M. Santhanam, Member (J)

1. This is an appeal against the order of the Collector of Customs, Calcutta dated 26-5-1986.

2. The facts of the case are briefly as follows:-

The appellants imported three consignments consisting of 532 Coils of Tin Imported Black Plate. The consignments were imported through the vessels s.s., Madhya Pradesh, s.s. Jalarashmi and s.s. Flaur. The goods were assessed free of duty in terms of Notification No. 243-Cus., dated 13-11-1981 as amended by Notification No. 215-Cus., dated 29-9-1982 and Notification 126-Cus., dated 13-5-1983. It is common case that the Three bills of entry were presented on 28-12-1983, 19-12-1983 and. 29-12-1983 respectively on a prior entry basis. They were duly classified and released on 28-12-1983, 19-12-1983 and 29-12-1983 free of duty in terms of the Notification aforesaid. But the vessels entered inwards finally on 5-1-1984, 10-1-1984 and 24-1-1984 respectively. It must be mentioned that the three vessels entered territorial waters and arrived in Bombay on 10-11-1983, 19-11-1983 and 27-11-1983 respectively. From Bombay they touched other ports before reaching Calcutta. The vessel Jalarashmi touched Vizag and Madras, the vessel s.s. Flaur touched Mangalore, Madras and Vizag and the Vessel Madhya Pradesh touched Madras before arriving at Calcutta. The goods covered by the bills of entry were cleared on 10-1-1984, 12-1-1984 11-1-1984 and 24-1-1984 respectively. In terms of Sections 15 and 46 of the Customs Act, 1962 the relevant date for determination of rate of duty in the case of goods entered for home consumption, is the date on which the bill of entry is presented. The proviso to that Section specifies that if a bill of entry had been presented before the date of entry inwards of the vessel by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards.

3. According to the department the bills of entry were presented on a prior entry basis and as all the vessels entered inwards finally on later dates, the bills of entry should be deemed to have been presented on 5-1-1984, 10-1-1984 and 24-1-1984 respectively. Notification 243/81-Cus., as amended was valid only upto 31-12-1983. So the subject goods were not entitled to exemption on the date of entry inwards.

4. The Assistant Collector of Customs, Calcutta issued two notices dated 27-12-1984 and 28-12-1984 requesting the appellants to pay the short levy amounting to Rs. 50,38,766.50 and Rs. 1,12,69,455.70. on 1-2-1985, the appellants wrote to the Collector of Customs, Calcutta stating that the bills of entry were duly submitted for home consumption before the expiry of the valid period of exemption notification. They also submitted that the two demands of huge sums would affect their business. Without prejudice to their contentions they submitted that the notices were ultra-vires of Section 28 of the Customs Act.

5. On 22-7-1985, the Deputy Collector of Customs, Calcutta referring to the above letter of the appellants stated that the benefit of the exemption was available upto 31-12-1983 and that it was not extended further. The vessels entered inwards finally on 5-1-1984, 10-1-1984 and 24-1-1984 respectively and the consignments were out passed on subsequent dates. The Deputy Collector has pointed out that the subject goods were not entitled to exemption from duty under the notification. The letter reads that it was within the knowledge of the appellants, but that they did not submit the bills of entry to the Customs House for re-assessment at the appropriate rates of duty effective on the date of entry inwards of the subject vessels. It reads as follows:-

"Thus it appears that you have suppressed the facts regarding the entry of the vessels and clearance of the goods after expiry of the notification and as a result the short levy has occurred. Accordingly, under the proviso to Section 28(1) of the Customs Act, 1962, notices have been issued in time and not ultra-v