PETITIONER: GANGADHAR NARSINGRAS AGARWAL Vs. RESPONDENT: P. S. THRIVIKRAMAN & ANR. DATE OF JUDGMENT16/03/1972 BENCH: RAY, A.N. BENCH: RAY, A.N. SIKRI, S.M. (CJ) GROVER, A.N. PALEKAR, D.G. BEG, M. HAMEEDULLAH CITATION: 1973 AIR 350 1972 SCR (3) 874 1972 SCC (3) 475 ACT: Tariff Act 1934--S. 44--Whether notification under S. 44 is applicable to the fact find circumstances of the case. HEADNOTE: The appellant on 26th July 1966 filed, shipping bill in triplicate before the Joint Chief Controller of Imports and Exports for the porpose of obtaining export licences in respect of 10,160. metric tonnes of iron ore. On 28 July 1966 export licence was granted to the appellant. On 30 July 1966 the agents of the vessel made an application to the Asstt. Collector of Customs, for the grant of entry outward to the said vessel to load iron ore, which was granted- on the same day with permission to ship cargo on board the said vessel. On 1 August, the appellant presented to the Customs authority under section 50 of the Customs Act, 1962., shipping bills in triplicate and the Customs authority made several endorsements on the shipping bill on the same day. On, the2 August 1966, further endorsements-on the shipping bill was made by the Customs authority indicating that the shipment was inspected, checked and payment was made in full. On 2 August 1966, a notification was issued by the Ministry of Commerce imposing a duty at the rate of Rs. 10 per metric tonne on lumpy iron ore. and on 28 January 1967, the Customs authority issued a notice to the appellant notifying that goods actually shipped by the appellant were subject to export duty and the appellant was liable to pay Rs. 98044 and the appellant was called upon to show cause as to why the amount should not be recovered from him. The appellant contended that the shipping bill was presented to the., Customs authority and the entry outward to-the ship was given prior to 2 August, 1966 when the notification came into force and so, the notification under S. 4A of the Tariff Act 1934 was not applicable to the consignment in question. The Customs authorities held that the appellant was liable to pay the export duty. The appellant impeached the order before the Judicial Commissioner Who also upheld the order of the Customs authorities. The only question which arose for decision before this Court was whether the shipment and export of iron ore by the appellant became liable to the said duty introduced on 2 August 1966. The appellant contended that the shipping bill was presented on 1 August, 1966 and the order of the Customs authorities for entry outwards to the vessel was also given on 1 August 1966 and so, the export in the present case was not liable to payment of duty imposed on 2 August 1966. The Customs authorities however contended that the vessel arrived at Marmagoa barhour on 3 August 1966 and the vessel commenced loading on 3 August, 1966, and therefore, under s. 16(i) of the Customs Act 1962, the shipping 875 bill which had been presented before the date of entry outwards "shall be, deemed to be presented at the earliest on 3 August 1966 when the vessel in question arrived. Allowing the appeal, HELD : In the present case, the Customs authorities acted without jurisdiction in imposing duty on the export by holding that the date of entry outwards of the vessel was the date when the vessel, arrived. Section 38 of the Sea Customs Act 1878 was the Counter-part of Sec. 16 of the Customs Act, 1962. Section 38 had two provisos. Under the first proviso to that old section where shipment was permitted without a shipping bill, the rate of duty was to be the rate in force at the time when the shipment of goods commenced. Under the second proviso, the shipping bill must be deemed to have been delivered on the date on which that vessel arrived or entry outwards was given which ever was later. Under the provisos of S. 38 of the old Act, the Customs authorities had power to apply the rate in force on the date of the arrival of the vessel. Under S. 16 of the 1962 Act, it is not permissible to do so. The statute does not contain such a provision. S. 16 of the 1962 Act speaks of the fictional date only in relation to the order of date of entry outwards of the vessel. In, the present case, the order of entry outwards of the vessel was made prior to 2 August, 1966. Therefore, the Customs authorities. acted without jurisdiction in imposing the duty in question. 1879 G-880 C] JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2137 of
1968.
Appeal from the judgment and order dated April 5, 1968 of
the Judicial Commissioner’s Court , G a, Daman and Diu in
Writ Petition No. 9 of’1967.
Soli Sorabji, P. C. Bhartari, B. D. Bharucha, J. B.
Dadachanj’i and Ravinder Narain, for the appellant.
Jagadish Swarup, Solicitor-General of India, Govind Das and
B. D. Sharma, for the respondents.
The Judgment of the Court was delivered by
Raj, J. This is an appeal by certificate from the, judgment
dated 5 April, 1968 of the Court of the Judicial
Commissioner, Goa, Daman and Diu at Panaji.
The appellant challenged the levy of export duty of Rs.
98044 on 9804-40 metric tonnes of iron ore shipped on S.S.
‘Ardenode’ on 3 August, 1966 at the rate of Rs. 10 per
metric tonne.
The appellant on 26 July, 1966 filed shipping bill in
triplicate before the Joint Chief Controller of Imports and
Exports Panaji, Goa for the purpose of obtaining export
licence in respect of 10,160 metric tonnes of iron ore. On
28 July, 1966 export licence was granted to the appellant.
On 30 July, 1966 M/s.
971
appeal to voters that voting for Congress would amount to a
sin.. Reading the evidence in print one gets the impression
that each witness came prepared to play the part assigned to
him.
Exhibit R-1/8 dated 26 August, 1966 is a notice for a
meeting of the Congress Committee at Singoli. Exhibit R-
1/50 dated 26 August, 1966 is the draft resolution of that
committee meeting., It is written by the respondent.
Exhibit R-1/5 dated 26 August, 1966 contains the minutes of
the meeting at Singoli. Exhibit R-1/6 contains the minutes
of the meeting of the Congress committee at Singoli on 2
October, 1966. These documents show that Paras Ram, Bhanwar
Lai and Ram Chandra Sharma were connected with the Congress
Organisation. The respondent was also associated with the
Congress committee. The minutes showed that Ratan Lai
Petlia was a member of the committee. The respondent’s
witnesses stated that Ratan Lai Petlia was a worker of the
Jan Sangh. The reason for saying so was that Ratan Lai
Petlia was cited by the appellant as a witness. The records
show that Ratan Lai Petlia was associated with the Congress
Organisation. Patan Lai Petlia R. 1 W. 10 said that he was
associated with the Congress Organisation at Singoli. He
denied that Swamiji of Bhanpura made any appeal to the
voters that voting for Congress would amount to the sin of
killing cow. The respondent’s witnesses wanted to condemn
Ratan Lai Petlia by saying that Ratan Lai Petlia made
arrangements for Jan Sangh. That is another illustration of
the partisan character of the respondent’s witnesses.
Nathu Lal P.W. 19 was believed by the High Court. It tran-
spired in the evidence that Nathu Lai became liable to pay
Rs. 372.06 to Krishi Sewa Sehkari Samiti and also to account
for 73 bags of super-phosphate. Nathu Lai signed the
document R-1/15. At the time of giving evidence he said it
was Chhote Lai who promised to pay and account for the
phosphate. He did not rest content with that position. He
said that he signed the document as a member. The High
Court did not consider these justified criticisms of the
evidence adduced on behalf of th respondent,
Manna Lai P.W. 20 gave evidence not only about the speech of
Swamiji of Bhanpura at Singoli on 15 February, 1967 but also
of the speech of the appellant at Singoli on 29 January,
1967. As to the appellant’s speech Manna Lai said that the
appellant talked of ‘cow killing Congress 10 times’ and that
is how he remembered the speech. He narrated the speech of
the appellant like other witnesses in the same language.
Manna Lai said that Swamiji of Bhanpura spoke about voting
for dharma and cow. Manna Lal came to court from Singoli
along with Ram Chandra Sharma.
The overwhelming impression produced by the witnesses on
behalf of the respondent is that they were all prepared on
the same
876
Hiralal & Co. agents of the vessel S. S. ‘Ardenode’ made an
application to the Assistant Collector of Customs, Marmagoa for
the grant of entry outwards to the said vessel to load iron ore.
On 30 July, 1966 the Assistant Collector of Customs, Marmagoa
made an order granting entry outwards to the said vessel S.S.
Ardenode and also gave permission to ship cargo on board the said
vessel.
On 1 August, 1966 the appellant presented to the Customs
authorities under section 50 of the Customs Act, 1962, (herein-
after called the Act), shipping bills in triplicate, dated 26
July, 1966. The appellant in accordance with the provisions of
section 50 of the Act at the foot of the shipping bill subscribed
to a declaration as to the truth of the contents of the shipping
bills. On 1 August, 1966 the Customs authorities made these
entries on the shipping- bill ‘rotation No. 730 Sd/ 1 August,
1966 ‘Let export after examination if necessary Sd/- 1 August,
1966’ and. ‘E.F.No. 3/1/8/1966’. The abbreviation ‘E.F.’ means
Export Fee. On 2 August 1966 the Customs authorities made
further endorsements on the shipping bill. These endorsements
were PI as usual and checked des’; ‘Inspected the lot-2-barges-
checlkeci des’; and Pd in full’.
On 2 August, 1966 there was a notification issued, by the
Ministry of Commerce in exercise of powers conferred by section
4-A of the Indian Tariff Act, 1934 amending the second schedule
to the Tariff Act. The relevant item in the said schedule
introduced by way amendment is 28 and the name of the article is
lumpy iron ore and the rate of duty is Rs. 10 per tonne.
The S.S. Ardenode arrived at Marmagoa at 23.20 hours on 2 August,
1966. The vessel arrived at Marmagoa Inner Harbour on (3)
August, 1966 at 07.50 hour-,. The vessel commenced loading the
cargo on 3 August, 1966.
The Customs authorities on 28 January, 1967 issued a notice to
the appellant notifying that the goods actually shipped by the
appellant were subject to export duty at the rate of Rs. 10 Per
metric tonne and the custom duty amounting to Rs. 98044 which was
not levied in respect of the consignment was due from the
appellant and the appellant was called upon in accordance with
section 28 of the Act as to why the amount should not be recover-
ed from the appellant.
The appellant contended before the Customs authorities that the
shipping bill was presented to the Customs authorities and the
entry outwards to the ship S.S. Ardenode was given prior to 2
August, 1966 when no duty was payable in respect of the export of
the goods in question. The appellant, therefore, contended
877
the notification under section 4-A of the Tariff Art 1934 was not
applicable to the consignment and no duty was payable in respect
of the export of the having regard to the provisions of section
16 of the Customs Act. It may also be stated that the appellant
impeached the vires of the notification.
The Customs authorities on 19 April, 1967 held that by virtue of
the provisions of section 16(1) of the Act the shipping bill
shall be deemed to have been presented at the earliest on 3
August, 1966 when the vessel in question arrived. The export
duty was levied with effect from 2 August, 1966. The Customs
authorities therefore held that the appellant was liable to pay
the export duty.
The appellant impeached the order of the Customs authorities
under Article 226 of the Constitution in the Court of the
Judicial Commissioner, Goa, Daman and Diu, Panaji. The Judicial
Commissioner upheld the order of the Customs authorities.
The entire controversy in the present appeal is whether shipment
and export of iron ore by the appellant became liable to the said
duty introduced on 2 August, 1966.
The relevant provisions for the purpose of the present appeal are
to be found in section 16 which deals with date for determination
of rate of duty and tariff valuation of export goods and sections
39, 50 and 51 which deal with loading of export goods on vessel
and clearance of goods for exportation.
Section 16 is as follows :-
“16(1). The rate of duty and tariff
valuation, if any, applicable to any export
goods, shall be the rate and valuation in
force-
(a) in the case of goods entered for export
under section 50, on the date on which a
shipping bill or a bill of export in respect
of such goods is presented under that section;
(b) in the case of any other goods, on the
date of payment of duty;
Provided that if the shipping bill has been
presented before the date of entry outwards of
the vessel by which the goods are to be
exported, the shipping bill shall be deemed to
have been presented on the date of such entry
outwords.
(2) The provisions of this section shall not
apply to baggage and goods exported by post.
L1061supCI/27
878
The appellant contended that the shipping bill was presented
on 1 August, 1966 and the order of the Customs authorities
for entry outwards to the vessel was also given on 1 August,
1966, and, therefore, the export in the present case was not
liable to payment of duty imposed on 2 August, 1966. The
Customs authorities on the other hand contended that the
vessel arrived at Marmagoa on 3 August, 1966 and the vessel
commenced loading on 3 August, 1966, and, therefore, the
shipping bill which had been presented before the date of
entry outwards ‘shall be deemed to be presented at the
earliest on 3 August, 1966 when the vessel in question
arrived’.
The shipping bill under the Customs Act means a shipping
bill referred to in section 50 of the Act. Section 50 is as
follows:
“50(1). The exporter of any goods shall make
entry thereof by presenting to the proper
officer in the case of goods to be exported in
a vessel or aircraft, a shipping bill, and in
the case of goods to be exported by land, a
bill of export in the prescribed form.
(2) The exporter of any goods, while
presenting a shipping bill or bill of export,
shall at the foot thereof make and subscribe
to a declaration as to the truth of its
contents”.
In the present case, it is common case that the shipping
bill was presented to the Customs authorities on 1 August,
1966 and the Customs authorities made several endorsements
on the shipping bill on the same day. These endorsements
permitted export after examination, if necessary. The
further endorsements on the shipping bill on 2 August, 1966
indicated that the shipment was inspected, checked and
payment in full was made.
Section 51 of the Act is as follows :-
“Where the proper officer is satisfied that
any goods entered for export are not
prohibited goods and the exporter has paid the
duty, if any, assessed thereon and any charges
payable under this Act in respect of the same,
the proper officer may make an order
permitting clearance and loading of goods for
exportation”.
In the present case, the Customs authorities made
endorsement on the shipping bill on 1 August, 1966
permitting export after examination, if necessary. The
shipping bill described the goods as ‘free goods’. Export
licence was also granted on that shipping bill. Sections 50
and 51 of the Act deal with entry of goods for exportation
and clearance of goods for exportation. The word
880
where the shipping bill was in anticipation of the arrival
of any vessel of before an order Was given for entry
outwards of the vessel the shipping bill must be deemed to
have been delivered on the date on which that vessel arrived
or entry outwards was given whichever was later. Under the
provisions of section 38 of the 1878 Act the Customs
authorities had power to apply the rate in force on the date
of the arrival of the vessel. Under section 16 of the 1962
Act it is not permissible to do so. The statute does not
contain such a provision. Section 16 of the 1962 Act speaks
of the fictional date only in relation to the order of date
of entry outwards of the vessel. In the present case, the
order of entry outwards of the vessel was made prior to 2
August, 1966. Therefore, the Customs authorities, in the
impugned order acted without jurisdiction in imposing duty
on the export by holding that the date of entry outwards of
the vessel was the date “when the vessel arrived”.
For the foregoing reasons the appellant is entitled to an
order cancelling the notice dated 28 January, 1967 by which
the Customs authorities demand duty from the appellant. The
order of the Judicial Commissioner is set aside. There will
be a writ setting aside the notice dated 28 January, 1967
and an order for bearing the respondents from taking any
steps or proceedings pursuant to the notice dated 28
January, 1967. There will also be an order quashing the
order of the Assistant Collector of Customs dated 19 April,
1967 which gave effect to the notice and held the appellant
liable to pay the export duty. The appeal Is allowed.
In the facts and circumstances of the case each party will
pay and bear their owm costs.
S.C. Appeal allowed.
881