MADHUSUDAN MILLS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners are engaged inter alia in the manufacture of textiles. They have for the last several years been importing a product known as polynosic staple fibre. The said fibre is used in the manufacture of cloth. The Central Government has from time to time issued notifications under Section 25 of the Customs Act, 1962 exempting the said fibre from the payment of the whole of the import duty.

(2.) It appears that a certain consignment of the said fibre was imported by the petitioners and was being brought by a vessel and the vessel entered the territorial waters of India on 19th December, 1978. There is no dispute about it. The steamer, however, entered inwards on 1st January, 1979. It is the contention of the respondents that the notification exempting payment of the duty was in force upto 31st December 1978 only. Since the steamer entered inwards on the 1st of January, 1979, the respondents thought that the petitioners were not entitled to the benefit of the notification exempting payment of the excise duty. Since the respondents would not agree that the import had taken place the moment the consignment had entered the territorial waters of India, the petitioners had no choice but to file the present petition.

(3.) It is not necessary for me to go into details as this case is directly covered by a Division Bench Judgment of our High Court being the case of Apar Private Ltd. v. Union of India, reported in 1985 (22) Excise Law Times page 644 and the relevant portion is at paragraph 58 and it is as follows :- "If the goods are wholly exempt from duty as against being partially exempt from such duty, when the goods enter the territorial waters, they cannot be subjected to duty even if the exemption notification is withdrawn or modified before the bill of entry is presented or the goods are cleared for home consumption, as the case may be." There is no dispute that the said fibres were wholly exempt from payment of excise duty and, therefore, if on the date, the ship carrying the said fabrics entered the territorial waters of India, the said exemption notification was in force, the petitioners must necessarily get the benefit of the said exemption notification.