1966 Supreme(SC) 56

SUPREME COURT OF INDIA
K. SUBBA RAO, M. HIDAYATULLAH AND R.S. BACHAWAT, JJ.
The Collector of Customs, Calcutta and another, Appellants
Versus
G. Dass and Co. and others, Respondents.
Civil Appeals Nos. 664 and 665 of 1963.
Advocates appeared
Mr. D. R. Prem, Senior Advocate, (M/s. R. N. Sachthey and B. R. G. K. Achar, Advocates, with him), for Appellants; Mr. N. C. Chatterjee, Senior Advocate, (Mr. D. N. Mukherjee, Advocate, with him), for Respondent No. 1.
In C. As. Nos. 664 and 665 of 1963.

The rate of duty applicable to imported goods is the rate in force on the date of delivery of the bill of entry to the Customs Collector under S. 37 of the Sea Customs Act, 1878.

Headnote:

SEA CUSTOMS ACT - IMPORT DUTY - RATE OF DUTY - DETERMINATION - BILL OF ENTRY PRESENTED BEFORE LANDING OF GOODS - EXPLANATION TO SECTION 37 - CONSTRUCTION - DATE OF DELIVERY OF BILL OF ENTRY - SECTION 86 - INTERPRETATION - AMENDMENT OF SECTIONS 37 AND 86 - EFFECT.

Fact of the Case:

The contesting respondents imported two consignments of betelnuts into the Port of Calcutta. They presented the bills of entry for the consignments to the proper officer of Customs before the landing of the goods. The Customs Officer retained the bills of entry after noting on them the words "before entry". The vessel obtained an order for inward entry. Before April 30, the rate of import duty on betelnuts was one rupee per lb.; on April 30, the rate was reduced to 12 annas per lb. After April 30, the vessel discharged her cargo and landed the two consignments of betelnuts. On May 7, the Sea Customs (Amendment) Act, 1955 (Act XXI of 1955) was passed amending Ss. 37, 86 and other Sections of the parent Act. The contesting respondents paid duty at the rate of one rupee per lb. On clearing the goods, they claimed refund of part of the money paid alleging that they were liable to pay duty at the rate of 12 annas per lb. only. Their applications for refund were rejected by the Assistant Collector of Customs. Their appeals to the Collector of Customs and revision petitions to the Ministry of Finance were also dismissed. Thereupon, they filed writ petitions before the Calcutta High Court asking for the issue of appropriate writs directing the refund of the excess duty paid.

Finding of the Court:

The court held that the rate of duty applicable to the goods must be determined by reference to the Sea Customs Act (VIII of 1878), as it stood before its amendment by Act XXI of 1955. The court construed the unamended Ss. 37 and 86 and held that the date of delivery of the bill of entry to the Customs Collector within the meaning of S. 37 was the date of landing of the goods. The court further held that the condition in the bill of entry providing that for the purposes of S. 37 it would be deemed to be delivered on the date on which the order for inward entry would be passed could not override the provisions of Ss. 37 and 86. The court also held that the rate of duty leviable on the imported goods must be determined with reference to Ss. 37 and 86 and not by reference to condition No. 2 of the bill of entry.

Issues: 1. Whether the rate of duty applicable to the goods should be determined by reference to the Sea Customs Act, 1878, as it stood before its amendment by Act XXI of 1955, or by the amended Act. 2. Whether the date of delivery of the bill of entry to the Customs Collector within the meaning of S. 37 was the date of landing of the goods. 3. Whether the condition in the bill of entry providing that for the purposes of S. 37 it would be deemed to be delivered on the date on which the order for inward entry would be passed could override the provisions of Ss. 37 and 86.

Ratio Decidendi: 1. The court held that the rate of duty applicable to the goods must be determined by reference to the Sea Customs Act (VIII of 1878), as it stood before its amendment by Act XXI of 1955, because the case was argued in the Courts below and before the Supreme Court on that footing. 2. The court held that the date of delivery of the bill of entry to the Customs Collector within the meaning of S. 37 was the date of landing of the goods because S. 86 permitted the delivery of a bill of entry to the Customs Collector by the owner of the goods "on the landing thereof from the importing ship" and the Explanation to S. 37 provided that "a bill of entry shall, for the purposed of this Section, be deemed to be delivered when it is first presented to the proper officer of Customs". The court held that the Explanation created a fiction that the presentation to the proper office of Customs would be deemed to be delivery to the Customs Collector; but the fiction went no further. 3. The court held that the condition in the bill of entry providing that for the purposes of S. 37 it would be deemed to be delivered on the date on which the order for inward entry would be passed could not override the provisions of Ss. 37 and 86 because under those Sections, no date earlier than the date of the landing of the goods could be treated as the date of delivery of the bill of entry to the Customs Collector.

Final Decision: The court dismissed the appeals and held that the contesting respondents were liable to pay duty at the rate in force on or after April 30, 1955, i.e., at the rate of 12 annas per lb. only.