Great Eastern Shipping Company Limited vs. Deputy Commissioner Of Customs (Import)

Held

The Court held that the law prevalent as on the date of the import of the vessel (May 28, 2012) would only be applicable. The Court reasoned that the date of entry of the vessel into Indian waters is the relevant date for the application of the law, irrespective of whether the bill of entry was presented before or after the actual entry. The Court found that the petitioner's vessel was imported on May 28, 2012, when customs duties were nil, and the integrated tax under Section 3(7) of the Customs Tariff Act, 1975, was introduced later, effective from July 1, 2017. Therefore, the Court held that the petitioner is entitled to the reliefs claimed. The Court also found the writ petition to be maintainable, rejecting the respondents' contention otherwise. The Court did not find the submissions of the Revenue persuasive, particularly regarding Section 15 of the Customs Act, 1962, and the applicability of duty rates on the date of filing the bill of entry. The Court ultimately allowed the writ petition, directing that no customs duties or integrated tax could be levied based on the law prevalent in 2018.

Facts

The petitioner, a shipping company, imported a vessel, MV Jag Aditi, into India on May 28, 2012. At the time of import, customs duties were nil due to various exemption notifications. The petitioner failed to file a bill of entry at the time of import. In June 2018, realizing this omission, the petitioner voluntarily informed the customs authorities and sought regularization, clarifying that no duty was leviable. A show cause notice was issued for non-filing of the Import General Manifest (IGM) and bill of entry, leading to a penalty of Rs. 25,000 under Section 30 and Rs. 60,000 under Section 117 of the Customs Act, 1962. The petitioner paid these penalties and filed a manual bill of entry on July 10, 2018, for procedural regularization. Subsequently, the customs authorities, via a letter dated September 19, 2018, indicated that payment of penalties did not absolve the importer from assessment under Section 17 of the Customs Act, 1962, and that duties applicable in 2018 might be levied. The petitioner filed a writ petition seeking to prohibit assessment/re-assessment to customs duties and integrated tax for the vessel imported in 2012 under the law prevalent in 2018.

Key Issues

1. Whether the Respondents are prohibited from assessing/re-assessing the vessel MV Jag Aditi to customs duties in 2018, when it was imported in 2012 with nil applicable duties, under Section 17 of the Customs Act, 1962? 2. Whether the Respondents are prohibited from assessing the import of the vessel to Integrated Tax (IGST) under Section 3(7) of the Customs Tariff Act, 1975, when this levy was introduced after the vessel's import? Petitioner's arguments: The petitioner contended that the assessment should be based on the law prevalent at the time of import (May 28, 2012), when customs duties were nil. They argued that attempting to levy duties under the law applicable in 2018 is without jurisdiction and contrary to constitutional provisions. They relied on the principle that the date of import, not the date of filing the bill of entry, should be the determining factor for applicable duties, citing hypothetical scenarios of changing duty rates and exemptions. They also referred to a CESTAT decision in Samson Maritime Limited, which dealt with similar facts of delayed bill of entry filing and duty exemption at the time of import. Revenue's arguments: The Revenue contended that Section 15 of the Customs Act, 1962, makes the rates of duty and tariff valuation on the date of filing the bill of entry (July 10, 2018) applicable. They argued that the CESTAT decision did not explicitly rule out filing a bill of entry for regularization as per Board's circular and that the Bombay High Court decision was against a provisional order.