ORDER
G. Sankaran, Sr. Vice-President
1. This is an appeal against Order No. BCH-5823/82, dated 13-10-1982 passed by the Collector of Customs (Appeals), Bombay. By this order, the Collector (Appeals) upheld the Assistant Collector’s Order dated 30-4-1982 rejecting the claim for refund of basic customs duty (this term is used to denote the customs duty leviable in terms of the First Schedule to the Customs Tariff Act, 1975), levied by the Customs authorities on a consignment of Polynosic Staple Fibre imported by the appellants, on the ground that the vessel by which the goods were imported was granted entry inwards on 1-1-1979 on which date there was no exemption in force in respect of the said goods from the levy of basic Customs duty.
2. The facts of the case, briefly stated, are that the appellants imported a consignment of Polynosic Staple Fibre. Customs Notification No. 25, dated 31-1-1978, as amended by Notification No. 66, dated 18-3-1978 exempted polynosic staple fibre from the levy of basic Customs duty and this exemption was to remain in force up to and including 31-12-1978. It appears that the notification lapsed on 31-12-1978 and the exemption was revived only on 5-1-1979 by Customs Notification No. 6/79. In other words, there was no exemption notification in force from 1-1-1979 to 4-1-1979, exempting polynosic staple fibre from the levy of basic Customs duty. It appears that the vessel by which the consignment was imported was granted entry inwards in terms of Section 31 of the Customs Act on 1-1-1979. It is not quite clear from the record as to when the Bill of Entry for clearance of the goods for home consumption was filed. The Customs authorities levied basic Customs duty at 100% ad valorem under Heading No. 56.01/04 of the First Schedule to the Customs Tariff Act. After clearance of the goods, the appellants filed a claim for refund of the basic Customs duty so charged. The claim was rejected by the Assistant Collector and his order was, as already noted, upheld by the Collector (Appeals).
3. We have heard Shri S.L. Aneja, Advocate, for the appellants and Shri Vineet Kumar, Sr. D.R., for the respondent.
4. A number of authorities have laid down the principle that if goods enter the territorial waters of India at a time when an exemption notification in respect of them is in force, they would not be chargeable to Customs duty on the ground that on the date of presentation of the bill of entry for clearance of the goods the notification in question is no longer in force. It is not necessary to refer to all these decisions. A full Bench of the Bombay High Court has discussed the issue at great length in Apar Pvt. Ltd. and Ors. v. Union of India and Ors., 1985 (22) ELT 644 and reiterated this principle. The learned counsel for the appellants placed reliance on this judgment in support of the claim that the goods in question did not attract the levy of basic Customs duty since they were exempted from such duty on the date they entered the territorial waters of India. It is the contention of the appellants that the ship entered the territorial waters on 18-12-1978 and that it got berthed in the Anchorage late in the evening of 30-12-1978. It is further stated that the steamer agents got the necessary papers from the master of the vessel on 31-12-1978 but the papers could not be filed on that day since it happened to be Sunday, a closed holiday. Accordingly, the agents filed the papers in the Customs House on 1-1-1979. Though there is no direct evidence on record about the dates on which the ship entered the territorial waters and got berthed in the Anchorage, M/s. Indian Maritime Enterprises Pvt. Ltd., agents of the ship, have stated in a certificate dated 22-1-1979 that the ship arrived on 18-12-1978 at Bombay Floating Lights and at the inner Anchorage late in the evening of 30-12-1978. They collected the ship’s papers on the 31st December which was a Sunday and filed final entry on 1-1-1979.
5. The learned Sr. D.R., however, has relied on Order No. 686/84-D dated 15-12-1984, 189/86-D, dated 30-3-1986 and 380-381/86, dated 23-6-1986 on a similar issue and Impex v. Collector of Customs, Bombay, 1987 (29) ELT 433 and contended that since the date of entry inwards of the ship was 1-1-1979 and on that day there was no exemption in force, the subject goods were correctly charged to basic Customs duty and, therefore, this appeal deserved to be dismissed. 6. We have carefully considered the submissions of both sides. The ratio of the Bombay High Court's judgment in the case of Apar Pvt. Ltd. (Supra) is, inter alia, that if certain goods enter the territorial waters of India at a time when a notification exempting such goods wholly from Customs duty is in force, such goods will not be liable to be charged to Customs duty on the ground that on the date of presentation of the Bill of Entry for clearance of the goods for home consumption, the exemption notification is no longer in force and, in its place, a rate of duty is in force. However, we find that there is a later judgment of the Calcutta High Court in Indian Rayon Corporation and Mahalakshmi Fibre Industries Ltd. and others v. Collector of Customs reported in 1987 (13) ECC 83. In this judgment, the Calcutta High Court has considered a number of decisions of different High Courts holding opposite views on the issue, some holding the view that if an exemption notification is in force in respect of certain goods on the date of their entry into the territorial waters of India, the benefit of that exemption will continue to be applicable even if the exemption is no longer in force on the date of presentation of the Bill of Entry for clearance of the goods for home consumption and the others holding that the rate of duty applicable to imported goods should be determined strictly in terms of the provisions of Section 15 of the Customs Act and not with reference to the date of entry of the goods into the territorial waters of India. In the latter view, the benefit of exemption which was in force on the date of entry of the goods into the territorial waters will not be available if the exemption is no longer in force on the date of presentation of the Bill of Entry for clearance of the goods for home consumption. After considering these opposing judgments, including that of the Bombay High Court in the case of Apar Pvt. Ltd. the Calcutta High Court held, inter alia that "even if under an exemption notification any specified goods are not leviable to duty at the time of their entry into the Indian territorial waters, or in other words, when they acquire the character of imported goods, they become so leviable with the withdrawal, etc., of the said notification at any time before the actual clearance of the goods for home consumption". We are inclined to respectfully follow the Calcutta High Court's judgment. In the present case, the date of entry inwards of the vessel by which the goods were imported was 1-1-1979. It is not the appellant's case that the Bill of Entry for clearance of the goods for home consumption was presented after the date of entry inwards of the vessel by which the goods were imported. In terms of Section 15 of the Customs Act, therefore, the date of entry inwards of the vessel, namely 1-1-1979, was the relevant date for determining the applicable rate of duty. On 1-1-1979, the pre-existing Exemption Notification No. 25, dated 31-1-1978 was not in force, it having lapsed on 31-12-1978. In the circumstances, we hold that the impugned order is correct and we uphold the same. Consequently, we dismiss this appeal.