UNION OF INDIA Vs. SUNIL INDUSTRIES

JUDGEMENT

(1.) Respondent No. 1 placed an order for 817.48 metric tons of mild steel hot roiled defective sheets with the foreign suppliers. The consignment arrived in Bombay Port sometime in October 1982 and respondent No. 1 presented Bill of Entry for clearance for home consumption on October 11, 1982. The Bill of Entry was duly accepted and import general manifest number was endorsed on the Bill of Entry and the customs duty leviable was calculated. On October 11,1982 in regard to the payment of customs duty there was partial exemption under notification issued by the Central Government. The vessel in which the, consignment was loaded, arrived in Bombay on October 23,1982 and till November 13,1982 discharged part of the cargo. The part of the consignment imported by respondent No. 1 could not be discharged due to operational reasons and the balance cargo of respondent No. 1 left to be discharged was 2280 tons. On December 31,1982 the steamship company sought permission from the Additional Collector of Customs, Bombay to allow the vessel to overcarry 2280 tons of cargo of respondent No. 1 for the vessel's coastal voyage from Bombay to Madras, Vizag, Haldia and Calcutta before being brought to Bombay. The steamship company executed necessary guarantee bond in respect of 2280 tons of imported cargo being overcarried to Madras and other ports. The steamship company sought permission to allow the vessel to proceed to Indian ports. The application was granted by the Assistant Collector by order dated November 5,1982 with the liberty to bring back the cargo with same import general manifest.

(2.) The vessel returned back to Bombay after visiting ports like Madras, Calcutta etc. on December 28,1982. Prior to this date on December 8,1982 the rate of customs duty was enhanced and the customs authorities started claiming the higher rate when the cargo of 2280 tons was to be cleared in December 1982. The customs authorities also insisted on filing of fresh bill of entry and allotting fresh import general manifest. Respondent No. 1 thereupon approached this Court by filing petition under Article 226 of the Constitution of India. The petition was admitted on January 7,1983 and respondent No. 1 was permitted to clear the cargo of 2280 tons on furnishing bank guarantee and by filing fresh bill of entry. It is not in dispute that respondent No. 1 cleared the cargo for home consumption in accordance with the interim order. The petition was allowed by learned single Judge by order dated June 22,1989 relying upon the decision of the Division Bench of this Court Join Sudh Vanaspati Ltd. v . S.R. Patankar,1988 33 ELT 77 The decision of the single Judge is under challenge.

(3.) Shri Devdhar, learned counsel appearing on behalf of the appellants, submitted that in view of the decision of the Supreme Court Bharat Surfactants (Pvt.) Ltd. V/s. Union of India, 1989 43 ELT 189 the customs authorities were justified in calculating enhanced rate of duty after the vessel returned to Bombay in December 1982. The decision undoubtedly supports the contention of Shri Devdhar that the rate of duty to be recovered is one which is prevalent on the date when the cargo is to be cleared for home consumption. In the case before the Supreme Court the vessel had arrived at Bombay on July 23, 1981 and on the bill of entry filed by the importer rotation number, which is equivalent to import general manifest was endorsed on the bill of entry. The vessel was unable to secure berth in the Port of Bombay and was compelled to proceed to Karachi to discharge the cargo pertaining to that port and returned back to Bombay after sometime. In the meanwhile the rate of duty was enhanced and the importer was required to file a fresh bill of entry. The Supreme Court held that the date of entry inwards of the vessel is the date recorded in the customs register and as the vessel had returned after rate of duty was enhanced, the customs authorities were entitled to charge higher rate of duty. Shri Cooper, learned counsel appearing on behalf of the respondents 1 and 2, submitted that the decision of the Supreme Court undoubtedly supports the claim of the appellants, but the decision of the learned single Judge is not required to be disturbed. Shri Cooper submitted that in the present case the vessel could not discharge the cargo in Bombay due to operational difficulties which was beyond the control of the respondent No. 1 and the customs authorities had permitted the vessel on November 5,1982 to visit ports in India and to bring back the cargo left to be discharged and assured that the cargo will be discharged with same number of import general manifest. Shri Cooper rightly submitted that in view of the assurance given by the customs authorities that the same import general manifest can be used. on return of the vessel, the shipping company changed its position and it is therefore not open for the customs authorities to claim that the higher rate of duty will be recovered. We find considerable merit in the submission of the learned counsel. Shri Devdhar could not explain as to why the Assistant Collector of Customs permitted the shipping company to overcarry 2280 tons of imported cargo to Madras, Haldia and Calcutta with the promise that the same could be brought back to Bombay within two months time with the same import general manifest. This promise on the part of the customs authorities disentitled the appellants from demanding higher rate of duty in December 1982. For this reason, we are inclined to uphold the order passed by the learned single Judge, and the appeal must fail.