Relevant date for determination of rate of customs duty.

PJ/Case law/2014-15/2215

Case:-GREAT EATERN SHIPPING CO. LTD. Vs COMMR. OF CUS. (IMPORT), MUMBAI

Citation:-2014(304)E.L.T. 734 (Tri.-Mumbai)

Brief facts:- The appeal and stay petition are directed against Order-in-Appeal No. 239/MCH/AC/Gr.I/2012, DATED 9-4-2012 passed by Commissioner of customs (appeals), Mumbai. Vide the impugned order; the learned lower appellate authority has upheld the demand of differential duty of Rs 30, 62,808/- against the appellant, M/s. The Great Eastern Shipping Co. Ltd. by treating the relevant date for determination of duty as 1-3-2001. Aggrieved of the same, the appellant is before Tribunal.

Appellant’s contention:- The learned counsel for the appellant submits that MV Gretke Oldenroff carrying imported goods, namely, Canadian Whole Desi Chick Peas (pulses) arrived in Mumbai port at 2300 hrs on 28-2-2011. However ,as per the public notice 20/2001 issued by the commissioner of customs( import), Mumbai “no entry inwards to the vessels shall be permitted on 28-2-2001 at 2300 hrs,no entry inwards was granted to the appellant. In as much as no entry inward was granted to the appellant could not unload the goods. On 1-3-2001, the rate of import of duty on the imported goods went up to from 0% to 5% ad valorem and consequently the customs have demanded the duty @ 5% ad valorem. If inwards entry had been granted on 28-2-2001 itself, the appellant would have been eligible to avail nil rate of duty on the imported goods and therefore, since the entry inwards was not granted to the public notice and for the reasons beyond the control of the appellant, the appellant should not be saddled with the enhanced duty liability. In the present case also the vessel had arrived at 2300 hrs on 28-2-2001. The entry inwards was not granted because of the public notice which was beyond the control of the appellant and therefore, following the precedent decisions, the appellant should be given the benefit of duty concession available on 28-2-2001. The learned counsel also submits that in this case the IGM has been filed in advance and the bill of entry had been assessed on filling of the IGM. Reliance was also placed on the decision of the Tribunal in the case of Thomas Baker (Chemicals) Pvt. Ltd. Vs CC, Kandra- 2002 (150) E.L.T. 1041 (Tri.-Mumbai) wherein it was held that date of entry inwards in the Customs Register alone cannot be the determining factor for levy of duty. If there is delay on the part of the authority in the grant of entry inwards, the importer should not be penalised, if the vessel was ready to discharge the cargo prior to the grant of entry inwards. Reliance was also placed on the decision of the Tribunal in the case of Veejay Lakshmi Engineering Works Ltd. Vs CC, Chennai-2007 (217) E.L.T. 159 (Tri.-Chennai) wherein it was held that where the vessel could not make its entry on account of Tug Master’s strike and the appellant was not able to obtain permission of entry inwards, the appellant should not be penalised for reasons beyond the control in complying with the legal requirements. In the present case also, the vessel had arrived at 2300 hrs on 28.02.2001 but the entry was not granted because of the Public Notice which was beyond the control of the appellant and therefore, following the above decisions, the appellant should be assessed at Nil rate of duty.

Respondent’s contention:-The learned additional Commissioner(AR) appearing for the revenue contends that as per the register for the entry of the vessels maintained with the customs ,the date of entry inwards was granted to the said vessel on 1-3-2001 at 1410 hrs. Further as per the Mumbai port trust letter dated 28-3-2001, the said vessel berthed at 141-D, Indira Dock at 0730 hrs on 1-3-2001 even though the vessel had arrived at the port at 2300 hrs on 28-2-2001. The light house dues applicable were discharged by the shipping lines on 1-3-2001. As per the customs manual “ the entry inwards can be granted after the shipping line has made payment for the light house dues and the shipping line needs to approach the preventive officer for granting entry inwards.” As per the application made by the appellant firm for grant of entry inwards, the date of entry inwards is shown as 1-3-2001. In the light of these documents available on record, it has to be concluded that the date of entry inwards is 1-3-2001 and therefore, the rate of duty prevalent on 1-3-2001 would be relevant date that should be applied. He relies on the decision of the five member bench of Hon’ble Supreme Court in the case of Bharat Surfactants (Pvt.) Ltd. Vs UOI-1989(43) E.L.T. 189(S.C) wherein it has been held that the date of entry inwards is the date mentioned in the customs register. He also relies on the decision of this tribunal in the case of CC, Mumbai vs. Sampat Industrial & Construction Co.-2003 (152) E.L.T. 390 (Tri.-Mum.) wherein it was held that if there is delay in grant of entry inwards due to bad weather, the Customs cannot be blamed for that and the day on which entry inwards was granted should be taken for the purpose of determination of rate of duty. He also relies on the affidavit filed by the Assistant Commissioner of customs wherein it has been affirmed that the application for the date of entry inwards was received only on 1-3-2001 and the same was granted on 1-3-2001. He also submits that as per the practise prevalent in Bombay customs house, boarding of the vessel for grant of entry inwards is done during office hours and the said facility is also available after office hours and holidays on payment of applicable MOT dues. In the present case, the appellant had not made such request nor paid any dues. In these circumstances, the differential duty demand in the present case treating the date of entry inwards as 1-3-2001 is sustainable in law.

Reasoning of judgement:- After careful considerations of the submission made by both the sides, Tribunal was of the view that the appeal itself can be disposed of as the issue lies in a narrow compass and therefore, after dispensing with the requirements of pre-deposit, the appeal was taken up for consideration and disposal. Section 15 of the Customs Act deals with the date of determination of rate of duty and tariff valuation of imported goods.
As per the proviso to section 15, if a bill of entry is filed before the date of entry inwards of the vessel, the bill of entry shall be deemed to have been presented on the date of such entry inwards. In present case there is no dispute about the fact that the vessel arrived in Mumbai port at 2300 hrs on 28-2-2001; the vessel was allowed to be berthed by the port authorities at 0745 hrs on 1-3-2001 ;the appellant discharged the port dues on 1-3-2001; the appellant applied for entry inwards and the said application was allowed on 1-3-2001; and in the entry inward register maintained by the custom house, the vessel was given entry inwards at 1410 hrs on 1-3-2001. From these documentary evidences available on record, it is clear that the date of entry inwards is 1-3-2001 and not any other date.
As regards reliance placed by the appellant on the Thomas Baker (Chemicals) Pvt. Ltd. case and Veejay Lakshmi Engineering Works Ltd case, they dealt with the situation when there was a delay by the customs authorities for grant of entry inwards. In the present case no such delay is seen or pointed out. The Five Member Branch of the Hon’ble Apex Court in Bharat surfactants (pvt) Ltd case (supra) clearly held that the date of entry inward is the date mentioned in the Custom Register. The Hon’ble High Court had occasion to consider the matter again in Jayant Kumar & Co. Vs UOI-2004(165) E.L.T. 277 (Bom.) wherein again the question arose what is relevant date of determining the rate of duty and tariff valuation when the bill of entry is filed prior to the date of entry inwards. The Hon’ble Supreme Court held that “thedate of entry inwards of the vessel is the date recorded as such in the customs register.” The said decision was affirmed by the Hon’ble Supreme Court in the said case reported in 2004 (166) E.L.T. A117 (S.C). A similar view was taken by the Hon’ble High Court of Bombay in the case of Kusum Trading Co. Vs UOI-1999 (108) E.L.T. 353 (Bom.) .in the light of these decisions, the issue is well settled that the date of entry inwards is the date recorded as such in the Customs Register .in the present case, the application for date of entry inwards as also the grant of entry inwards was on 1-3-2001 and therefore, the rate of duty that would apply is the rate prevalent on 1-3-2001.

Decision:- Appeal dismissed.

Comment:- The analogy drawn from the case is that from the proviso to section 15 of the Customs Act, 1962 that deals with date for determination of rate of duty and tariff valuation of imported goods, it is clearly stated that in case bill of entry is presented before the date of entry inwards of vessel, the date of presentation of bill of entry would be deemed to be the date of entry inwards granted to the vessel. Further, as per number of Supreme Court decisions it has been concluded that date of entry inwards is the date recorded in the Customs Register and as in the present case, the entry inwards in the Customs Register was 1.3.2001, the rate of customs duty applicable on 1.3.2001 would be relevant irrespective of the fact that the vessel arrived on 28.2.2001.

Prepared by:- Lovina Surana

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PJ/Case law/2014-15/2215

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