Dhiraj Lal R. Vohra And Ors. vs Union Of India (Uoi) And Ors. on 9 December, 1992 Equivalent citations: 1993(66)ELT551(SC), 1992(3)SCALE375, 1993SUPP(3)SCC453, [1992]SUPP3SCR494, AIRONLINE 1992 SC 108, (1992) 3 SCR 494 (SC), (1993) 49 DLT 343, (1993) 66 ELT 551, 1993 KERLJ(TAX) 71, 1993 SCC (SUPP) 3 453, 1993 UJ(SC) 1 231, (1997) 68 ECR 778 Author: K. Ramaswamy Bench: Kuldip Singh, K. Ramaswamy JUDGMENT K. Ramaswamy, J. 1. These Writ Petitions under Article 32 raise common question of law arising from same set of facts between the same parties though for different consignments. Hence they are disposed of by common judgment. The petitioner seeks writ of mandamus or any appropriate directions that the component/parts of ball bearings imported from foreign supplier M/s. Impex Matel Lucka, Warbazawa (Poland) are liable to excise duty prevalent as on February 20, 1989 and to release the goods on payment thereof or in the alternative to declare Section 15(1)(a) ultra vires of Articles 14, 19(1)(g), 21, 265 and 300A of the Constitution. The facts arc that the petitioner placed in January-February, 1988 an order with the Indian agent of the foreign supplier M/ s. Impex Matel Lucka, Warszawa, to supply ball bearings and irrevocable letters of credit were opened on July 13, 1988 for Rs. 13,07,830/-. The foreign supplier shopped the goods in M/ s Stefan Czarnickei under bill of lading No. 9 and invoice No. 06/222/71154 dated December 31, 1988. The ship arrived on February 20, 1988 at Madras port and was ready to discharge the cargo. It delivered the import manifest under No. 1 16 on the even date but due to continued strike the cargo could to be handled. On February 27, 1989 the petitioner presented the bill of entry ''for clearance of goods for home consumption'' and it was entered at No. 012036 which was received in the appraising section of the group on February 28, 1989. The ship arrived into the port and was berthed on March 2, 1989. The entry inward was granted on March 2, 1989. From March 1, 1989 the rate of excise duty was altered. It was increased at 150% ad valorem plus Rs. 300/- per piece for certain sizes and for other sizes duty was raised to 150% ad valorem plus weight based duty. The result was that pre-tariff duty was Rs. 15,73,611.05/ - while as per the new tariff levy effective from March 1, 1989, the difference came to Rs. 1,80,46,092.64. Dhiraj Lal R. Vohra And Ors. vs Union Of India (Uoi) And Ors. on 9 December, 1992  1 2. Sri Salve, learned senior counsel for the petitioner contended that since the ship had entered into the Indian waters on February 20, 1989 and was ready to discharge the cargo, waiting clearance into the port and due to reasons beyond the control of the ship or the petitioner the goods cold not be cleared until March 2, 1989 by which date the rate of levy was materially changed. As the cargo was ready for discharge from the ship from the Indian territorial waters from February 20, 1989 the duty prevailed as on that date shall be the proper duty. The petitioner presented the bill of entry for clearance of the goods for home consumption of February 27, 1989 which was received by the appraising section on February 28, 1989, that would be at least the proper date for determination of the rate of levy. We find no force in the contention. Section 15 of the Customs Act of 1962 for short 'the Act' prescribe the rate of duly and tariff valuation on imported goods thus: 15(1) The rate of duty 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. Section 15(2) is not relevant for the purpose of the case hence omitted. Section 31. Imported goods not to be unloaded from vessel until entry inwards granted.- (1) The master of the vessel shall not permit the unloading of any imported goods until an order has been given by the proper officer granting entry inwards to such vessel. (2) No order under Sub-section (1) shall be given until an import manifest has been delivered or the proper officer is satisfied that there was sufficient cause for non delivering it. (3) Nothing in this section shall apply to the unloading of baggage accompanying a passenger or a member of the crew, mail bags, animals, perishable goods and hazardous goods. Section 46. Entry of goods on importation.- Dhiraj Lal R. Vohra And Ors. vs Union Of India (Uoi) And Ors. on 9 December, 1992  2 (1) The importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form; Provided that if the importer makes and subscribes to a declaration before the proper officer, to the effect that he is unable for want of full information to furnish all the particulars of the goods required under this Sub-section , the proper officer may, pending the production of such information, permit him, previous to the entry thereof: (a) to examine the goods in the presence of an officer of customs, or (b) to deposit the goods in a public warehouse appointed under Section 57 without warehousing the same. (3) A bill of entry under Sub-section (1) may be presented at any time after the delivery of the import manifest or import report as the case may be. (5) If the proper officer is satisfied that the interest of revenue arc not prejudicially affected and that there was no fraudulent intention, he may permit substitution of a bill of entry for home consumption for a bill of entry for warehousing or vice versa. Sub-sections (2) and (4) are omitted as being irrelevant. 3. It is clear from bare reading of these relevant provisions that the due date to calculate the rate of duty applicable to any imported goods shall be the rate and valuation in force, in the case of the goods entered for home consumption under Section 46, is the date on which the bill of entry in respect of such goods is presented under that section and in the case of goods cleared from a warehouse under Section 58, the date on which the goods arc actually removed from the warehouse. By operation of the proviso if a bill of entry has been presented before the date of an entry inwards the bill of entry shall be deemed to have been presented "on the date of such entry inwards" but would be subject to the operation of Section 66 and 31(1) of the Act. Section 46(1) provides that the importer of any goods, other than goods intended for transit or transhipment, shall make entry thereof by presenting to the proper officer a bill of entry for whom consumption or warehousing in the prescribed form and it may be presented under Sub-section (3) thereof at anytime after delivery of the import manifest. Section 31(1) provides that the master of the vessel shall not permit the unloading of any imported goods until an order has been given by the proper officer "granting entry inwards" to such vessel and no order under Sub-section (1) shall be given until an import manifest has been delivered or the proper officer is satisfied that there was sufficient cause for not delivering it. Granting entry inward on delivery of import manifest and the date of arrival of the vessel into port admittedly are on March 2, 1989 and the Master of the vessel made a declaration in this behalf that they would discharge the cargo on March 2, 1989. Therefore, the relevant date under Section 15(1)(a) is the date on which entry inwards after delivery of import manifest was granted to discharge the cargo for the purpose of the levy of the customs duty and rate of tariff. The contention, therefore, that the ship entered Indian territorial waters on February 20, 1989 and was ready to discharge the cargo is not relevant for the purpose of Section 15(1) read with sccs. 46 and 31 of the Dhiraj Lal R. Vohra And Ors. vs Union Of India (Uoi) And Ors. on 9 December, 1992  3 Act. The prior entries regarding presentation of the bill of entry for clearance of the goods on February 27, 1989 and their receipt in the appraising section on February 28, 1989 also arc irrelevant. The relevant date to fix the rate of customs duty, therefore, is March 2, 1989. The rate prevailed as on that date would be the duty to which the goods imported arc liable to the impost and the goods would be cleared on its payment in accordance with the rate of levy of customs prevailing as on March 2, 1989. 4. It is next contended by Sri Salve that this Court by order dated April 11, 1989 directed to release the goods subject to certain conditions and directed the petitioner to keep them in the petitioner's godown and by further order dated September 12, 1989 this Court directed the customs authorities to put lock and key to the godown of the petitioner in which the goods were stored. This court by further order dated May 11, 1992 directed the respondents to release the goods on certain condition i.e. the petitioner's paying an amount equal to twice the invoice value of the goods or to furnish bank guarantees for the same. This court by further order dated August 11, 1992 directed the Government to consider sympathetically the facts and circumstances of the case and if possible to scale down the duty to a figure bearing a reasonable correlation to the value of the goods imported and that the representation is still pending consideration. Based on these subsequent events a further contention has been raised that by operation of Sub-section (5) of Section 46 this Court could give a proper direction to slash down the rate of duty or may direct to levy the duty prevailing as on the date of the release treating the goods under Section 15(1)(b) of the Act read with Section 68 of the Act. We have given our due consideration but find it difficult to accede to the contention. It would he clear that the rate of duty and tariff valuation on the imported goods cover under Section 15(1)(a) is the date on which the bill of entry is presented Under Section 46 read with Section 31 while the rate of the duty and tariff valuation in respect of the goods covered Under Section 15(1)(b) is the date on which the goods are actually removed from the warehouse Under Section 68. The manifest intention would, therefore, be clear that there should be a declaration in the prescribed form by the importer of his intention to clear the goods either for home consumption or keep the goods in public warehouse. The purpose of granting interim directions was to relieve the petitioner from payment of needless demurrage which would not be converted as substitute to statutory compliance of the operation of Section 15(1)(a) read with Section 46 or Section 15(1)(b) read with Section 68 of the Act, as the case may be. Once statutory declaration required cither under Section 15(1)(a) or 15(1)(b) has been made, it is determinative and the due date is the relevant date mentioned in the relevant provision for imposition of customs duty and rate of tariff. In this behalf a contention has been raised by Sri Salve that Under Section 58 of the Act it is permissible to the Customs Collector to grant licence to a private warehouse wherein the dutiable goods imported by or on behalf of the licensee or any other imported goods in respect of which facilities for deposit in a public warehousing are not available may be deposited without payment of duty. The directions of this Court may be treated to be Under Section 58. The arrangement Under Section 58(1) appears to be to meet certain eventualities. To grant licence to private warehouse is an exception wherein dutiable goods or other imported goods may be kept in deposit. The normal rule is that they shall be kept in public warehouse. If the interim directions of the court arc taken to be substitute for the statutory operation of the relevant provisions, the interest of the revenue would be prejudicially effected and the fraudulent conduct and acts done in furtherance thereof would get legitimacy to avoid payment of duty and tariff prevailing as on either dates on which the bill of entry was presented or the goods Dhiraj Lal R. Vohra And Ors. vs Union Of India (Uoi) And Ors. on 9 December, 1992  4 are actually removed from the warehouse. It would be easy for an importer to have the goods imported, get an order from the court to keep them in private warehousing till either the rate of tariff is reduced or the price of the goods are substantially increased by creating artificial scarcity in the market which would jeopardous the economy of the country. Accordingly we are of the considered opinion that the importer cannot be permitted to circumvent the law through judicial process which is otherwise impermissible under the Act. 5. Accordingly we find no force in the contention and is rejected. The contention of the petitioner that Section 15(1) of the Act is ultra vires of the provisions of the Constitution is no longer res integra. A Constitution Bench of this Court in M. Jhangir Bhatusha etc. etc. v. Union of India and Ors. etc. etc. upheld the validity of Section 15(1) and we do not find it necessary to once again traverse the contention denovo. This court, as seen, by order dated August 11, 1992 directed that the respondent may consider the case sympathetically. It is open to the Government to consider the same and pass an appropriate order. Subject to the above observations the writ petitions are dismissed but, however, without costs. Dhiraj Lal R. Vohra And Ors. vs Union Of India (Uoi) And Ors. on 9 December, 1992  5