Customs, Excise and Gold Tribunal - Delhi
National Textile Corporation Ltd. vs Collector Of Customs on 23 June, 1986
Equivalent citations: 1986(9)ECC219, 1986(8)ECR572(TRI.-DELHI), 1986(26)ELT275(TRI-DEL)
ORDER
G. Sankaran, Vice-President
1. Since these two appeals involve a common issue, they were heard together and are being disposed of by this common order.
2. An exactly similar issue had cropped up in respect of some other consignments of viscose staple fibre imported by the same appellants by the same vessel "BANGLAR PROGOTI" discharged at Calcutta and transshipped to Madras Port by M.V. "KHULNA" (the same vessel as in the previous cases) in identical circumstances. Two such appeals - appeal No. 494/1981 (D) and appeal No. 832/81-(D) - had been disposed of by the Tribunal's orders Nos. 232/83 dated 18.4.83 and 686/84-(D) dt. 15.12.84 confirming the orders of the lower authorities. Quite recently another such appeal No. 966/81-(D) was disposed by a similar order No. 189/86(D) dated 31.3.86 again confirming the orders of the lower authorities. However, when the present two appeals were taken up, Shri Rangaswamy, counsel for the appellants, stated that he would like to submit some further arguments. Since the salient aspects of the dispute have already been discussed at length in the Tribunal's previous orders (referred to above), we propose to confine the discussions in this order to the new points urged or arguments submitted.
3. Sri Rangaswamy submits that looking to the sequence of events, the probability is that the vessel 'Bangla Progati' had come into the territorial waters of India off Madras Port. In support of this contention the following circumstances are cited :
(a) The ship's Agent had filed with the Madras Custom the import manifest of the ship before the arrival of the vessel;
(b) The appellants had filed Bills of entry for assessment of the goods, even prior to the arrival of the goods;
(c) The message from the ship's Master would mean only that the ship had entered the territorial waters of India but without calling at Madras Port (the words under reference are "not calling Madras"); and
(d) The fact of congestion at Madras Port during the period in question was borne out by the position brought out in the Sundaram Textile Mill's case reported in 1983 ELT 909 (Mad).
4. In our considered view, the above circumstances do not necessarily or inevitably add up to the probability that the ship did indeed enter the territorial waters of India off Madras port. This is because the Customs Act does provide the facility of filing import manifests prior to the arrival of vessels (Section 30). It also provides for presentation of bills of entry before the arrival of the vessel by which the goods are imported (Section 46). It is a matter of common knowledge that such facilities are widely availed of by importers in order to complete as much of the Customs formalities as possible before the actual arrival and landing of the goods in order to avoid, or at least minimise, demurrage on the goods. The previous orders of the Tribunal in similar appeals (referred to earlier) have discussed the matter at length with reference to the correspondence and the exchange of messages on record and the Tribunal has come to the conclusion that the reasonable view would be that the ship did not enter the territorial waters of India off Madras port before 1.1.1979. We do not see any justification to depart from this view. The reference to the Madras High Court judgment in Sundasram Textile's case (supra) is of no help to the appellants since it is not the fact of congestio" at the Madras port during the material period that is in question, but whether the vessel 'Banglar Progoti' entered the territorial waters of India off Madras port.
5. Next, Shri Rangaswamy submitted that the Madras High Court in M. Jamal & Co. v. Union of India and Ors. - (1985) 6 ECC 292 has not taken into account the full Bench judgment of the Bombay High Court in the Apar Private Limited's case - 1985 (6) ECC 241.
It is to be stated in this connection that the latter is the later in point of time. The further submission is that the Madras High Court fell into error in turning to the General Clauses Act, 1897, for ascertaining the meaning of the term "India" in Section 12(1) of the Customs Act which is not in accordance with the principle enunciated by the Supreme Court in the Gramaphone Co of India's case AIR 1984 SC 667, that is, if a term has been defined in the enactment, that definition should be taken into account unless expressly provided otherwise. It is further contended that the Government has not challenged the Bombay High Court decision in the Sylvania Laxman's case, 1977, BLR 388, the ratio of which, if applied to the present case, would support the appellant's contention.
6. We would only say, with respect, in reference to the submissions regarding the Madras High Court's judgment in Jamal & Go's case that this Tribunal is not the appropriate forum to address these arguments to In any event, what we have to see is whether the contention of Sri Rangaswamy that the goods entered the territorial waters of India off Madras port before 1.1.79 is acceptable. We have, in our previous order, shown that it is not.
7. In our considered opinion, the decisions taken in similar appeals involving identical issues do not need to be reconsidered by reference to a larger Bench, as prayed for by Sri Rangaswamy. The decisions in all these cases were based primarily on appreciation of the material on record leading to the conclusion that the vessel 'Banglar Progoti' had riot entered the territorial wates off Madras port prior to 1.1.79. In all the authorities cited before us the goods had entered the territorial waters of India stet during periods when certain exemption notifications were in force. We have taken the view in the matters which we have disposed of earlier (similar to the instant cases), that the goods did not enter the territorial waters of India off Madras port during the currency of the exemption notification. The distinguishing feature of course is that the goods were carried to Calcutta. There is evidence to show that the ship entered the territorial waters at Calcutta on 31.12.78, that is, during the currency of the exemption notification. The question to be considered is whether this feature makes for a significant difference. We think, it does not, as indeed we have stated in our recent order No. 189/86-D dated 31.3.86. We shall explain the reasons for this view.
8. A full bench of the Bombay High Court has held in Aspar Private Limited and Anr. v. Union of India and Ors. - 1985 (6) ECC 241 that if goods are wholly exempt under Section 25(1) of the Customs Act or by virtue of the entry Section 25(1) of the Customs Act or by virtue of the entry in the tariff schedule on the date they enter the territorial waters, any subsequent withdrawal of the exemption will not have the effect of making the goods liable to duty on the basis that the exemption is no longer in force on the date of presentation of the bill of entry for clearance of the goods. To the same effect is the much earlier judgment, also of the Bombay High Court, in M. S. Sawhney v. Sylvania & Laxman Ltd., 1977, BLR 388. Sri Rangaswamy says that the latter decision has not been challenged by the Government. The Senior Departmental Representative informs us that the Bombay High Court decision in the Apar Private Ltd.'s case has been challenged before the Supreme Court.
In both the cases the goods entered the territorial waters off the intended port of import and the goods were discharged there. In the instant cases, however, as we have seen, there is no evidence to show that the carrying ship had actually entered the territorial waters off Madras, the intended port of import. The vessel, no doubt, entered the territorial waters in its approach to Calcutta port on 31.12.78, but the goods were not intended for and cleared at Calcutta. On the contrary, they were transhipped by another vessel to Madras port where that vessel arrived after 1.1.79 by which time the exemption had already been withdrawn. The facts and circumstances in the present cases are not, therefore, similar to those in the two cases before the Bombay High Court.
9. The next contention of Sri Rangaswamy is that the Tribunal's order No. 189/86-D dated 31.3.86 does not deal with the judgment of the Bombay High Court, in the Apar Private Ltd.'s 1985 (22) ELT 644 (Bom.). We have already set out the ' ratio of the decision of that case. The problem before us is, however, somewhat more complicated. In the Apar's case the goods were intended to be imported at Bombay and were, in fact, imported, discharged and cleared at Bombay. In the present cases, the goods were, no doubt, meant to be imported at Madras. However, unlike in the Apar's case, the goods did not enter the territorial water off Madras during the currency of the exemption notification. It is true that the goods did enter the territorial waters at Calcutta during the currency of the exemption, but they were not meant to be imported into India at Calcutta port. In fact, the goods, though discharged at Calcutta. port, were not cleared at that port. On the other hand, they were transhipped by another vessel to Madras port where they arrived after ' 1.1.79 and were cleared for home consumption. As the Bench has pointed out in order No. 189/86-D in appeal No. 966/81-(D), to hold that that the import of the goods had taken place at Calcutta would amount to ignoring the provisions of chapter VIII of the Customs Act. This chapter deals with goods in transit. Section 53 lays down that any goods imported in a vessel or aircraft and mentioned in the import manifest as for transit in the same vessel or aircraft to any port or aircraft outside India or any customs port or customs airport may be allowed to be so transitted without payment of duty. Section 54 provides that where any goods imported into a customs port or customs airport are intended for transhipment, a bill of transhipment shall be presented to the proper officer in the prescribed form. Sub-section (3) provides that where any goods imported into a customs port or a customs airport are mentioned in the import manifest as for transhipment to any major port (Madras is a major port), the proper officer may allow the goods to be transhipped, without payment of duty, subject to such conditions as may be prescribed for the due arrival of such goods at the customs port or customs airport to which transhipment is allowed. Section 55 provides that where any goods are allowed to be transitted under Section 53 or transhipped under Sub-section (3) of Section 54 to any customs port or customs airport, they shall, on their arrival at such port or airport, be liable to duty and shall be entered in like manner as goods are entered on the first importation thereof and the provisions of this Act and any rules and regulations shall, so far as may be, apply in relation to such goods.
If the liability to duty or otherwise has to be solely governed by the date of entry of the goods into the territorial waters of India for the first time irrespective of whether the goods are intended for import into India at the first port of call and irrespective of whether the goods are landed and cleared at that port, sections 53 and 54 permitting transit or transhipment of such goods, without payment of duty and Section 55 providing for their entry at the port of discharge, their liability to duty etc at the port of discharge, all these provisions may become largely redundant. More importantly, suppose a ship carrying goods originally meant for import at an Indian port say, Madras, enters the territorial waters of India but, for reasons of congestion, operation etc, the vessel proceeds to a foreign port without discharging the cargo and returns to Madras port after a couple of months, and in the meanwhile, the exemption notification which was in force on the date of the first entry into the territorial waters is withdrawn and duty is imposed by the time the ship enters the territorial waters on the second occasion, can it be said that the goods having entered the territorial waters on the first occasion, continue to have the exempted status for all time to come irrespective of whether the goods were really and truly imported into India, not merely in the sense of mere entry into the territorial waters, on the first occasion, but in the sense they were dischaged for clearance through customs? We think, the answer is an emphatic no. If this be so, in a case such as the one before us, the entry of the goods into the territorial waters at the actual port of unloading for clearance through the customs is the relevant date and not the date of their entry into the territorial waters at the first port of call in India. Any other view will be fraught with many imponderables and complications.
10. Sri Rangaswamy says that if the concept of entry into the territorial waters is good enough for the purpose of Section 11, it should be good also for Section 12. In our opinion, this is a mis-reading of the provisions. The importer is called upon to pay duty only on his filing a bill of entry in terms of Section 46 for clearance of the goods. On the other hand, the prohibition or restriction in force in respect of any goods on import attaches itself to the goods the moment the goods enter the territorial waters and they are liable to be proceeded against for violation of any prohibitions or restrictions in force. A reference to Section 111(d) of the Customs Act would show that even an attempt to import or to bring prohibited goods into the Indian customs waters for the purpose of being imported renders the goods liable to confiscation and the person concerned liable to penalty under Section 112. On the other hand, in respect of duty, the importer is not called upon to pay duty the moment the goods enter the territorial waters. The analogy sought to be drawn between sections 11 and 12, in our opinion, is misconceived.
11. In so far as the plea of promissory estoppel is concerned, the Tribunal has dealt with this aspect in its earlier order No. 189/86-D dated 31.3.86. The analogy sought to be drawn by Sri Rangaswamy to the relaxations which are usually granted by the Chief Controller. of Imports and Exports from prohibitions which are clamped down from a given date in so far as goods imported after the imposition of the prohibition but for which irrecoverable letters of credit had been opened prior to the imposition of the bank, is of no avail. Such relaxations appear to be in the nature of executive or administrative relaxations of prohibitions clamped down (without for obvious reasons, advance notice) in the interest of observance of trade contracts and commitments entered into between Indian importers and overseas suppliers. There can be no such argument or scope for relaxation in so far as duty is concerned. In any event, liability to duty or otherwise is governed by the provisions of the Customs Act.
12. In the light of the forgoing discussion, we do not see any reason to differ from the view which we have taken on similar earlier occasions. We, therefore, dismiss the appeals.