1. Export of goods — Dispute over applicable duty rate — Determination of date of presentation of shipping bills under Section 16, Customs Act. (Para 1 , 2 )
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1999 Supreme(SC) 1197
SUPREME COURT OF INDIA
B.N.Kirpal : N.Santosh Hegde
Jeevanlal And Company
Versus
Collector Of Customs, Bombay
Case No. : 10219-25 of 1983
Date of Decision : 10/12/99
Under Section 16(1) of the Customs Act, if shipping bills are presented before the date of entry outwards, the date of entry outwards is deemed the date of presentation for determining the applicable export duty rate; loading goods on barges is irrelevant to this determination.
Headnote:(A) Customs Act - Section 16 - Rate of duty on export goods - Determination of applicable rate - Proviso to Section 16(1) - When shipping bills are presented before the date of entry outwards of the vessel, the shipping bills are deemed to have been presented on the date of such entry outwards - The rate of duty effective on the date of entry outwards is the one to be levied - Loading of goods on barges is irrelevant for determining the date of presentation for duty purposes. (Paras 3, 4)
Facts of the case:
The appellant exported goods in two lots. For the first lot, the duty rate was increased from Rs. 1100 to Rs. 1300 per quintal effective from a specific date. The shipping bills were presented and goods were loaded on barges prior to this date, but the application for entry outwards and the subsequent order were made after the rate increase. For the second lot, the duty rate was reduced on a specific date; the appellant claimed that the entry outwards occurred after this reduction to avail the lower rate, but provided no documentary evidence to substantiate the date of entry outwards.
Findings of Court:
For the first lot, the court found that since the application for entry outwards was filed after the rate increase, the proviso to Section 16(1) applies, making the higher rate of duty applicable. For the second lot, in the absence of material on record to prove the date of entry outwards, the court declined to differ from the decision of the Tribunal.
Issues: Whether the date of loading goods on barges or the date of presentation of shipping bills is relevant for determining the duty rate when the entry outwards occurs later, and whether the proviso to Section 16(1) mandates the use of the rate prevalent on the date of entry outwards.
Ratio Decidendi: Under Section 16(1) of the Customs Act, if a shipping bill is presented before the date of entry outwards of the vessel by which the goods are to be exported, the shipping bill is deemed to have been presented on the date of such entry outwards. Therefore, the rate of duty applicable is the one prevalent on the date of entry outwards, and the date of loading goods on barges has no relevance. (Paras 3, 4)
Result: Appeals are dismissed with costs.
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2. Whether the date of loading goods on barges or the date of shipping bill presentation determines the applicable duty rate versus the date of entry outwards. (Para 2 )
3. The date of entry outwards is the determining factor for the duty rate when shipping bills are presented prior to such entry, rendering barge loading irrelevant. (Para 3 , 4 , 6 )
4. Under the proviso to Section 16(1) of the Customs Act, if a shipping bill is presented before the date of entry outwards, it is deemed presented on the date of entry outwards. (Para 3 , 4 )
5. Appeals dismissed with costs. (Para 7 )
6. When is a shipping bill deemed to have been presented for the purpose of determining the applicable rate of export duty?
According to the proviso to Section 16(1) of the Customs Act, if the shipping bill is presented before the date of entry outwards of the vessel by which the goods are to be exported, the shipping bill is deemed to have been presented on the date of such entry outwards. (Para 3 , 4 )
7. Does the date of loading goods onto barges affect the determination of the applicable duty rate under Section 16 of the Customs Act?
No, the date of loading cargo on barges is irrelevant to the question of the applicable rate of duty; the relevant date is the date of entry outwards of the vessel. (Para 4 )
8. What is the evidentiary requirement for claiming a specific date of entry outwards to benefit from a lower duty rate?
A claim regarding the date of entry outwards must be substantiated by material on record or factual findings by the relevant authorities; in the absence of such evidence, the contention cannot be accepted. (Para 6 )
(1) IN these cases we are concerned with the export of goods by the appellant covered by seven shipping bills. These seven shipping bills resulted in export of cargo in two lots. One lot consisted of four shipping bills and the other of three shipping bills.
(2) AS per the finding of fact recorded by the Tribunal in regard to one shipping bill the rate of duty was Rs. 1100 per quintal in respect of the item sought to be exported. This rate was altered and was enhanced to Rs 1300 per quintal with effect from 13/09/1977. The case of the appellant was that the shipping bills had been presented prior to 13/09/1977 and, therefore, the rate of duty prevalent, namely, Rs.1100 per quintal should be levied. It was also contended on behalf of the appellant that the goods had been first loaded at flash barges on 3/09/1977 and that this is the date which should be considered as the date of loading the goods as contemplated by Section 39 of the Customs Act.
(3) THE Tribunal found as a fact that application for entry outwards was made on 19/09/1977 and the order granting entry outwards was made on 6/10/1977. Considering the provision of Section 16 of the Customs Act the Tribunal came to the conclusion that when the shipping bill is submitted on a date prior to the date of entry outwards then as per the proviso to the said Section 16 the date of entry outwards is deemed to be the date of shipping bill. It is the rate of duty which is effective on that date which has to be levied on the cargo which was exported. Applying the rate of Rs 1300 per quintal, which was the rate which was effective after 13/09/1977 that was charged from the appellant. Section 16 reads 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 outwards."
(4) IN Principal Appraiser (Exports), Collectorate of Customs and Central Excise v. Esajee Tayabally Kapasi Section 16 was interpreted to mean that the rate applicable is the one prevalent on the day when entry outwards of the vessel which actually carried the goods for effecting export was obtained, when the shipping bills have been presented before that day. It is clear from this that sending the cargo on barges was of no relevance with regard to the question of the rate of duty applicable. What was relevant was the date of entry outwards which was subsequent to the date of the shipping bill. The proviso to Section 16 (1) was clearly applicable and therefore the Tribunal was right in coming to the conclusion that as application for entry outwards was filed, after 13/09/1977, therefore, it is the higher rate of Rs 1300 per quintal which had to be charged and the date of shipping bill or loading the goods on the barges was irrelevant.
(5) WITH regard to the lot of three shipping bills the duty was reduced from Rs 1300 to Rs 700 per quintal as per notification dated 17/10/1977. The shipping bills were presented before 17-10-1977. In the memorandum of appeal filed before the Appellate Collector of Customs it was stated that the entry outwards was granted on 29/10/1977 and the shipping bills must therefore be deemed to have been presented as on that day.
(6) THE Collector of Customs has not found as a fact that application for entry outwards in respect of the ship Marjem, on which the consignment went, was presented on 29/10/1977. Against the order of the Collector of Customs, Bombay, revision petition was filed before the Gove
