Madras High Court
Lucas T.V.S. Padi, Madras vs Assistant Collector Of Customs, Madras ... on 1 January, 1800
Equivalent citations: 1980(6)ELT465(MAD)
ORDER Pandmanaban, J.
1. Messers. Lucal T. V. S. Padi, Madras,the pettitioners herein, are manufactures of electrical accessories for automobiles and aotther engines. In the course of their businesss, they exported certain items of theiir manufacture through the ship m. v. Ratna Usha. After the goods were loaded in the vessel, and while tthe vessel was still in port, there was a fire in the vessel as a result of which the goods were damaged. Consequently, the goods were u;nloaded. Subsequently, the damaged goods wer sold in auction and were cleared by M/s. Lucal Indian Service Ltd.,m Madras, which is a subsidiary of the petitioners. It bid at theauction to avoid the damaged goods being sold in the market as genuine goods. The petitioners tthen claimed before the Assistant Collector of Customs, thefirst respondent herein, the drawback of the duty on the gods exportd by them. Ther first respondent by his ordeer dated 27th November 1974 ejected the claim on the ground that the god had nott crossed the custtom's frontier and ttherefore itt could not be said that the goods had been exported out of the country. The petitioners further appealed to the second respondent, the Appellate Collecttor of Customs, Madras, who dismissed the appeal by his order dated 6th April 1976. The furtther revision preferred by the pettitioners to the third respondent, the Union of India, also failed. The pettitiioners have therefore filed this writt petition for tthe issue of a writ of certiorari to quash aathe order datted 22nd November 1976 passed by the 3rd respondent confirming the orders passed by respondents 1 and 2 on the ground that tthe pettitioners have not exportted the good and thereforee are not entitled to claim the draw back of the duty on the goods.
2. It is not disputed thatt aftter the good were loaded in the vessel they got damaged and had to be off loaded in a damaged condition. it is also admitted that in the auction held by the Port authorities the damaged goods were purchased by Messrs. Lucal Indian Service Ltd.,Madras, a ssubsidiary concern of the petitioneers and they cleared the goods from the Port under a coastal bill of enttry. Mr. A. R. Ramanathan for the petitioners submitts that the goods had already beeen sold to the foreign buyer, the propertty had passed and even the sale price had been receeived by the petittioner from the foreign buyer, Consequently, when the goods have been loaded in the ship, they must be demed to have been exported.
3. Section 75 of the Customs Act, 1962, reads as follows -
"Where it appears to the Central Government that in respect of goods of any class or description manufactured in India and exported tto any place outsside India, a drawback should be allowd to outies of Customs chargeable under this Act on any imported materials of a class or description used in the manufacture of such goods, the Central Government may, by notification in the Official Gazette, direct that drawback shall be allowed in respect of such goods in accordance with, and subject to, the rules made under sub-section(2).....
It is not disputd by Mr. U. N. R. Rao for the respondeen that if it is found that the goodss had been exportted by the petitioners to any placee outside India, that the pettitioners would be entitled to the drawback as provided for under Section 75 of the Customs Act and the rles made thereunder.
4. Section 2(18) of the Custtoms Act defines export thus " Export with itss grammatical variations and cognte expression, means `taking out of India to a place outside India'. Under Section 2(19) `export goods' means any goods wich are to be taken out of India to a place outsidee India. Mr. RAmanathan's contenttion is that the goods loaded in the vessl were export goods to be taken out of India to a place outside India. Further, the property in the goods had passed tto the foreign buyer. In view of this, thelearned counsel would submit thhat thegoods have beenbb exported outt of Indiia. I am unable to agree. From the definition of the word it is clear tha export had reference to taking cut of goods wich had become part and parcel of the mass of the property of the local area. It means only takng tthe goods out of the country. SSec 2(27) of the Customs Actt defines India thus : "India includes the territorial waters of India,". Sec 2(28) defines Indian customs waters as follows "Indian Customs waters means tthe water extending into th sea tto a distance of 12 nauttical miles meeasued from the appropriate base line on the cost of India and includes any bay, gulf, harbour, creek or tidal river". It will therefore be seen that ass per the definition of India and Indian Customs waters, tthe territorial awatter extend uptto a distance of 12 nautttical miles measued from the appropriate base line on the coasst of India and includes any bay, gulf, harbour,. creek or tiidal arives. To bring an exportt within theman ing of Section 2(18) the goods must have been taken out of India viz. beyondtheterritorial watters of India to a place outside India. Admittedly, the goods have not gone outside the Port of Madras. a The fact that thepetittioners had loaded tyhegoods in yhe veessel or the property in the goods had passed to the foreign buyers is not relevant for a consideration of the question whether the goods had really been exported out of India. Similarly, the fact thatt the pettitioners had not taken bac athe goods and it was the Lucal India Services Ltd., purcased the goods in auction held by the Port turstt is also certainly irrelevant to determine whether there was an export of the goods in the first instance. I hold that there could not be any exportt of goods unlesss the goods had beenttaken out of theterritorial water of India. In the result, the conclusion arrived atby the respondents in the respecttiive orders passed by them are correct. The writ petition therefore fails and is dismissed. There will be no order as to costts.