Bombay High Court
Anjali Shantilal Lunkad vs Union Of India on 29 March, 1990
Equivalent citations: 1991(52)ELT203(BOM)
Author: Sujata V. Manohar
Bench: Sujata V. Manohar
JUDGMENT Sujata v. Manohar, J.
1. All these writ petitions pertain to import of Hungarian Green Peas and/or yellow peas. In all these petitions the cargo arrived in Bombay some time prior to 18th October 1989.
2. Writ Petition No. 3288 of 1989 : In the case of cargo in writ petition No. 3288/89, the importer, as shown in the documents pertaining to the relevant cargo as well as shown in the Import General Manifest, was M/s. Nav Maharashtra Chakan Oil Mills. The cargo of Hungarian Green Peas arrived by m. v. Eugeniusz Kwiatkowski. The Import General Manifest was filed on 18th October, 1989. On 24th October, 1989 Nav Maharashtra Chakan Oil Mills filed a Bill of Entry in respect of the said cargo for warehousing. On 26th October, 1989, this bill of entry, on the application of the said importer, was allowed to be converted to a bill of entry for home consumption. On the next day, that is to say, 27th October, 1989 it was presented by the importer for assessment.
3. On 1st November 1989 Notification No. 263/89-Customs came into force as a result of which an earlier notification of 1st March 1989 bearing No. 28/89-Customs was amended. As a result customs duties on Peas were reduced from 35% ad valorem to 10% ad valorem.
4. Thereafter M/s. Nav Maharashtra Chakan Oil Mills claimed that there were certain disputes relating to purchase of the said cargo between them and the foreign vendors. They contend that as a result, the contract between them and their foreign vendors was cancelled. The present petitioner in Writ Petition No. 3288/89 - Miss Anjali Shantilal Lunkad - claims that she purchased this very same cargo thereafter from the original foreign vendors on or about 6th November, 1989. On 10th November, 1989 the original importer M/s. Nav Maharashtra Chakan Oil Mills surrendered the bill of entry filed by them alleging that the transaction has been cancelled. On 11th November 1989 the steamer agent applied for amendment of Import General Manifest (I.G.M.) to show the name of the present petitioner as the importer in respect of the said cargo instead of Nav Maharashtra Chakan Oil Mills. On 15th November 1989 the present petitioner submitted a fresh bill of entry for the same cargo. She claimed in this bill of entry the benefit of reduced customs duty payable as a result of the said notification of 1st November 1989. The Respondent's Customs authorities have refused the application of the steamer agents for amendment of the I.G.M. They have also refused to accept the fresh bill of entry submitted by the petitioners. Hence Writ Petition No. 3288/89 was filed by the petitioners on 21st November 1989. Under an interim order dated 28th November 1989 of this court (Jahagirdar, J.) the petitioner was allowed to clear the said cargo on her paying the duty as per the said notification dated 1st November 1989 and on her furnishing a bank guarantee for the differential duty as between the old notification and the new notification. Accordingly the petitioner has cleared the said cargo.
5. The respondents in the affidavit in reply have pointed out that one Shantilal Ratanchand Lunkad, is a partner of M/s. Nav Maharashtra Chakan Oil Mills and the petitioner in Writ Petition No. 3288/89, Miss Anjali Shantilal Lunkad, is the daughter of Shantilal Ratanchand Lunkad. The constituted attorney of the petitioner viz. Prabhudas Gordhandas Jawani, who has declared this petition, is an employee of M/s. Nav Maharashtra Chakan Oil Mills. The power of attorney executed by the petitioner in favour of this constituted attorney was seized under a panchanama from the office of M/s. Nav Maharashtra Chakan Oil Mills. In these circumstances, the Respondents allege that a fraud has been perpetrated on the respondents in order to avail of the benefit of the said notification of 1st November 1989. Clearly the original importers have arranged with the foreign importers to have the cargo transferred to the name of the daughter of a partner of the original importer. This has been done so that she may file a fresh bill of entry and obtain the benefit of the new notification. This benefit would not have, otherwise, been available because the original bill of entry was filed on 24th October 1989 prior to the new notification coming into effect.
6. For reasons set out hereafter, the rate of duty payable in respect of this cargo is the rate in force on the date when the first bill of entry was filed. This was prior to the new notification. Hence the petitioner is bound and liable to pay customs duty at the rate prevailing on 24th October 1989.
7. The petitioner has now applied for withdrawal of the petition. In the circumstances set out above, I do not see why the petition should be allowed to be withdrawn. The petition, in my opinion, appears to be a gross abuse of the process of court.
8. The petition is, therefore, dismissed. The petitioner is ordered to pay differential duty accordingly so as to pay duty at the rate prevailing on 24th October, 1989.
9. The petitioner to pay to the Respondents examplary costs in the above circumstances, which are fixed at Rs. 10,000/-. The Respondents will be at liberty to encash the bank guarantee which is furnished by the petitioner pursuant to the order of 28th November 1989. The petitioner shall pay to the Respondents interest on the differential duty at the rate of 21% in the above circumstances.
10. Writ Petition No. 719/90 : The cargo in Writ Petition No. 719 of 1990 arrived by the same vessel as the cargo in Writ Petition No. 3288/89. In writ petition No. 719/90 the original importers in respect of the consignment of peas covered by this petition were M/s. Vipin Enterprises. Their name was also shown as the importer in the I.G.M. These importers had filed their bill of entry in respect of this consignment of 16th October 1989. Here also the petitioners allege that M/s. Vipin Enterprises had disputes and differences with their foreign seller and they are said to have rejected these goods after they had filed their bill of entry. The petitioners claim to have purchased these goods from the foreign vendors on or about 29th December 1989. Thereafter the steamer agents applied for amendment of the I.G.M. on 14-2-1990 to substitute the name of the petitioners who are M/s. Agrimpex India Pvt. Ltd. in the place of M/s. Vipin Enterprises. The petitioners also submitted a fresh bill of entry dated 13-2-1990 in respect of these consignments. The application for amendment of the I.G.M. has been refused by the Customs authorities. They have also refused to accept the fresh bill of entry filed by the petitioners in this petition.
11. Writ Petition No. 71/90 : The cargo of Peas arrived by vessel 'VOLUSKO' on 16th October 1989. The vessel carried, inter alia, six consignments of peas which are referred to in this writ petition. Three of these consignments were in the name of R.T. Exports P. Ltd., Bombay. The name of this party was shown as an importer in the documents pertaining to these consignments as also in the I.G.M. Two consignments were in the name of Kotak & Co. and one consignment was in the name of Parekh Foods P. Ltd. Their names were shown as importers in the I.G.M. In respect of the three consignments which were in the name of R.T. Exports P. Ltd., Bombay, the said importers filed their bill of entry on 20th October 1989. Kotak & Co. and Parekh Foods P. Ltd. did not file any bills of entry in respect of the consignments in their names.
12. It is the case of the petitioners, who are M/s. Nav Maharashtra Chakan Oil Mills, that there were disputes and differences between these three importers and their foreign vendors. As a result, these importers rejected the documents on or about 20th October 1989. The petitioners in this petition claim to have purchased these six consignments from the original foreign vendors on or about 15th November 1989.
13. The petitioners filed fresh bills of entry dated 22nd November 1989 in respect of the three consignments which originally stood in the name of R.T. Exports P. Ltd. They also filed bills of entry in respect of the other three consignments which were originally in the name of Kotak & Co. and Parekh Food P. Ltd. In respect of the bills of entry relating to the three consignments in the names of Kotak & Co. and Parekh Food P. Ltd., where the bills of entry were filed for the first time on 22-11-1989, the petitioners have been granted benefit of the new notification of 1-11-1989. They have been allowed to clear the goods at the new rate of duty. In respect of the other three consignments which originally stood in the name of R.T. Exports P. Ltd. where bills of entry had already been filed by R.T. Exports P. Ltd., fresh bills of entry submitted by the petitioners have not been accepted by the customs authorities. The Writ Petition No. 71/90 is in respect of these three bills of entry resubmitted by the petitioners and not accepted by the Respondent.
14. The petitioners contend that they have become owner and/or importers of these goods after the said notification of 1st November 1989. Hence they are entitled to the benefit of the said notification in calculating the customs duty payable by them in respect of the consignments in question.
15. Under Section 2(26) an 'importer' in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer. An "importer", therefore, as per this definition would include any person who becomes the owner of the goods between the time of their importation and the time when they are cleared for home consumption. This definition is undoubtedly wide enough to include the petitioners in these writ petitions also.
16. What is important, however, is that the duty of customs is levied not on the importer but on the goods imported into or exported from India. Sec. 12 of the Customs Act, 1962 provided that 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. The rate of duty is specified under Sec. 15 of the Customs Act. Under Sec. 15(1) the rate of duty applicable to any imported goods shall be, inter alia, 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 is presented under that section. The rest of Sec. 15 is not relevant for the present purpose.
17. Under Sec. 46 of the Customs Act, the importer of any goods shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form. In view of this section, therefore, after the goods are imported into India the importer has to file a bill of entry either for home consumption or for warehousing in the prescribed form to the proper officer. When such bill of entry for home consumption is filed, the date of presentation of the bill of entry is the date which is relevant for fixing the rate of duty on the goods so imported.
18. In the present case in respect of both writ petitions Nos. 719/90 and 71/90 the bills of entry were presented by the original importers prior to the date of the new notification which came into effect from 1st November 1989. It is true that these bills of entry were not presented by the present petitioners. They were presented by the original importers. But this can make no difference to the determination of the rate of duty. At the time when these bills of entry were presented, the person who presented these bills of entry was the "importer" within the definition of Sec. 2(26) of the Customs Act. It was only subsequent to the presentation of the bill of entry that the ownership of the goods changed. The present petitioners became the owners of these goods and therefore became the 'importer' within the meaning of the term under Sec. 2(26) of the Customs Act after the presentation of the bill of entry. They are, therefore, entitled to have their names substituted in the bills of entry so presented as also to have the Import General Manifest amended to show them as importers. But, for determining the rate of duty, the relevant date is the date on which the bill of entry was presented for home consumption by the importer under Sec. 46 read with Sec. 15(1). Valid bills of entry for home consumption in respect of these goods were presented by persons who were then the importers, prior to 1st November 1989. The rate of duty, therefore, is the duty prevailing prior to 1st November 1989.
19. In the case of Chowgule & Co. Pvt. Ltd. v. Union of India and Others reported in 1988 (38) ELT 401 (Bombay) a bill of entry had been filed on 12-3-1987 in a wrong form. The Assistant Collector did not discard the bill of entry as invalid but advised the importer to file a bill of entry in the correct form. The bill of entry was accordingly refiled on 20th March 1987. The bill of entry was deemed to be filed on 12-3-1987 and the duty was quantified with reference to date 12th March 1987.
20. In respect of the three bills of entry in writ petition No. 71 of 1990 where the bills of entry for home consumption were filed for the first time after 1st November 1989, the petitioners in that petition have been already given the benefit of exemption notification of 1st November 1989. But in respect of the other three consignments, where bills of entry were already filed by the original importer prior to 1st November 1989, the respondents have rightly rejected the petitioner's claim for a reduced rate of duty.
21. In the premises, the petitioners are liable to pay the duty of customs on the consignments imported by them which are the subject-matter of dispute in these petitions at the rate of duty as in force in October 1989. The petitioners have cleared the goods on payment of the reduced rate of duty prevailing from to the Respondents differential duty being the difference between the duty paid by them at the time of clearance of the goods and the duty payable as in October 1989. It is ordered accordingly. The respondents will be at liberty to realise the bank guarantee (if any) furnished by the petitioners under the interim orders passed in these petitions.
22. The two petitions being Writ Petition Nos. 71/90 and 719/90 are, therefore, dismissed.
23. Rule is discharged.
24. On the application of the petitioners, the Bank guarantees not to be encashed for a period of two weeks on the petitioners undertaking to keep the Bank guarantees alive for a period of at least 4 weeks from today.