgression of the provisions of law was committed by the importers. The same is being dealt with in a fair and just manner. Ignoring the mechanism built in the law, the petitioner is seeking redressal by invoking extra ordinary jurisdiction of this Court on their imagined grievance when the due process of law was being undertaken and being attempted to be completed by the respondents. As per the provisions of the Act, on import of vessel into India, the importer is under an obligation to make a declaration under Section 30 of the Customs Act, 1962 and it is an intimation about the arrival of the vessel. A declaration under Section 46 of the said Act is also necessary. It is a declaration with the details of the value and classification of the goods in the form prescribed (the bill of entry) for self assessment. On filing of such declaration, the proper officer of the customs, after scrutiny and ascertainment 7 MSRM,J & JUD,J WP_46076_2018 of accuracy of such declarations, passes an order for home consumption under Section 47 of the said Act. It completes the import of such goods brought into India. Until all the obligations are discharged, the imported goods remain imported goods as per the definition in the Customs Act, 1962. Since the vessel remains an imported goods until an order for home consumption is passed, and as the obligation under the law is not discharged, and as the self assessed bill of entry is filed in the year 2018, the petitioner was accorded an opportunity as per principles of natural justice by issuing a notice. The petitioner is free to putforth all the contentions before the proper officer. If the ends of justice were not met, there is an inbuilt redressal mechanism in the Customs Act, 1962. The 1st respondent is justified in issuing the communication, dated 19.09.2018. The contention of the petitioner that they have no alternative remedy except approaching this Court under Article 226 of the Constitution for redressal of the grievance is incorrect and is a misrepresentation of facts. In the event the petitioner is aggrieved of an order that may be passed under Section 17 of the Customs Act, 1962, the statutory remedy is available to approach the Commissioner of Appeals. Even before passing an order for home consumption by a proper officer and without getting the efficacious alternative remedy exhausted, the petitioner preferred the writ petition merely on presumptive grounds. The said Act is having a self contained procedure and it gives full liberty to the petitioner to put forth their case before adjudication. The writ petition is not maintainable as there is no illegality, irrationality or procedural impropriety in the actions of the respondents. There are no exceptional circumstances warranting invocation of the provision for judicial review. Article 226 is not meant to short circuit or circumvent statutory procedures. Hence, the writ petition may be dismissed by vacating the interim order, dated 19.12.2018.' 8 MSRM,J & JUD,J WP_46076_2018 The case of the 4th respondent - Union of India is also more or less akin to the case pleaded by the respondents 1 & 2, which is narrated supra.
The petitioner filed a rejoinder affidavit reiterating the pleaded contentions and inter alia stating that there is no duty whatsoever (including integrated tax) leviable as the vessel was imported admittedly on 28.05.2012, and as penalties are deposited pursuant to the penalty order for violations of Sections 30 & 46 of the Customs Act, 1962, and that the bill of entry is only filed for regularisation and the same was withdrawn and the petitioner cannot be penalised for not filing the bill of entry in May, 2012, and that since the action is being questioned on want of authority and jurisdiction the writ petition is maintainable. It is inter alia contended that customs duty is charged as per the law in place when the goods are imported into India and not the law prevalent on the date of belated filing of the bill of entry due to non filing of the bill of entry on the date the vessel was imported into India.
We have given earnest consideration to the facts & submissions. The first question is as to whether the levy of the penalty under order, dated 06.07.2018, and the deposit of the same by the petitioner absolved the petitioner from discharging of all its liabilities in respect of the import of the vessel, on 28.05.2012, into Indian waters; and, if so, whether the petitioner is not required to file the manual bill of entry at any time later and is, therefore, entitled to withdraw the manual bill of entry having filed, on 10.07.2018.
Admittedly, the vessel was imported into the Indian waters, on 28.05.2012. At that time, no bill of entry was filed. However, the case of the petitioner is this: 'At the time of import into India, the petitioner tried to file the bill of entry for the vessel through their agent, K. Ramabrahmam & sons 9 MSRM,J & JUD,J WP_46076_2018 Pvt.Ltd. The Steel Authority of India Limited (SAIL) submitted a letter to the 2nd respondent - Assistant Commissioner of Customs (Import), on 30.05.2012, seeking inclusion of the vessel as a separate line item in IGM so as to enable the said agent to file a bill of entry in respect of the vessel. The said agent also filed a letter, dated 31.05.2012, on 01.06.2012, stating that the line inclusion as requested in the letter of the SAIL was not being permitted and that due to failure in the ICEGATE system, they were not able to file a bill of entry in respect of the vessel till the sailing of the vessel from the port, on 31.05.2012.' However, according to the findings of the Assistant Commissioner of Customs, the agent of the petitioner furnished 'commercial invoice date' as 'BL date', which was more than one year from the date of filing of the IGM and that is the reason for the ICEGATE not accepting the line inclusion. The above pleaded facts of the petitioner make it manifest that the petitioner is having knowledge of requirement of inclusion of vessel in the IGM and the filing of bill of entry for clearance of the vessel at the time of import. Thus, the petitioner is required to include the vessel in IGM on arrival for the first time under Section 30 of the Customs Act, 1962 and has to file a bill of entry for clearance of the vessel under Section 46 of the said Act and that for not doing so, a show cause notice was issued and later the order, dated 06.07.2018, came to be passed imposing penalties of Rs.25,000/- under Section 30 and Rs.60,000/- under Section 17 (in the absence of specific penal provision for contravention of Section 46) of the Customs Act, 1962. No doubt, the penalties were deposited. The order imposing penalties itself stated that the said order is issued without prejudice to any other action as may be initiated, pending against the importers under any other provision of the Customs Act, 1962 or any other law for the time being in force. In fact the petitioner filed a manual bill of entry, on 10.07.2018, having deposited the penalties in a total sum of Rs.85,000/-, on 10 MSRM,J & JUD,J WP_46076_2018 09.07.2018, by way of a demand draft. The petitioner contends on one hand that the said manual bill of entry is filed for procedural regularisation of import of the vessel. On the other, the petitioner also contends that there is no requirement of filing of manual bill of entry on the said date as the order imposing penalty was accepted and penalty was deposited and the said order has become final and the importation is regularised on payment of penalty. The petitioner also submits that a request was made for withdrawal of the manual bill of entry. The petitioner further contends as follows: - 'If the customs authorities want to undertake the assessment/re assessment in 2018 as suggested in the letter, dated 19.09.2018 and not as on 28.05.2012, as requested in the manual bill of entry, the petitioner is then withdrawing the manual bill of entry so filed.' The legal obligation to file a bill of entry even if the vessel on its import into Indian waters was exempt from duty is not in dispute. The penalties were imposed under Sections 30 & 46 of the Customs Act. Section 30 of the said Act casts an obligation to make a declaration, which is an intimation about the arrival of the vessel. The prescribed form in this regard is the Import General Manifest (IGM). Section 46 of the Customs Act reads as under:
46. Entry of goods on importation. - (1) The importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting electronically on the customs automated system to the proper officer a bill of entry for home consumption or warehousing in such form and manner as may be prescribed:
Provided that the Principal Commissioner of Customs or Commissioner of Customs may, in cases where it is not feasible to make entry by presenting electronically on the customs automated system, allow an entry to be presented in any other manner.
Provided further that if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all theparticulars of the goods required under the sub section, the proper officer may, pending the production of such information, permit him, previous to the entry thereof (a) to examine the goods in the presence of an officer of customs or (b) to deposit the goods in a public warehouse appointed under section 57 without warehousing the same. 11
MSRM,J & JUD,J WP_46076_2018 (2) Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor.
(3) The importer shall present the bill of entry under sub -section (1) before the end of the next day following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing:
Provided that a bill of entry may be presented at any time not exceeding thirty days prior to the expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for importation into India. Provided further that where the bill of entry is not presented within the time so specified and the proper officer is satisfied that there was no sufficient cause for such delay, the importer shall pay such charges for late presentation of the bill of entry as may be prescribed.
(4) The importer while presenting a bill of entry shall make and subscribe to a declaration as to the truth of the contents of such bill of entry and shall, in support of such declaration, produce to the proper officer the invoice, if any, and such other documents relating to the imported goods as may be prescribed. (4A) the importer who presents a bill of entry shall ensure the following, namely: -
(a) the accuracy and completeness of the information given therein;
(b) the authenticity and validity of any document supporting it; and
(c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or under any other law for the time being in force. (5) If the proper officer is satisfied that the interests of revenue are not prejudicially affected and that there was no fraudulent intention, he may permit substitution of a bill of entry for home consumption for a bill of entry for warehousing or vice versa.
Be it noted that the above provision of law is amended from time to time and the period 'at any time not exceeding thirty days prior to' in the proviso under sub Section (3) was inserted by the Finance Act w.e.f 29.03.2018. Be that as it may.
On a harmonious consideration of the facts in juxtaposition with the provisions of law, it reflects that the imposition of the penalty or a direction to the importer to pay charges is for contravention of the provisions of Sections 30 & 46 of the Act, which is prescribed, and not for absolving or discharging the importer from the liability to present a bill of entry in the prescribed form. Therefore, the contention of the petitioner that once penalty is imposed and 12 MSRM,J & JUD,J WP_46076_2018 deposited, the petitioner is not required to present manually the bill of entry and, therefore, the respondents ought to have considered the request of the petitioner for withdrawal of the manual bill of entry, which was presented for regularisation, needs no countenance.
The next question is as to whether the customs authorities are entitled to assess the impugned vessel to duty, on the premise that the bill of entry is filed in the year 2018, and also collect duties and tax prevalent in 2018 despite the fact that the vessel is admittedly imported into the Indian waters on 28.05.2012 more particularly when the customs duties applicable at that point of time viz., 28.05.2012 were 'nil' and when the integrated tax in terms of Section 3(7) of the Customs Tariff Act, was a levy introduced only w.e.f 01.07.2017.
Before proceeding further, it is necessary to refer to infra the relevant provisions of law.
Customs Act, 1962 "Section 12. Dutiable goods: - (1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or exported from India.
Section 15. Date for determination of rate of duty and tariff valuation of imported goods: - (1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force, -
(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 in presented under that section;
(b) in the case of goods cleared from a warehouse under section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section;13
MSRM,J & JUD,J WP_46076_2018
(c) in the case of any other goods, on the date of payment of duty:
Provided that if a bill of entry has been presented before the date of entry inwards of the vessel or the arrival of the aircraft or the vehicle by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be.
Section 2(15) "duty" means a duty of customs leviable under this Act. Section 3(7) of the Customs Tariff Act: "Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent as is leviable under section 5 of the Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (8) [or sub section (8A) as the case may be."
In this context, it is pertinent to now refer to the following decision:
Order, dated 22.01.2012, of the High Court of Judicature at Bombay (Appellate Site) in W.P.(L).no.2921 of 2011 [between: SEAMEC Limited & Anr and Union of India & Ors]. The facts in the above decision are as follows: - 'A vessel was originally imported by Essar Shipping in 1988. The vessel is stated to have been purchased by the petitioners in November 1993 as an Indian Flag Vessel. The vessel was sent out of the territorial waters for purpose of repairs. The vessel returned on or about 01.12.2011 and was seized. The investigation has been taken over by the Directorate of Revenue Intelligence. After provisional quantification of the duty liability and the deposit of the same, the petitioners were directed to approach the Commissioner of Customs (Import) for permission to file a bill of entry in the value of repairs and machinery/equipment installed between 06.07.2011 and 26.11.2011 (being the dates of the last departure and arrival of the vessel). The petitioners moved the Commissioner of Customs. The vessel was provisionally released subject to certain conditions. The contention of the petitioners was that no duty is liable to be paid on the component representing the value of the vessel estimated at 14 MSRM,J & JUD,J WP_46076_2018 Rs.53.55 Crores since admittedly in 1988 when the vessel was imported it was exempt from payment of customs duty. Their liability to pay duty on the modifications made on the vessel after 6th July, 2011, provisionally estimated to be in the amount of Rs.82.09 Crores is not disputed. The duty liability in respect of the modifications amounted to Rs.12.77 crores and the petitioners expressed willingness to pay the said duty computed on provisional basis but, they wanted to be permitted to avail the credit available to them under a scheme. The total value of the vessel was also taken at Rs.135.64 Crores for the purpose of computing provisional duty. That included two components - (i) value of the vessel which is taken at Rs.53.55 Crores and (ii) modification/upgradation carried out after 06.07.2011 which was computed at Rs.82.09 Crores. The petitioners were undoubtedly liable to pay duty in respect of the modification/upgradation that has taken place, which amount is computed on a provisional basis at Rs.82.09 Crores. On that the duty liability assessed provisionally worked at Rs.12.77 Crores. As regards the value of the vessel of Rs.53.55 Crores, it is not disputed by the Revenue that the vessel was imported in 1988 and was not subject to the levy of customs duty. However, the Revenue contended that in order to avail exemption of duty, it was necessary to file an IGM and to have a bill of entry duly assessed and it is still to be established as to whether the procedure was followed when the vessel was originally imported. Prima facie there was no dispute of the fact that at the relevant time when the vessel was imported, there was a notification exempting the vessel from customs duty holding the field.' In that view of the matter, the High Court of Judicature at Bombay held that for the purpose of securing the provisional release of the vessel under Section 110A, the revenue would not be justified in including the value of the vessel of Rs.53.55 Crores. 15
MSRM,J & JUD,J WP_46076_2018 Hence, the first condition was scaled down requiring to make a deposit of a duty in an amount of Rs.12.77 Crores.
In the decision of the CESTAT in Samson Maritime Ltd., v. Commissioner of Customs (Import), Mumbai [2016 (333) ELT 148 (Tri.Mumbai)], the facts and ratio are as follows: A Tug was imported and brought into India (at Chennai port) on a contract in November, 1997. No import duty was payable on ships imported during that period. The Tug was purchased by the appellant therein, on 18.03.1998. Thereafter, it was used for coastal runs in India. Port clearances were being granted for coastal runs for over a period of 14 years. At the time of initial import in 1997, customs duty on bunkers and consumables was paid by filing bill of entry giving details thereof as mentioned in the IGM for dutiable items. Customs authorities did not insist on filing of bill of entry at that time. Subsequently, by notification, dated 01.03.2001, complete exemption from payment of customs duty was withdrawn and duty of 5% was introduced. The Tug was seized on 20.12.2011, and provisional release was allowed on condition of filing of bill of entry and submission of bond etcetera.
A demand of duty of Rs.92,46,015/- was confirmed. Penalties were also imposed. The aggrieved appellant approached the CESTAT, West Zonal Bench, Mumbai. The appellate Tribunal referred to the above precedent cited and also noted that in the appellant's own case at the time of seizure, the High Court of Bombay observed that 'if the duty was not payable on the date of import and customs authorities have permitted use of vessels all these years as imported goods, in our opinion, the customs authorities are not justified in abruptly seizing the vessel in question. ..Even in the present case, in our opinion, the Revenue is not justified in demanding the duty for provisional release of the vessel, when prima facie, it is not in dispute that on the date of initial import of these ocean going vessels, there was total exemption of payment of duty.' 16 MSRM,J & JUD,J WP_46076_2018 Eventually, the CESTAT held that demanding duty at this stage for mere technical omission that occurred 14 years ago is not sustainable.
Though this decision is of the CESTAT, it is stated that it is being relied upon as the facts are akin to the facts of the instant case. Nevertheless, it is also contended that the order of the CESTAT is binding on the subordinate authorities in view of the settled legal position. (See Union of India v. Kamlakshi Finance Corp.Ltd., [1991 (55) ELT 433 (SC)]). Hence, it is canvassed that the respondents, who are bound by the decision of the CESTAT and the judicial discipline, are not entitled to assess the vessel imported in May, 2012, as per the law prevalent and applicable in the year 2018 contrary to the decision of the CESTAT.
Learned senior standing counsel first contended that the order of the Bombay High Court is against a provisional order imposing conditions and that there is no final adjudication. Insofar as the decision of the CESTAT in Samson Maritime Limited (supra) he contended that the judgment does not discuss the implication of Section 15 of the Customs Act, 1962 nor did it explicitly rule out the filing of bill of entry for regularisation of import as envisaged in Board's circular 16/2012, dated 13.06.2018, and that in terms of Section 15 of the Act, the rates of duty and tariff valuation on the date of filing of bill of entry, that is, 10.07.2018 are applicable.
We are not impressed with this submissions for the following reasons and the contents of the provisions of law referred to supra: 'Admittedly the vessel is imported into the Indian waters on 28.05.2012 and the vessel was allowed to run after giving necessary port clearances for such runs on numerous occasions from its entry in the year 2012 till the manual bill of entry is filed. On coming to know of violations, a show cause notice was issued; and, by an order, dated 17 MSRM,J & JUD,J WP_46076_2018 06.07.2018, penalty was imposed and thereafter penalty was deposited and a manual bill of entry was filed on 10.07.2018. Admittedly, as on the date of the import of the vessel into Indian waters on 28.05.2012 applicable customs duties were 'nil'; and, the integrated tax in terms of Section 3(7) of Customs Tariff Act, 1975, was not introduced.' Learned counsel for the petitioner quoted the following hypothetical propositions. 'Let it be assumed that in a given case, as on the date of entry of the vessel, the duties are leviable. However, no bill of entry is filed. Later, the duties leviable are exempted. At that time, the bill of entry is filed to take advantage of the exemption of the levy. If the law prevalent on the date of filing of the bill of entry is to be reckoned as the relevant factor, the importer though liable to pay duties as on the date of import would be escaping from the liability to pay the duties.' 'Similarly there may be change of rate of duty from time to time. If the date of filing of the bill of entry is to be reckoned as the relevant date for application of the law prevalent, it would lead to anomalous situations and uncertainty.' Thus, it is submitted that the date of entry of the vessel, which is a fixed date, shall be the criterion and not the date of filing of the bill of entry, which is variable.
In our considered view, whether the bill of entry has been presented before the date of entry or after the date of entry, the bill of entry shall be deemed to have been presented on the date of actual entry inwards and the said date of entry shall be reckoned as the relevant date for application of the law prevalent as on that date.
To sum up, we are of the view that the law prevalent as on the date of the import of the vessel in the case on hand would only be applicable and that merely because the bill of entry was not filed at the inception in the year 2012 18 MSRM,J & JUD,J WP_46076_2018 and the manual bill of entry was filed in the year 2018, that is, about six years after the actual import of goods, the duty and tax cannot be levied based on the law prevalent on the date of the filing of manual bill of entry more particularly as the import of the vessel in May, 2012, is not in dispute and as the vessel ran after getting necessary port clearances on number of occasions is also not in dispute. As admittedly the duties were 'nil' at the time of import in May, 2012, and the integrated tax in terms of Section 3(7) of Customs Tariff Act, 1975 was introduced w.e.f from 01.07.2017, we hold that the petitioner is entitled to the reliefs claimed in the writ petition.
Having regard to the facts and circumstances of the case and our findings supra, we are of the view that the writ petition is maintainable; further, as the question whether a writ petition would be maintainable depends upon facts & circumstances of the case, we also find that the contention of the respondents that the writ petition is not maintainable needs no countenance; and, therefore, there is no need to go into the precedents cited on the said aspect.
In the result, the Writ Petition is allowed as prayed for. There shall be no order as to costs.
Pending miscellaneous petitions, if any, shall stand closed.
_______________________ M. SEETHARAMA MURTI, J _____________ J.UMA DEVI, J 27.11.2019 Vjl 19 MSRM,J & JUD,J WP_46076_2018 THE HON'BLE SRI JUSTICE M.SEETHARAMA MJRTI AND THE HON'BLE Ms. JUSTICE J.UMA DEVI Writ Petition No.46076 of 2018 (Per Hon'ble Sri Justice M. Seetharama Murti) Vjl Dated :27-11-2019