http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6  

PETITIONER: GANGADHAR NARSINGRAS AGARWAL

       Vs.

RESPONDENT: P. S. THRIVIKRAMAN & ANR.

DATE OF JUDGMENT16/03/1972

BENCH: RAY, A.N. BENCH: RAY, A.N. SIKRI, S.M. (CJ) GROVER, A.N. PALEKAR, D.G. BEG, M. HAMEEDULLAH

CITATION:  1973 AIR  350            1972 SCR  (3) 874  1972 SCC  (3) 475

ACT: Tariff  Act  1934--S.  44--Whether notification under  S.  44  is applicable to the fact find circumstances of the case.

HEADNOTE: The  appellant  on  26th  July  1966  filed,  shipping  bill   in triplicate  before  the  Joint Chief Controller  of  Imports  and Exports  for the porpose of obtaining export licences in  respect of  10,160.  metric tonnes of iron ore.  On 28 July  1966  export licence was granted to the appellant.  On 30 July 1966 the agents of  the  vessel made an application to the Asstt.   Collector  of Customs,  for  the grant of entry outward to the said  vessel  to load iron ore, which was granted- on the same day with permission to  ship  cargo  on  board the said vessel.   On  1  August,  the appellant presented to the Customs authority under section 50  of the  Customs  Act, 1962., shipping bills in  triplicate  and  the Customs authority made several endorsements on the shipping  bill on  the same day.  On, the2 August 1966, further  endorsements-on the  shipping bill was made by the Customs  authority  indicating that the shipment was inspected, checked and payment was made  in full. On  2 August 1966, a notification was issued by the  Ministry  of Commerce  imposing a duty at the rate of Rs. 10 per metric  tonne on lumpy iron ore. and on 28 January 1967, the Customs  authority issued  a notice to the appellant notifying that  goods  actually shipped  by  the appellant were subject to export  duty  and  the appellant  was  liable  to pay Rs. 98044 and  the  appellant  was called  upon  to show cause as to why the amount  should  not  be recovered from him. The  appellant contended that the shipping bill was presented  to the.,  Customs  authority and the entry outward to-the  ship  was given  prior  to 2 August, 1966 when the notification  came  into force and so, the notification under S. 4A of the Tariff Act 1934 was  not applicable to the consignment in question.  The  Customs authorities held that the appellant was liable to pay the  export duty.   The  appellant impeached the order  before  the  Judicial Commissioner   Who   also  upheld  the  order  of   the   Customs authorities. The only question which arose for decision before this Court  was

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6  

whether  the  shipment and export of iron ore  by  the  appellant became liable to the said duty introduced on 2 August 1966.   The appellant  contended  that the shipping bill was presented  on  1 August,  1966 and the order of the Customs authorities for  entry outwards  to the vessel was also given on 1 August 1966  and  so, the export in the present case was not liable to payment of  duty imposed  on  2  August 1966.   The  Customs  authorities  however contended that the vessel arrived at Marmagoa barhour on 3 August 1966  and  the vessel commenced loading on 3  August,  1966,  and therefore, under s. 16(i) of the Customs Act 1962, the shipping 875 bill  which  had  been presented before the  date  of  entry outwards  "shall be, deemed to be presented at the  earliest on 3 August 1966 when the vessel in question arrived. Allowing the appeal, HELD  : In the present case, the Customs  authorities  acted without  jurisdiction  in  imposing duty on  the  export  by holding  that the date of entry outwards of the  vessel  was the  date when the vessel, arrived.  Section 38 of  the  Sea Customs  Act  1878 was the Counter-part of Sec.  16  of  the Customs Act, 1962.  Section 38 had two provisos.  Under  the first  proviso  to  that  old  section  where  shipment  was permitted  without a shipping bill, the rate of duty was  to be the rate in force at the time when the shipment of  goods commenced.  Under the second proviso, the shipping bill must be  deemed to have been delivered on the date on which  that vessel  arrived or entry outwards was given which  ever  was later.   Under  the provisos of S. 38 of the  old  Act,  the Customs authorities had power to apply the rate in force  on the  date of the arrival of the vessel.  Under S. 16 of  the 1962 Act, it is not permissible to do so.  The statute  does not contain such a provision.  S. 16 of the 1962 Act  speaks of the fictional date only in relation to the order of  date of entry outwards of the vessel.  In, the present case,  the order  of entry outwards of the vessel was made prior  to  2 August,  1966.   Therefore, the Customs  authorities.  acted without jurisdiction in imposing the duty in question.  1879 G-880 C]

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2137 of 1968. Appeal  from the judgment and order dated April 5,  1968  of the  Judicial Commissioner’s Court , G a, Daman and  Diu  in Writ Petition No. 9 of’1967. Soli  Sorabji,  P.  C.  Bhartari, B.  D.  Bharucha,  J.   B. Dadachanj’i and Ravinder Narain, for the appellant. Jagadish Swarup,  Solicitor-General of India, Govind Das and B.   D. Sharma, for the respondents. The Judgment of the Court was delivered by Raj, J. This is an appeal by certificate from the,  judgment dated   5  April,  1968  of  the  Court  of   the   Judicial Commissioner, Goa, Daman and Diu at Panaji. The  appellant  challenged the levy of export  duty  of  Rs. 98044  on 9804-40 metric tonnes of iron ore shipped on  S.S. ’Ardenode’  on  3  August, 1966 at the rate of  Rs.  10  per metric tonne. The  appellant  on  26 July, 1966  filed  shipping  bill  in triplicate before the Joint Chief Controller of Imports  and Exports  Panaji,  Goa for the purpose  of  obtaining  export licence in respect of 10,160 metric tonnes of iron ore.   On 28  July, 1966 export licence was granted to the  appellant. On 30 July, 1966 M/s.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6  

971 appeal to voters that voting for Congress would amount to  a sin.. Reading the evidence in print one gets the  impression that each witness came prepared to play the part assigned to him. Exhibit  R-1/8  dated  26 August, 1966 is  a  notice  for  a meeting  of the Congress Committee at Singoli.   Exhibit  R- 1/50  dated 26 August, 1966 is the draft resolution of  that committee  meeting.,  It  is  written  by  the   respondent. Exhibit R-1/5 dated 26 August, 1966 contains the minutes  of the meeting at Singoli.  Exhibit R-1/6 contains the  minutes of  the  meeting of the Congress committee at Singoli  on  2 October, 1966.  These documents show that Paras Ram, Bhanwar Lai and Ram Chandra Sharma were connected with the  Congress Organisation.   The respondent was also associated with  the Congress  committee.   The  minutes showed  that  Ratan  Lai Petlia  was  a member of the  committee.   The  respondent’s witnesses  stated that Ratan Lai Petlia was a worker of  the Jan  Sangh.   The reason for saying so was  that  Ratan  Lai Petlia was cited by the appellant as a witness.  The records show that Ratan Lai Petlia was associated with the  Congress Organisation.  Patan Lai Petlia R. 1 W. 10 said that he  was associated  with the Congress Organisation at  Singoli.   He denied  that  Swamiji  of Bhanpura made any  appeal  to  the voters  that voting for Congress would amount to the sin  of killing  cow.  The respondent’s witnesses wanted to  condemn Ratan  Lai  Petlia  by saying that  Ratan  Lai  Petlia  made arrangements for Jan Sangh.  That is another illustration of the partisan character of the respondent’s witnesses. Nathu Lal P.W. 19 was believed by the High Court.  It  tran- spired  in the evidence that Nathu Lai became liable to  pay Rs. 372.06 to Krishi Sewa Sehkari Samiti and also to account for  73  bags  of super-phosphate.   Nathu  Lai  signed  the document R-1/15.  At the time of giving evidence he said  it was  Chhote  Lai   who promised to pay and account  for  the phosphate.  He did not rest content with that position.   He said  that  he signed the document as a  member.   The  High Court  did  not consider these justified criticisms  of  the evidence adduced on behalf of th respondent, Manna Lai P.W. 20 gave evidence not only about the speech of Swamiji of Bhanpura at Singoli on 15 February, 1967 but also of  the  speech of the appellant at Singoli on  29  January, 1967.  As to the appellant’s speech Manna Lai said that  the appellant talked of ’cow killing Congress 10 times’ and that is how he remembered the speech.  He narrated the speech  of the  appellant  like other witnesses in the  same  language. Manna  Lai said that Swamiji of Bhanpura spoke about  voting for dharma and cow.  Manna Lal   came to court from  Singoli along with Ram Chandra Sharma. The  overwhelming  impression produced by the  witnesses  on behalf  of the respondent is that they were all prepared  on the same 876 Hiralal  &  Co.  agents of the vessel S. S.  ’Ardenode’  made  an application  to the Assistant Collector of Customs, Marmagoa  for the grant of entry outwards to the said vessel to load iron  ore. On  30  July, 1966 the Assistant Collector of  Customs,  Marmagoa made  an  order granting entry outwards to the said  vessel  S.S. Ardenode and also gave permission to ship cargo on board the said vessel. On  1  August,  1966  the  appellant  presented  to  the  Customs authorities  under section 50 of the Customs Act, 1962,  (herein- after  called  the Act), shipping bills in triplicate,  dated  26 July,  1966.  The appellant in accordance with the provisions  of section 50 of the Act at the foot of the shipping bill subscribed

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6  

to a declaration as to the truth of the contents of the  shipping bills.   On  1 August, 1966 the Customs  authorities  made  these entries  on  the shipping- bill ’rotation No. 730 Sd/  1  August, 1966  ’Let export after examination if necessary Sd/-  1  August, 1966’ and.  ’E.F.No. 3/1/8/1966’.  The abbreviation ’E.F.’  means Export  Fee.   On  2 August 1966  the  Customs  authorities  made further  endorsements on the shipping bill.   These  endorsements were  PI as usual and checked des’; ’Inspected the  lot-2-barges- checlkeci des’; and Pd in full’. On  2  August,  1966  there was a  notification  issued,  by  the Ministry  of Commerce in exercise of powers conferred by  section 4-A  of the Indian Tariff Act, 1934 amending the second  schedule to  the  Tariff  Act.  The relevant item  in  the  said  schedule introduced by way amendment is 28 and the name of the article  is lumpy iron ore and the rate of duty is Rs. 10 per tonne. The S.S. Ardenode arrived at Marmagoa at 23.20 hours on 2 August, 1966.   The  vessel  arrived at Marmagoa  Inner  Harbour  on  (3) August,  1966 at 07.50 hour-,.  The vessel commenced loading  the cargo on 3 August, 1966. The  Customs authorities on 28 January, 1967 issued a  notice  to the  appellant notifying that the goods actually shipped  by  the appellant  were subject to export duty at the rate of Rs. 10  Per metric tonne and the custom duty amounting to Rs. 98044 which was not  levied  in  respect  of the consignment  was  due  from  the appellant  and the appellant was called upon in  accordance  with section 28 of the Act as to why the amount should not be recover- ed from the appellant. The  appellant contended before the Customs authorities that  the shipping  bill was presented to the Customs authorities  and  the entry  outwards  to the ship S.S. Ardenode was given prior  to  2 August, 1966 when no duty was payable in respect of the export of the goods in question.  The appellant, therefore, contended 877 the notification under section 4-A of the Tariff Art 1934 was not applicable to the consignment and no duty was payable in  respect of  the export of the having regard to the provisions of  section 16 of the Customs Act.  It may also be stated that the  appellant impeached the vires of the notification. The Customs authorities on 19 April, 1967 held that by virtue  of the  provisions  of section 16(1) of the Act  the  shipping  bill shall  be  deemed  to have been presented at the  earliest  on  3 August,  1966  when the vessel in question arrived.   The  export duty  was  levied with effect from 2 August, 1966.   The  Customs authorities  therefore held that the appellant was liable to  pay the export duty. The  appellant  impeached the order of  the  Customs  authorities under  Article  226  of  the Constitution in  the  Court  of  the Judicial Commissioner, Goa, Daman and Diu, Panaji.  The  Judicial Commissioner upheld the order of the Customs authorities. The entire controversy in the present appeal is whether  shipment and export of iron ore by the appellant became liable to the said duty introduced on 2 August, 1966. The relevant provisions for the purpose of the present appeal are to be found in section 16 which deals with date for determination of rate of duty and tariff valuation of export goods and sections 39,  50 and 51 which deal with loading of export goods on  vessel and clearance of goods for exportation. Section 16 is as follows :-                "16(1).    The  rate  of  duty   and   tariff               valuation,  if any, applicable to  any  export               goods,  shall  be the rate  and  valuation  in               force-               (a)  in the case of goods entered  for  export               under  section  50,  on the date  on  which  a               shipping  bill or a bill of export in  respect

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6  

             of such goods is presented under that section;               (b)   in  the case of any other goods, on  the               date of payment of duty;               Provided  that if the shipping bill  has  been               presented before the date of entry outwards of               the  vessel  by  which the  goods  are  to  be               exported, the shipping bill shall be deemed to               have been presented on the date of such  entry               outwords.               (2)   The provisions of this section shall not               apply to baggage and goods exported by post.               L1061supCI/27 878 The appellant contended that the shipping bill was presented on  1 August, 1966 and the order of the Customs  authorities for entry outwards to the vessel was also given on 1 August, 1966, and, therefore, the export in the present case was not liable  to payment of duty imposed on 2 August,  1966.   The Customs  authorities  on the other hand contended  that  the vessel arrived at Marmagoa on 3 August, 1966 and the  vessel commenced  loading  on 3 August, 1966, and,  therefore,  the shipping  bill which had been presented before the  date  of entry  outwards  ’shall  be deemed to be  presented  at  the earliest  on  3  August, 1966 when the  vessel  in  question arrived’. The  shipping  bill under the Customs Act means  a  shipping bill referred to in section 50 of the Act.  Section 50 is as follows:               "50(1).  The exporter of any goods shall  make               entry  thereof  by presenting  to  the  proper               officer in the case of goods to be exported in               a vessel or aircraft, a shipping bill, and  in               the  case of goods to be exported by  land,  a               bill of export in the prescribed form.               (2)   The   exporter  of  any   goods,   while               presenting a shipping bill or bill of  export,               shall  at the foot thereof make and  subscribe               to  a  declaration  as to  the  truth  of  its               contents". In  the  present case, it is common case that  the  shipping bill  was presented to the Customs authorities on 1  August, 1966  and the Customs authorities made several  endorsements on  the shipping bill on the same day.   These  endorsements permitted  export  after  examination,  if  necessary.   The further endorsements on the shipping bill on 2 August,  1966 indicated  that  the  shipment was  inspected,  checked  and payment in full was made.               Section 51 of the Act is as follows :-               "Where  the proper officer is  satisfied  that               any   goods   entered  for  export   are   not               prohibited goods and the exporter has paid the               duty, if any, assessed thereon and any charges               payable under this Act in respect of the same,               the   proper   officer  may  make   an   order               permitting clearance and loading of goods  for               exportation". In   the   present  case,  the  Customs   authorities   made endorsement   on  the  shipping  bill  on  1  August,   1966 permitting  export  after examination,  if  necessary.   The shipping  bill described the goods as ’free goods’.   Export licence was also granted on that shipping bill.  Sections 50 and  51 of the Act deal with entry of goods for  exportation and clearance of goods for exportation.  The word 880 where  the shipping bill was in anticipation of the  arrival

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6  

of  any  vessel  of  before an order  Was  given  for  entry outwards  of the vessel the shipping bill must be deemed  to have been delivered on the date on which that vessel arrived or entry outwards was given whichever was later.  Under  the provisions  of  section  38  of the  1878  Act  the  Customs authorities had power to apply the rate in force on the date of the arrival of the vessel.  Under section 16 of the  1962 Act  it is not permissible to do so.  The statute  does  not contain such a provision.  Section 16 of the 1962 Act speaks of the fictional date only in relation to the order of  date of  entry outwards of the vessel.  In the present case,  the order  of entry outwards of the vessel was made prior  to  2 August,  1966.  Therefore, the Customs authorities,  in  the impugned  order acted without jurisdiction in imposing  duty on the export by holding that the date of entry outwards  of the vessel was the date "when the vessel arrived". For  the foregoing reasons the appellant is entitled  to  an order cancelling the notice dated 28 January, 1967 by  which the Customs authorities demand duty from the appellant.  The order of the Judicial Commissioner is set aside.  There will be  a writ setting aside the notice dated 28  January,  1967 and  an  order for bearing the respondents from  taking  any steps  or  proceedings  pursuant  to  the  notice  dated  28 January,  1967.   There will also be an order  quashing  the order of the Assistant Collector of Customs dated 19  April, 1967 which gave effect to the notice and held the  appellant liable to pay the export duty.  The appeal Is allowed. In  the facts and circumstances of the case each party  will pay and bear their owm costs. S.C.                              Appeal allowed. 881