SIGANPORIA BROS Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners are a partnership Firm registered under the Indian Partnership Act, 1932 and carry on business as ship Chandlers. The petitioners import various goods and articles of consumption for the purpose of re-exporting rhe same as ship stores. The petitioners do not require any import licence in accordance with provisions of Import (Control) Order, 1955 as the petitioners supply the goods imported as stores to vessels. On such import, the petitioners store the goods in the warehouse after filing the bill of entry for warehousing. Chapter IX of the Customs Act, 1962 (hereafter referred to as the "act") deals with the topic of warehousing and section 59, inter-dia, provides that the importer of any dutiable goods which have been entered for warehousing and assessed to duty under sections 17 and 18 shall execute a bond to observe all the provisions of the Act and rules and regulations in respect of such goods. Section 12 of the Act is a charging section and prescribes that duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force, on goods imported in to India. Section 85 of the Act reads as follows:

(2.) SECTION 59 of the Act, inte-alia, provides that the bond to be executed by the importer of the dutiable goods which have entered for warehousing shall provide for binding the importer to pay all duties, rent and charges claimable on account of such goods under the Act. Section 60 of the Act confers power upon the proper offcer to make an order permititing the deposit of the goods in a warehouse without payment of duty on compliance with the provision of section 59 of the Act. Section 61, prior to its amendment in year 1983, read as follows:

(3.) THE petitioners claim that in the business of Ship Chandlers, it is necessary to stock all types of goods in origin which are likely to be demanded by the ships touching the port of Bombay. The petitioner claim that the petitioner stocked over 500 items taking into consideration the diverse demands made by the ships whiach touch the Port of Bombay. The petitioner that it is impossible to exactly estimate the future demands because there are nunmber of variable factors, such as, numbers of ships calling at the port, the congestion in the port, the number of crew on the ships and the intensity of the competition from otherports. The petitioner claim that the provisions of section 85 of Act is departure from the normal rule in respect of warehousing of imported goods as set out under section 59, 60 and 61 of the Act. The petitioners claimed that in respect of imported goods covered under section 85 of the Act, it is not permissible to levy any amount of interest under sub-section (2) of section 61. The petitioners imported consignment of Cheddar Cheese and Cream Cheese Spread in January1983 and on import, the goods were bonded in the warehouse on January 20, 1983 after the petitioner filed bill of entry for warehousing. On January 20,1983, the Customs Officer passed order for warehouseing the consignment and the intial period fixed under section 61 was six months and the period expired on July 19, 1983. On June 18,1983 the petitioners had applied for extention of bond period by further period of six months. On July 30, 1983, the bond period was extended by the Customs Officer subject to payment of interest as prescribed under section 61 of the Act. The petitioners sought further extention without payment if interest but that demand having been turned down, the petition was filed on September 13,1983 under Article 226 of the Constitution of India to challenge action of the Offer in granting extention only on a condition of payment of interest. During the pendency of the petition, the provisions of section 61 of the Act were further amended by Customs (Amendment) Act, 1991 with effect from December 23, 1991. The petitioners there after sought amendment of the petition to challenge the amended provisions. The amended provisions varies the rate of interest from 12% to not below then 20% and not exceeding 30% to be fixed by the Board. The amended provision also adds a povision which reads as follows: