ORDER
V.K. Agrawal
1. The issue involved in this appeal, filed by M/s. Jagson International Ltd. is at what rate duty of Customs is chargeable on, and whether benefit of Notification No. 42/92 dated 1.3.92 is available to, Dornier 228 Aircraft imported by them.
2. Briefly stated the facts are that the Appellants brought an used Dornier 228 Aircraft with accessories ad spares ad a self flown flight on 15.10.1991. The Aircraft was got cleared under Rule 58(6) of the Aircraft Rules, 1920. The Aircraft was cleared on 28.10.91 provisionally on a bond of Rs.4.78 crores alongwith a bank guarantee. As the Aircraft was used by the Appellants for Air Taxi Operations, a case of misdeclaration was initiated against them and the Appellants paid part duty on 11.2.92 and part duty on 10.3.92. Subsequently they filed a Bill of Entry for home consumption on 25.3.92 which was assessed to duty amounting to Rs.80,94,219/-. They filed a refund claim on 22.1.93 on the ground that the counter-vailing duty was not leviable on the Aircraft in terms of Notification No. 42/92 dated 1.3.92. The Assistant Commissioner, under Adjudication Order No. 19/96 dated 2.7.96, rejected the refund claim on the ground that the rate of duty applicable is the rate of duty in force on the date of payment of duty under Section 15(1)(c) of the Customs Act and that refund claim is also time barred as it was filed after expiry of 6 months from the date of payment of duty. On appeal, the Commissioner (Appeals), under the impugned Order, rejected their appeal, holding that the Appellants paid part of duty on 11.2.92 after they had been issued with Customs Clearance Permit dated 3.12.1991 and Customs Department initiated a case of misdeclaration against them; that the date of payment of first instalment would be the date of payment of duty on imported goods as envisaged under Section 15(1)(c) of the Act; that the expression “other goods” in Section 15(1)(c) was obviously meant to cover ‘other imported goods’ which had either been imported clandestinely or those goods which had otherwise escaped duty; that the impugned aircraft was covered under ‘other goods which had escaped duty’; that this was evident from two letters dated 3.2.92 and 20.3.92 of the Assistant Commissioner, Customs informing D.G.C.A. that the Appellants had got the aircraft cleared on 28.10.91 by availing exemption by misrepresentation that the aircraft was not to be registered in India whereas the same had been purchased from Royal Government of Bhutan for Air-taxi operation. The Commissioner of Customs also gave his findings that there was no sign of protest from the challan of payment of Customs duty dated 11.2.92; that filing of Bill of Entry was just a formality to avail the benefit of Notification. He relied upon the decision in the case of Collector of Customs vs. Ajanta Offset Packaging Ltd., 1991 (56) ELT 771 (T) which has been upheld by the Supreme Court as reported in 1997 (94) ELT 443 (SC).
3. Shri L.P. Asthana, learned Advocate, submitted that since at the stage of importation, the Appellants were not in a position to decide or categorically state whether the aircraft could be retained in India beyond a period of six months, they cleared the aircraft duty free on the basis of the bond and bank guarantee; that although correspondence had been going on with the D.G.C.A. for permission to fly the aircraft in India and permission had been accorded in principle, a number of other requirements, such as obtaining a Customs Clearance Permit (CCP) and Air taxi permit, had to be met before the aircraft could be retained in India; that before the position could crystalise and before the expiry of stipulated six months, the Customs Authorities demanded the customs duty which had to be paid by them under coercion as the Department had written to the D.G.C.A. to ground the aircraft for non-payment of the Customs duty and consequently the D.G.C.A. had actually grounded the aircraft; that after they had paid duty under coercion and under protest, the orderr grounding the aircraft was revoked; that after obtaining CCP and Air taxi permit, they filed relevant Bill or Entry for home consumption on 25.3.92. The learned Counsel, further, submitted that as in the present case, a bill of entry had been presented, the rate of duty would be the rate applicable on the presentation of the Bill of Entry; that Bill of Entry was filed as per Order; that it is not on record that there was a request for permission to file Bill of Entry; that no procedure had been prescribed under the Customs Act for making payment under protest and as such no letter of protest was necessary; that challan dated 10.3.92 clearly showed that the payment was made under protest; that although this endorsement was not made on first challan, the fact remains that duty was paid because the Aircraft had been grounded; that in any case the Commissioner (Appeals) had not upheld the Order of the Assistant Commissioner on the ground of time bar and the Department had not come in appeal; that the Revenue now cannot argue that the Commissioner (Appeals) should have rejected their refund claim on time limit. He relied on the decision in the case of India Cements Ltd. vs. CCE, 1989 (41) ELT 358 (T) wherein it was held that no form has been prescribed for payment of duty under protest. In this case a letter raising contentions against the levy of duty on the value of packing material was accepted by the Supreme Court as a letter of Protest. Reliance was also placed on the decision in Mafatlal Industries vs. U.O.I., 1997 (89) ELT 247 (SC) wherein the Apex Court held, while interpreting Rule 233B of the Central Excise Rules, that “The Assessee need not particularise the grounds of protest. It is open to him to say that according to him, the duty is not exigible according to law.”
4. The learned Counsel also mentioned that it is not incumbent on the importers to file a Bill of Entry on the date of importation, i.e., 15.10.91; that they can always file a Bill of Entry sometime later and in those cases, he duty would depend upon the date of the presentation of the Bill of Entry and not the date of importation. He, further, mentioned that expression “any other goods” in Section 15(1)(c) means goods for which no Bill of Entry had been filed or goods which were not cleared from warehouse; that chargeability to duty is determined with reference to the date of importation, the rate of duty is determined with reference to the date of importation, the rate of duty is determined with reference to the date of importation, the rate of duty is determined with reference to the provisions of Section 15 only. He relied upon the decision in the case of Union of India vs. Apar Pvt. Ltd., 1999 (112) ELT 3 (SC) wherein it was held that “what is relevant is the day on which the bill of entry in respect of goods is presented under Section 46…..”. He stated that this decision has been followed by the Supreme Court in the case of Garden Silk Mills Ltd. vs. Union of India, 1999 (113) ELT 358 (SC). He continued to submit that Section 46 of the Customs Act does not prescribe any time limit for presentation of Bill of Entry; that none of the Orders passed by both the lower authorities held that Bill of Entry filed by the Appellants was invalid or non est; that the decision in the case of Ajanta Offset Packing, supra, is not applicable to the facts of the present matter as the issue involved was eligibility to Project import in respect of goods which had already been imported. The learned Counsel emphasised that Section 15 of the Customs Act is a neutral section since it has nothing to do with the conduct of the importer; that there is no contradiction in fixing chargeability of goods to duty with reference to time when the goods acquired the character of imported goods i.e. when the taxable event occured and the rate of duty with reference to the rate of presentation of Bill of Entry; that this position is well settled by a number of decisions of the Supreme Court and High Courts. He relied upon the following decisions:
(i) Shah Devchand & Co. vs. U.O.I.
1991 (55) ELT 3 (SC)
(ii) Amber Woollen Mills vs. C.C. Delhi
1998 (102) ELT 518 (SC)
(iii) Union of India vs. Apar Pvt. Ltd.
1999 (112) ELT 3 (SC)
(iv) Garden Silk Mills Ltd. vs. Union of India,
1999 (113) ELT 358 (SC)
wherein it was held that “taxable event being reached at the time when the goods reach the customs barriers and the bill of entry for home consumption is filed.”
(v) Bharat Surfactants (P) Ltd. vs. UOI,
1989 (43) ELT 189 (SC)
(vi) Dhiraj Lal H. Vohra vs. UOI,
1993 (66) ELT 551 (SC)
(vii) D.C.M. vs. U.O.I.
1999 (109) ELT 12 (SC)
Finally, the learned Counsel mentioned that the Order of ‘Out of Customs charge’ is not a procedural matter as held by Madras High Court in the case of Best & Crompton Engineering vs. C.C. Madras, 1997 (93) ELT 21 (Mad) and it is not given to the officer to go back on the Order passed under Section 47 of the Customs Act.
5. Countering the arguments, Shri N.K. Bajpai, learned Advocate for the Revenue, submitted that the present matter is not a case of normal import and, therefore, the provisions of Section 46 and 15 of the Customs Act would not apply; that in the present matter n manifest was filed and the Commissioner in Adjudication Order No. 39/KK/96 dated 27.9.96 while imposing penalty on the present Appellants had also given his findings that provisions of Section 111(f) of the Customs Act were also contravened as a manifest was not filed; that as the Appellate Tribunal upheld that the penalty was imposable on the Appellants vide Final Order No. A/660/98-NB(DB) dated 28.7.98, the contravention of Section 111(f) is deemed to have been upheld; that normal import takes place when a manifest is filed. He relied upon the decision of the Supreme Court in the case of Collector of Customs, Rajkot vs. M/s. Sarabhai International Ltd. in Civil Appeal No. 5071 of 1989 (decided on 7.10.1999) wherein it was held by the Apex Court that he obligation of the respondents must be determined solely upon the basis of Notification dated 17.4.80 under which the imported goods were initially cleared free of duty for being used in connection with the production or packing of goods for export out of India by units within the Kandla Free Trade Zone. The Supreme Court held that it was a condition of the Notification that they would pay duty on imported goods which had not been paid thereon when the imported goods was cleared into Free Trade Zone. “It must, therefore, be held that the respondents are liable to pay the amount of the duty that would have been leviable on the surplus soda ash had it not been cleared into the Free Trade Zone under the said Notification.” The learned Counsel mentioned that int he present matter, the Aircraft in question was allowed to be cleared in terms of Rule 58(6) of the Air Craft Rules; Sub Rule (b) of Rule 58(6) provides for payment of duty; that the ratio of the decision in the case of Sarabhai International, supra, applies on all four in the present matter and the Appellants are liable to pay duty that would have been leviable on the Aircraft had it not been cleared under Rule 58(6)(a) of the Air Craft Rules. He, further, mentioned that this is also evident from the Bond and Bank guarantee, executed by the Appellants on the basis of which the impugned aircraft was cleared without payment of duty.
6. The learned Counsel for the Revenue, further, submitted that mentioning word ‘Protest’ on second challan and filing of bill of entry subsequently are not material at all; that the Counter-Vailing duty is shown on Bill of Entry and there is no mention of protest thereon; the intention of protest should find some expression somewhere; that they themselves did not claim the benefit of the Notification; that the Customs Act does not recognise the payment of Customs duty in part; that in any case the relevant date for determining the rate of duty applicable is the date on which the payment of duty was first made; that the ratio of decisions in Apar Pvt. Ltd. and Garden Silk Mills cases does not advance the case of the Appellants as it does nt apply to the abnormal situation of the present matter. In reply the learned Advocate for the Appellants mentioned that a totally new case has been made out by the Revenue; that the Bond and Bank guarantee stand discharged the movement Bill of Entry was filed; that filing of manifest is not required in their matter as it is applicable under Section 30 to goods carried by a vessel or an aircraft; that the Revenue has not made any submissions on the applicability of Section 15(1)(c) of the Customs Act; that the decision in the case of Sarabhai International relates to goods cleared to a Free Trade Zone and as such is not applicable to the facts of the present matter; further in the said case initially a Bill of Entry was filed for clearing the goods to Kandla Free Trade Zone; that Rule 58(6)(b) of the Aircraft Rules provides for payment of duty in case aircraft is not removed from India within six months; that the Bond also speaks of provisional and as such there was no final determination of duty and as such Sarabhai International decision is not applicable. He concluded by saying that even if Section 15(1)(c) is applicable, date of second payment of duty would be relevant date. The learned Advocate for the Revenue countered by submitting that a new case has not been made as he has relied upon a judgement of the Apex Court of the land; that the use of word ‘provisional’ in bond makes no difference to the duty chargeable from the Appellants in respect of the aircraft.
7. We have considered the submissions of both the sides. The facts which are not in dispute that the Appellants imported an aircraft from abroad which was cleared to them on 28.10.1991 without payment of duty under the provisions of Rule 58(6) of the Aircraft Rules, 1937 as the aircraft was not to be registered in India and would be removed from India within six months of its entry. As the impugned aircraft was used by them for Air-taxi operation, the Revenue took action for misdeclaration against them separately and demanded payment of Customs duty which was paid by them in two instalments on 11.2.92 and 10.3.92. The import of the Aircraft was complete when it reached the Customs barrier, as held by the Supreme Court in Garden Silk Mills case, supra, and it was cleared for home consumption on 28.10.1991. The Customs duty was not collected as the Appellants had filed a declaration under Rule 58(6)(a) of the Aircraft Rules. The said clearance has to be treated as a clearance for home consumption as held by the Supreme Court in Ajanta Offset and Packaging Ltd., supra, In the said case goods were imported and cleared for disply in Exhibition. The Apex Court observed that the goods were not intended for transit or transhipment when they were imported nor Bill of Entry was filed for warehousing the goods and the Court held that the said Bill of Entry must, therefore, be treated to be for home consumption. Once the goods had already been cleared for home consumption, there cannot be a second Bill of Entry for the same purpose. The Bond was also executed by the Appellants undertaking to pay duty if they failed to produce proof of re-export of the aircraft. The Bond even contained the undertaking that any amount due under the Bond from them may be recovered in the manner laid laid down in Section 142(1) of the Customs Act. We agree with the learned Advocate for the Revenue that the ration of the decision in the case of Sarabhai International Ltd. applies to the facts of the present matter. The fact that the goods were cleared to a Free Trade Zone in the said case does not make any difference. The Sarabhai’s case the goods were cleared for being used in the manufacture of goods in Free Trade Zone for export out of India subject to the condition that the importer shall pay, on demand, an amount equal to the duty leviable on goods as are not proved to have been used in connection with the production or packing of goods (without Zone) for export out of India. As the importer therein did not utilise the entire quantity of imported goods in the manufacture of goods within Free Trade Zone, the Supreme Court held that the importer was liable to pay the amount of duty that would have been leviable on the amount of duty that would have been leviable on the imported goods had it not been cleared into the Free Trade Zone under the Notification.
8. In the present matter the impugned aircraft was cleared free of duty in terms of Rule 58(6) of the Aircraft Rules. Sub-rule (b) of Rule 58(6) provides as under:-
“(b) In the case of an aircraft in respect of which such a declaration has been made and which is not removed from India within six months the duty leviable in respect of it shall be paid to the Customs Collector before the aircraft is again flown.”
As in Sarabhai’s case, the duty was held to be payable in terms of the Notification, the Appellants have to pay duty in terms of Sub-rule (b) of Rule 58(6) of the Aircraft Rules. The Appellants had accordingly paid the duty of customs to the Department. There is no substance in the contention of the Ld. Counsel for the Appellants that Sarabhai’s decision is not applicable as the question in that case before the Apex Court was, in the words of the Court itself, “What is the date that is relevant for the purpose of assessment of the Customs duty payable on the soda ash so cleared to the domestic tariff area.” Mere filing of Bill of Entry subsequently does not alter the legal position. Accordingly the appeal filed by the Appellants is rejected.