Customs, Excise and Gold Tribunal - Tamil Nadu
Bharat Electronics Ltd. vs Collector Of Customs on 15 February, 1983
Equivalent citations: 1983ECR405D(TRI.-CHENNAI), 1983(12)ELT653(TRI-CHENNAI)
ORDER
1. Appeal under Section 129 of the Customs Act, 1962 praying that in the circumstances stated therein the Tribunal will be pleased to order refund of duty of Rs. 30, 263.68 paid on shortages.
2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri N. Clifford for the appellants and upon hearing the arguments of Shri S.K. Choudhury, Senior Departmental Representative for the respondent, the Tribunal makes the following order :
3. This petition was filed before the Government of India against the Order-in-appeal No. C 3/1287/81 dated 5-5-81/17-6-81 of the Appellate Collector of Customs, Madras, passed under Section 128 of the Customs Act, 1962 rejecting their appeal against the order No. S 25/754J/80-AP dated 28-1-81/5-2-81 of the Assistant Collector of Customs (Refunds), Custom House, Madras. By virtue of Section 131-B of the Customs Act, 1962, this petition has now been transferred to the Tribunal to be heard as an appeal.
4. The Assistant Collector had rejected the claim for refund of duty on shortages in a package containing dry fit batteries on the ground that the shortages were brought to the notice of the Customs after the proper officer had made an order for clearance of the goods for home consumption. At the time of survey which was held after the order for clearance was made but before physical clearance of the goods from the Port Trust premises, the package was found empty. Though he has not said so, the Assistant Collector appears to have based his order applying the provisions of Section 13 of the Customs Act, 1962. At the appeal stage, the claim was pressed under Section 23(1) of the Customs, Act, 1962. The Appellate Collector found that in the circumstances of the case relief could be claimed only in terms of Section 13 ; and under Section 13, as observed by the Assistant Collector, the appellants had no case on merits. In the revision application filed before the Government of India, it is urged that the correct provisions to be applied are those under Section 23(1) of the Customs Act, 1962 ; a Customs Officer was also present during the survey.
5. The principal point that arises for decision is whether in a case where goods are found to be not available at the time of physical clearance of packages from Port Trust's custody and they are likely to have been pilfered prior to such clearance, the provisions of Section 13 of the Customs Act, 1962 will apply, or those of Section 23. The petitioners claim that-sec. 23 is appropriate and have relied on the judgment of the Delhi High Court in the Sialkot Industrial Corporation, Meerut v. Union of India and Anr.-Civil Writ No. 647 of 1968 (1978 T.L.R. 1700=1979 ELT 329 (Del). We have studied carefully the facts of that case including the arguments advanced before the Court and the line of reasoning adopted. In that case His Lordship has held that the expression 'lost or destroyed' has been used in the Customs Act in the generic and comprehensive sense and includes within it the case of loss to the party by pilferage. In doing so His Lordship has referred to the decision of the Supreme Court in East and West Steamship Company v. S.K. Ramalingam Chettiar (AIR 1968 SC 1058) construing the provisions of the Carriage of Goods by Sea Act, 1925; and the decision of the Bombay High Court in Martab Ali Union of India (AlR 1954 Bom. 297) and of the Andhra Pradesh High Court in Union of India v Mitayagiri Pullajpa (AIR 1958 AP 475 at 478), construing the provisions of Section 77 of the Railways Act, 1980. However, His Lordship has noted the view that the construction of a particular expression in one statute need not follow the construction of the same expression in other statutes. Thereafter, His Lordship went on to analyse the circumstances in which Clause 23 was incorporated in the Customs Bill and referred to the notes on Clause 23 as presented to Parliament.
6. As already observed by His Lordship himself, the expression in one statute need not follow the construction of the same expression in other statutes. The law on this point has been stated by the Supreme Court on more than one occasion. In the case of Commissioner of Income-tax, West Bengal v Benoy Kumar Sahas Roy (AIR 1957 SC 768) the Supreme Court observed as follows :
"Whether the narrower or the wider sense of the term 'agriculture' should be adopted in a particular case depends not only upon provisions of the various statutes in which the same occurs but also upon the facts and circumstances of each case. The definition of the term in one statute does not afford a guide to the construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally."
Again in the case of Ram Narain v State of Uttar Pradesh and Ors. (AIR 1957 SC 18), in interpreting the expression 'tax on circumstances and property' the Supreme Court observed :
"It was rightly pointed out that it is no sound principle of construction to interpret expressions used in one Act with reference to their use in another Act. The meanings of words and expressions used in one Act must take their colour from the context in which they appear."
7. Clause 23 of the Customs Bill was intended to replace Section 122 of the Sea Customs Act, 1878 which read as follows:-
'122. Power to remit duties on warehoused goods lost or destroyed. If any goods in respect of which a bond has been executed under Section 92 and which have not been cleared for home consumption are lost or destroyed by unavoidable accident or delay, he (Chief Customs Officer) may in his discretion remit the duties due thereon :
Provided that, if any such goods be so lost or destroyed in a private warehouse, notice thereof be given to the Customs Collector within forty-eight hours after the discovery of such loss or destruction."
Under this section remission of duty could be allowed in the case of goods (i) in a bonded warehouse ; (ii) when they are lost or destroyed by unavoidable accident or delay.
8. It may be noted that under Sea Customs Act, 1878 remission of duty in the case of warehoused goods was being granted only in cases other than those where the goods were lost by theft. This had been made clear as early as 1928 in the Central Board of Revenue Order-in-Appeal No. 7 of 1928. The note on Clause 23 of the Customs Bill states "under the revised provision remission of duty may be allowed in all cases where the goods are lost or destroyed whatever may be the reasons." In the Bill the concession was being extended to goods cleared for home consumption directly as well as those which are bonded on import and cleared later on from a warehouse for home consumption; again the condition that the cause of loss or destruction should be unavoidable accident or delay has been omitted, extending the provision to all cases of Joss or destruction. Keeping in view the then existing practice, it would, by implication, be seen that what the Legislature sought to extend was a situation in relation to warehoused goods to goods cleared for home consumption directly. If this be so, the object of introducing the new clause would appropriately refer only to cases of complete loss or destruction and not deprivation by way of theft or pilferage. This aspect does not seem to have been brought to the notice of the Court in the Sialkot Industrial Corporation case.
9. We have two provisions in the Customs Act, 1952-Sec. 13 and Section 23, dealing with deprivation of goods to the importer. Section 23 deals with a situation of loss or destruction. Section 13 specifically refers to loss by way of pilferage. Section 23 is more broadly worded. If the interpretation placed by His Lordship of the Delhi High Court is accepted. Section 23 will cover all cases where there is deprivation of goods prior to their physical clearance for home consumption ; this would obviously cover all cases wherein there is deprivation of property because of pilferage during the period upto the passing of an order for clearance by the authorised Customs Officer. In this view, Section 13 would become redundant.
10. While the circumstances leading to the enactment of Section 23 had been canvassed before the high Court, that relating to Section 13 does not seem to have been so canvassed, Section 13 of the Customs Act, 1962 was a new provision introduced in the Customs Bill. Clause 13 as introduced in the Lok Sabha read as follows:
"If any imported goods are pilfered after the unloading thereof and before clearance for home consumption or deposit in a warehouse, the importer shall be liable to pay the duty leviable on such goods."
The Note on this clause read as,-
"This is a new provision which makes the importer liable to pay duty on goods which are pilfered before clearance. Under the existing Act, an importer can abandon an entire consignment even though it may have been pilfered in which case he is not liable to pay duty."
Thus, the importer was sought to be made liable for duty on goods which are pilfered before clearance. However, when the Bill was reported on by the Select Committee, that Committee observed as follows :
"The Committee have given thought to the clause and are of the opinion that when the imported goods are not under the importer's control, he should not be required to pay the duty on any goods that may be pilfered before the Customs Officer makes an order for clearance of the goods."
Clause 13 was amended accordingly and the present Section 13 reads as follows :
"13. Duty on pilfered goods.-If any imported goods are pilfered after the unloading thereof and before the proper officer has made an order for clearance for home consumption or deposit in a warehouse, the importer shall not be liable to pay the duty leviable on such goods except where such goods are restored to the importer after pilferage."
It will, thus be seen that the Government started with the intention of fixing responsibility for payment of duty on the goods pilfered. In deference to the recommendations of the Select Committee, the provision was amended to confine liability of the importer to a period of time after the Customs Officer makes an order for clearance of the goods. It is relevant to note that the Customs will cease to have control over the goods after an order for clearance is passed. Thus, liability to duty on pilfered goods was the subject matter of detailed consideration by the Parliament at the time of passing the Customs Act, 1962. It would be inappropriate to interpret the Act in such a way so as to render this new provision either otiose or redundant.
11. Such a view would not be in accord with the accepted canons of interpretation of a statute as a whole. In J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. State of Uttar Pradesh and Ors. (AIR 1961 SC 1170) the Supreme Court observed that-
"In the interpretation of statutes the courts always presume that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect." In the case of Ghanshyamdas v. Regional Assistant Commissioner of Sales Tax, Nagpur and Ors.(AIR 1964 SC 766) that Court observed-
"A construction which would attribute redundancy to Legislature shall not be accepted except for compelling reasons."
Again in the case of Gamini Krishnayya and Ors. v. Guraza Seshachalam and Ors. (AIR 1965 SC 639) it was pointed out that-
"It is common place that every provision of a statute has to be given full effect and wherever possible the court should not place that construction upon a provision which would tend to make it redundant or to overlap another provision or to limit its application in disregard of its general applicability unless, of course, that is the only construction which could be reasonably placed upon it."
Further, in the case of D. Sanjeevayya v. Election Tribunal, Andhra Pradesh and Ors. (AIR 1967 SC 1211) the Supreme Court observed that-
"It is a well-settled rule of construction that the provisions of a statute should be so read as to harmonise with one another and the provisions of one section cannot be used to defeat those of another unless it is impossible to effect reconciliation between them."
In the light of these pronouncements of the Supreme Court an interpretation which would make Section 13 redundant would not, in our view, be correct.
12. If we were to give meaning to both Sections 13 and 23, this can best be done by restricting Section 23 to situations other than pilferage and referring to Section 13 where there is a specific provision in cases of pilferage. Under the circumstances we respectfully disagree with the view of the Delhi High Court and find that in a situation where the goods are not available at the time of delivery and the non-availability is not due to physical destruction or loss but due to theft, pilferage and the like, the provisions of Section 13 should prevail. In this view, as in this case the discovery of shortage or nonavailability of goods was after the date of order of the officer of Customs allowing the clearance of the goods, the claim for refund of duty be hit by the bar under Section 13 of the Customs Act, 1962 and has to be rejected.
13. A plea has been raised that at the time of the survey a Customs Officer was present and hence the Department cannot refuse to accept the findings of that survey, on principles analogous to doctrine of Estoppel. It is a well-recognised principle that there is no estoppel against a statute. The presence of an officer of Customs cannot by itself bind the Government for a liability which is not expected to bear in terms of the clear provisions of the statute.
In the result the appeal is rejected.