Case: Prakash Cotton Mills (P) Ltd Vs. B. Sen &amp; Ors

dismissed by the aforesaid common impugned order dated January 16, 1969. They have therefore approached this Court for a redress of their grievance.3. The facts relating to Civil Appeal No. 2219 of 1969, are quite similar, except that the consignment in that case was of 63 cases of nylon yarn, which were stored in the warehouse on December, 14, 1965, and were cleared on May 25, 1967. In that case also the appellants paid the duty under the pr visions of the amended Sections under protest, and successfully applied for refund of the so-called excess duty. They failed in their appeals to the Appellate Collector of Customs and their application for revision was rejected by the Central Government on March 19, 1969.4. It will thus appear that the controversy in these two sets of cases relates to the short question whether the custom authorities were justified in applying the rate of duty (to the imported goods in question) according to the rate prevalent on the date of their actual removal from the warehouse.5. It will be recalled that the Customs (Amendment) Ordinance, 1966; was promulgated and came into force on July 7, 1966, and was re­placed by the Customs (Amendment) Act, 1966. The amendment in question were by way of substitution of Sections 14 and 15 of the Act by the new Sections. It has been argued by Mr. Chitale for the appellants that the material change was that made in Sub section (1) of Section 15 of the Act by substituting the words “the rate of duty, rate of exchange” for the words “the rate of duty.” He has therefore argued that the customs authorities were not entitled to take the new “rate of exchange”, at the depreciated value of the currency, into consideration in respect of the consignment in question as they had been shipped to Bombay and stored in the warehouse before the amended Section 15 came into force. The learned counsel tried to argue that the order of assessment of the customs duty were also made before the amendment Ordinance was promulgated on July 7, 1966, but he did not pursue that line of argument because he was not in a position to produce the so-called assessment orders. But, as we shall show, even if it were assumed that any such order or orders had been made before July 7, 1966, that could not possibly affect the correct rate of duty applicable to the imported goods.6. A reference to Sections 14 and 15 of the Act will show that while Section 14 deals with the valuation of goods for purposes of assessment, it is Section 15 which specifies the date for determination of the rate of duty and tariff valuation of imported goods. The amended Section reads as follows:“15(1) The rate of duty, rate of exchange and tariff valuation, if any, applicable to any imported goods, shall be 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;(b) in the case of goods cleared from a warehouse under Section 68, on the date on which the goods are actually removed from the warehouse;(c) in the case of any other goods, on the date of payment of duty;Provided that if a bill of entry has been presented before the date of entry inwards of the vessel by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards.(2) The provisions of this Section shall not apply to baggage and goods imported by post.(3) For the purpose of Section 14 and this Section(a) “rate of exchange” means the rate of exchange determined by the Central Government for the conversion of Indian currency into foreign currency or foreign currency into Indian currency;(b) “foreign currency” and “Indian currency” have the meanings respectively assigned to them in the Foreign Exchange Regulation Act, 1947.”7. It is thus clear requirement of clause (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 warehoused goods are actually removed from the warehouse. A cross-reference to Section 49 of the Act shows that an importer May apply to the Assistant Collector of Customs for permission to store the imported goods in a warehouse pending their clearance, and he May be permitted to do so. The other relevant provisions in that contained in Section 68 of the Act which provides that the importer of any warehoused goods may clear them for “home consumption” if inter alia, the import duty leviable on them has been paid. That is why clause (b) of Sub-section (1) of Section 15 of the Act makes a reference to Section 68. It is therefore quite clear that the rate of duty, rate of exchange and tariff valuation shall be those in force on the date of actual removal of the warehoused goods from the warehouse. As it is not in dispute before us that the goods, which are the subject matter of the appeals before us, were removed from the warehouse after the amending Ordinance had come into force on July 7, 1966, the customs authorities and the Central Government were quite right in taking the view that the rate of duty applicable to the imported goods had to be determined according to the law which was prevalent on the date they were actually removed from the warehouse, namely, the amended Sections 14 and 15 of the Act. There is therefore no force in the argument that the requirement of the amended Section 15 should have been ignored simply because the goods, were imported before it came into force, or that their bills of lading or bills of entry were lodged before that date.8.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]7. It is thus clear requirement of clause (b) of Sub-section (1) of Section 15 of the Act that therate of duty, rate ofexchange and tariff valuation applicable to any imported goods shall be the rate and valuation in force on the date on which the warehoused goods are actually removed from the warehouse. A cross-reference to Section 49 of the Act shows that an importer May apply to the Assistant Collector of Customs for permission to store the imported goods in a warehouse pending their clearance, and he May be permitted to do so. The other relevant provisions in that contained in Section 68 of the Act which provides that the importer of any warehoused goods may clear them forif inter alia, the import duty leviable on them has been paid. That is why clause (b) of Sub-section (1) of Section 15 of the Act makes a reference to Section 68. It is therefore quite clear that therate of duty, rate ofexchange and tariff valuation shall be those in force on the date of actual removal of the warehoused goods from the warehouse. As it is not in dispute before us that the goods, which are the subject matter of the appeals before us, were removed from the warehouse after the amending Ordinance had come into force on July 7, 1966, the customs authorities and the Central Government were quite right in taking the view that the rate of duty applicable to the imported goods had to be determined according to the law which was prevalent on the date they were actually removed from the warehouse, namely, the amended Sections 14 and 15 of the Act. There is therefore no force in the argument that the requirement of the amended Section 15 should have been ignored simply because the goods, were imported before it came into force, or that their bills of lading or bills of entry were lodged before that date.