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

1. These appeals by special leave arise out of the order of the Central Government dated January 16, 1969 by which six revisional applications of the appellants, were dismissed, and a similar order dated March 19, 1969, is the remaining case. As the basic facts and the law governing them are quite similar, it will be sufficient in deal with the common point in controversy before us on the basis of the admitted facts, and to dispose of the appeals together.2. The appellants obtained licences for the import of 102 cases of 3,000 Kgs. of nylon yarn. The yarn was shipped to Bombay on the basis of a letter of credit in favour of the foreign suppliers. When the shipment arrived, the appellant received the bill of lading and other documents of title from the bankers on or about August, 23, 1965 and paid for the same. They lodged the bill of entry the same day and it has been claimed that the goods were assessed for duty by the customs authorities at a certain figure. The appellant stored the goods in the warehouse on December, 22, 1965. They cleared 32 cases forconsumption on May, 10, 1965 and there is no controversy in regard to it. The currency was valued on June 6, 1966, and the Custom (Amendment) Ordinance, 1966, was promulgated on July 7, 1966, by which Sections 14 and 15 of the Custom Act, hereinafter referred to as the Act, were amended. The Ordinance was replaced by the Customs (Amendment) Act, 1966. The appellant cleared 12 cases of the aforesaid consignment on or about September, 21, 1966. Another 12 cases were cleared on October, 10, 1966 and 46 cases were cleared in two lots on or about December, 30, 1966 and February, 20, 1967. Their grievance was that the cases were allowed to be cleared on payment ofduty according to the amended provisions of the Act. They paid the duty under protest and applied for refund of the excess payment on the ground that the amended law was not applicable as the consignments had been received, stored and assessed to duty before the promulgation of the Ordinance. The applications of the appellants for refund were rejected by the customs authorities and their appeals were dismissed by the Appellate Collector of Customs on the ground that the amended Sections 14 and 15 of the Act were applicable to the consignments in question. The appellants filed revision application before the Central Government, but they were 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.

Court's reasoning:
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.