Judgment:
1. In this appeal, which was originally filed as a revision application before the Central Government, the appellants have claimed re-assessment of the goods, which were cleared ex-bond, at the rate of duty prevailing on the date on which the goods entered into the territorial waters of India as against the assessment made at the rate prevailing on the date of removal from the warehouse.
2. The facts of the case, in brief, are that the appellants imported a consignment consisting of 25 packages of dehumidification plant valued at Rs. 11,11,373/-. A bill of entry for clearance of the goods for home consumption was filed on 27-11-1975. As there were some objections relating to classification of the goods and I.T.C. licence, the appellants requested the Assistant Collector of Customs on 27-12-1975, for permission to warehouse the goods. An into-bond bill of entry was filed on 1-1-1976 and the goods were warehoused on 23-1-1976. The appellants filed appeal before the Central Board of Excise & Customs, against the Collector of Customs' order to charge countervailing duty on the goods. The appeal was allowed by the Board. The appellants also filed an appeal before the Collector of Customs (Appeals) against the order of warning passed by the Deputy Collector of Customs for alleged breach of I.T.C. regulation. That appeal was also allowed by the Collector (Appeals). Thereafter, the appellants filed an ex-bond bill of entry on 9-2-1977 and paid duty levied on that bill of entry on 26-2-1977. At the time of filing the bill of entry in November, 1975, the rate of duty applicable to the goods was 40% ad valorem under Item 72(b) of the I.T.C. At the time of clearing the goods from the warehouse on ex-bond bill of entry, the goods were assessed to duty at the rate of 60% ad valorem plus 15% ad valorem under item 84.59(1) of the C.T.A., 1975. The appellants contested this assessment on the ground that the goods should be assessed to duty at the rate which was prevailing on the date of their entry into the territorial waters of India and not at the rate prevailing at the time of their clearance ex-bond from the warehouse. They relied on two judgements of Bombay High Court, viz., in the cases of (a) Synthetics & Chemicals 1981 ELT 414 (Bom), and (b) Sylvania Laxman Ltd. wherein it was held that the provision of Section 15(1)(b) of the Customs Act, 1962, was inoperative. The Deputy Collector of Customs did not agree with this view and 'held that the provisions of Section 15(b) of the Customs Act was operative in this case and the goods were correctly classified under Heading 84.59(1) of the C.T.A., 1975. Against the said order, the appellants filed appeal before the Collector of Customs (Appeals). In the grounds of that appeal, the appellants, inter alia, stated that two judgments relied upon by them were very clear on the issue involved. As a result, the goods on clearance on ex-bond bill of entry should carry the rate of duty which was leviable at the time of their entry into the territorial waters of India and not at the rate prevailing on the date of clearance from Bond. They requested that the benefit flowing from the above mentioned judgments should be given to them and the goods be re-assessed at 40% ad valorem, being the rate of duty prevalent at the time of their entry into the territorial waters of India. The appeal was rejected by the Collector of Customs (Appeals). Hence, the appellants filed the revision application, which is now before us for disposal as an appeal.
3. While rejecting the appeal, the Collector of Customs (Appeals) held that:- "It is clear that the duty is leviable under Section 12 itself though at the rates prescribed elsewhere. The expression "goods imported into India or exported from India", must, of necessity, be interpreted in the light of the definitions of "import" and "export" in Sections 2(23) and 2(18) respectively. Section 12, which is the charging section, makes import or export of goods, as the case may be, the taxable event. No doubt import or export takes place when the goods are physically brought in, or as the case may be, taken out of the territory of India. But the provisions of Sections 15 & 16 have to their respective scope and effect when one comes to the question of actually charging, determining and quantifying the duty.
In this context, the relevant dates mentioned in Sections 15 & 16 are significant. The dates for the purposes of import or export duties, are the statutory dates mentioned in Section 15(1) or Section 16 and not the date of physical entry or exist.
The Supreme Court had occasion to examine a similar problem in the case of Prakash Cotton Mills (P) Ltd., Appellants v. B. Sen and Ors., Respondents (AIR 1979 SC 675-677) in which their Lordships held that, 'it is thus the clear requirement of Cl(b) of Sub-section (1) of Section 15 of the Act that the rate of duty, rate of exchange and tariff valuation applicable to any import goods shall be the rate and valuation in force on the date on which the warehoused goods are actually removed from the warehouse'.
In the light of the above judgment of the Supreme Court, the present appeal is not tenable and is accordingly rejected".
4. In the Revision Application, the appellants have stated that their case is exactly similar to M/s Sylvania & Laxman Ltd. and the judgment of Bombay High Court is applicable to their case. The High Court has held that the goods were liable to duty at the rate prevailing on the date of entry of the goods in the territorial waters of India in terms of Section 12 of Customs Act, 1962 and that the provisions of Section 15(b) of Customs Act were in-operative in such cases. The appellants have also stated that their case is distinguishable from the case of Prakash Cotton Mills (P) Ltd., inasmuch as this case related to imports made before the amendment of Sections 14 and 15 of the Customs Act, 1962 by the Amending Act of 1966 and the dispute therein was whether the amended section applied to the goods imported before the amendment or not. They have contended that the position in the present case is quite different as there is no such issue involved. According to them, the judgment of the Supreme Court in the case of Prakash Cotton Mills (P) Ltd. is not applicable to their case. The appellants have further stated that the delay in clearance of the goods was not due to any fault on their part. The Countervailing duty was arbitrarily charged on the goods and the petitioner could not afford to pay countervailing duty of Rs. 18 lakhs (approximately), which was not obviously due from them. The appellants were, therefore, forced by the circumstances to keep the goods in the warehouse pending decision in their appeals before the concerned authorities.
5. In the hearing before us, Shri K.S. Nanavati, Advocate has argued for the appellants and Shri D.K. Saha, J.D.R. has argued on behalf of the respondent. The learned Advocate has pleaded that the goods were warehoused under Section 49 read with Section 46 of the Customs Act, 1962 (hereinafter referred to as the Act). When the goods were actually cleared, the provisions of Section 15(1)(a) of the Act was applicable and not the provisions of Section 15(1)(b). According to Section 15(1)(a), the rate of duty applicable to the imported goods entered for home consumption under Section 46 of the Act is the rate in force on the date on which a bill of entry in respect of the goods is presented under that section. The bill of entry for clearance for home consumption of the goods was filed an 27-11-1975. The rate of duty prevalent on that date, i.e. 40% ad valorem, was, therefore, payable on the goods. As against this, the Customs House charged duty at the rate of 60% ad valorem plus 15% ad valorem, which was the rate prevailing on the date of actual removal of the goods from the warehouse. The learned advocate has, therefore, prayed that the impugned order may be set aside with direction to refund the excess duty paid.
6. Shri D.K. Saha has argued that under Section 49 of the Act, the imported goods, which have been entered for home consumption, may be stored in a warehouse pending clearance, but such goods shall not be deemed to be warehoused goods for the purpose of this Act and the provisions of Chapter IX of the Act shall not apply to such goods. No bond is executed for storing the goods in a warehouse under Section 49.
In this case, the goods were not warehoused under Section 49 on a home consumption bill of entry. The goods were permitted to be warehoused under Section 60 of the Customs Act at the request of the appellants on their executing a bond and filing an into-bond bill of entry as required under Section 59 of the Act. The goods were subsequently cleared by the appellants from the bonded warehouse for home consumption by presenting an ex-bond bill of entry as required under Section 68 of the Act. Having done all these things, the learned advocate can not now say that the goods were bonded under Section 49 of the Act. Shri Saha has further stated that as the goods were cleared from a warehouse under Section 68 of the Act for home consumption on ex-bond bill of entry, the rate of duty prevalent on the date of actual removal of the goods from the warehouse was applicable in terms of the provisions of Section 15(1)(b) of the Act. In support of his argument, Shri Saha has relied upon the judgment dated 17-10-1985 of Bombay High Court in the case of Apar Private Limited and Ors. v. Union of India and Ors., reported in 1985 (22) ELT 644 (Bom) and also on this Tribunal's Order Nos. 222 to 224/86-C dated 5-5-1986 in Appeals No.623/82-C, 207 & 208/86-C [ Bayer (India) Limited v. Collector of Customs, Bombay]. He has, therefore, submitted that the duty has been correctly assessed according to the provisions of law and the appeal deserves to be dismissed.
7. We have carefully considered the case records and the arguments of both sides. The stand taken by the appellants before the lower authorities and also in the revision application filed before the Central Government was that the goods should be assessed to duty at the rate of 40% ad valorem, i.e., the rate which was prevalent on the date when those entered the territorial waters of India and not at 60% ad valorem, which was the rate in force when the goods were removed from the warehouse. During the hearing before us, the learned advocate for the appellants advanced the plea that the goods were warehoused under Section 49 of the Customs Act and hence the same should be charged to duty at the rate which was in force in November, 1975 when the bill of entry for home consumption was first filed. We shall first deal with this argument of the advocate. From the copy of letter No.SC/53/75/5586 dated 27-12-75 written by the appellant company to the Assistant Collector of Customs, we find that the appellants wanted to transfer the goods in the Customs bonded warehouse and requested the Assistant Collector to allow them to change the bill of entry and clear the consignment under bonded bill of entry. In pursuance of this request, the appellants filed an into-bond bill of entry on 1-1-1976 and the goods were warehoused on 23-1-1976. Necessary bond as required under Section 59 of the Act was executed. The goods were warehoused under Bond No. 2218 dated 21-1-1976', as indicated on the top of the Ex-bond Bill of Entry No. 3792 dated 26-2-1977 under which the goods were actually removed from the bonded warehouse under Section 68 of the Act. These facts clearly prove that the goods were bonded under Chapter IX (Warehousing) of the Customs Act and not under Section 49 which falls under Chapter VII of the Act. Further, the learned advocate has not been able to show either from the appellant's letter dated 27-12-1973 or from any other evidence that the goods were stored in the warehouse under Section 49 of the Act. In the circumstances, we are unable to accept the contention of the learned advocate that the goods were kept in the warehouse under Section 49 or that the provisions of Section 15(1)(a) of the Act are applicable to the goods.
8. We shall now deal with the appellant's original contention that the goods were assessable (3 40% ad valorem, which was the rate in force when the goods entered the territorial waters of India. During the hearing before us, Shri Nanavati has stated that the goods entered the Indian Customs waters on 4-12-1975. The appellants relied upon the judgments of Bombay High Court in the cases of (a) Synthetics and Chemicals Limited 1981 ELT414 (Born.) and (b) Sylvania and Laxman Limited in support of their contention and have tried to distinguish their case from the case of Prakash Cottom Mills (P) Ltd. The Collector of Customs (Appeals) has not followed the judgments of Bombay High Court in the cases of (a) Synthetics & Chemicals 1981 ELT 414 (Bom.) and (b) Sylvania Laxman as there was a judgment of the Supreme Court on the issue. The Collector (Appeals) has quoted the following decision of the Supreme Court in the case of Prakash Cotton Mills (P) Limited v. B.Sen and Ors. (AIR "It is thus the clear requirement of Cl(b) of Sub-section (1) of Section 15 of the Act that the rate of duty, rate of exchange and Tariff Valuation applicable to any imported goods shall be the rate and valuation in force on the date on which the warehouse goods are actually removed from the warehouse".
In our view, the distinction sought to be made by the appellants is not genuine. In the above judgment, the Hon'ble Supreme Court has, inter alia, decided the rate of duty applicable to the goods removed from the warehouse. The same is the issue in dispute in the case of the appellants before us. The Collector (Appeals) was justified in following the judgment of the Supreme Court in preference to the judgments of Bombay High Court relied upon by the appellants.
9. We have also before us the. latest judgment of Bombay High Court in the case of Apar Private Ltd. 1985 (22) ELT 644 (Bom.), which is relied upon by the learned Departmental Representative. In the said case, Bombay High Court has held that the rate at which the imported goods are chargeable to customs duty has to be determined under Section-15 of the Customs Act, provided such goods are not wholly exempted from the customs duty when they enter the territorial waters of India. The customs duty has to be charged on the imported goods if they are being cleared immediately at the rate in force on the date of the presentation of the bill of entry, and if warehoused, at the rate in force on the date when the goods are sought to be cleared for home consumption. If, however, the goods were wholly exempted from customs duty by virtue of a Notification under Section 25(1) of the Customs Act on the date when the goods entered the territorial waters of India, no customs duty would be leviable even if the exemption was withdrawn before, the goods are cleared for home consumption. In the case of the appellants before us, basic customs duty at the rate of 40% ad valorem was leviable at the time when the, goods entered the territorial waters of India. According to the ratio of this judgment, therefore, the rate of duty prevailing on the date of the removal of the goods from the bonded Warehouse was applicable. In appeals No. 623/82-C, 207 and 208/86-C, while deciding a similar issue, this Tribunal followed the above judgment, vide Orders No. 222 to 226/86-C dated 5-5-1986. Section 15(1)(b) of the Custdms Act, 1962 specifically provides that the rate of duty applicable to the goods removed from the bonded warehouse under Section 68 of the Act is the rate prevailing on the date of the actual removal of the goods from the warehouse. Admittedly, in the present case, the rate of. duty was 60% ad valorem basic customs duty and 15% ad valorem auxiliary duty on the date when the goods were removed from the bonded warehouse for home consumption. The Customs House correctly charged this rate of duty.
10. In the remaining ground of appeal, the appellants have stated that C.V. duty was charged by the Custom House arbitrarily, which forced them to keep the goods in the warehouse. C.V. duty was charged with the order of the Collector of Customs. Unless there is a doubt of classification, the bill of entry does not go to the Collector for a decision. Apparently, there was some doubt in the mind of the assessing officer because of which the classification was decided by the Collector in this case. Simply because the appellate authority (Central Board of Excise & Customs) reversed the order of the Collector, it cannot be said that the assessment was arbitrary. The appellants have not adduced any reason as to why they considered the Collector's decision as arbitrary. The contention of the appellants, therefore, does not have any force.
11. In view of the above discussions, we find no infirmity in the orders of the lower authorities. In the result, we uphold the impugned order and dismiss the appeal.