the port here the goods are to be landed. Section150 provided that wherever on the levying of any duty forany purpose it becomes necessary to determine the precisetime of importation of any goods if made by sea it shall bedeemed to have been completed from the time the vessel inwhich such goods were imported came within the limits ofthe port at which they ought to be reported. The importermaintained that as ship had reported on 29th April 1895, (before 2nd May) at North Sydney, Canada, no duty wasleviable, because importation was complete on 29th April. 9 HCD/83 31895. This plea of the company was rejected by the Privycouncil. It posed a question as to whether the sugar wasimported before or after 3-5-1895. Their Lordships madethe following observation on the phrase "imported intocanada": " (1) The imposition of the duties is contained onlyin the direction for their payment. There are nowords which render the goods liable for theduty or make the duty (as it said) attach at anydate prior to the date of payment. (2) The words"when such goods are imported into Canada"express the time at which the duties are to bepaid. "their lordships also further emphasised. "the result is that, in the opinion of their Lordships,the words "imported into Canada" must, in orderto give any rational sense to the clause, meanimported at the port of discharge, and cannot beused in the sense attributed to the words "imported"by the appellants, in accordance withthe construction placed by them on the definitionin s. 150 of the Customs Act. "- ( 25 ) REFERENCE with advantage be also made to Wilson v. Chambers and Company Proprietary Ltd. (1926) 38 C. L. R. 131 (14 ). In that case the company was the consignee of paintship from England which was sent to Sydney (Australia ). Ship arrived at port Kembla which was a proclaimed portand a custom officer was in attendance there. One Chamberspurchased the paint while it was on ship and thereafter the: ship left the port but without paying duty. Chambers wascharged with offences for failing to enter the goods and forevading payment of duty. Section 68 of the Customs Actprovided that all imported goods shall be entered either forhome consumption or for warehousing or for transhipment. The question was whether the goods were imported withinthe meaning of the section. Chambers wascharged with offences for failing to enter the goods and forevading payment of duty. Section 68 of the Customs Actprovided that all imported goods shall be entered either forhome consumption or for warehousing or for transhipment. The question was whether the goods were imported withinthe meaning of the section. It was admitted case that the shipcame to port and the only reason given why the goods werenot landed was because Chambers had agreed, while theship was in the port, to sell them to the owner of the ship. The argument was that as goods had not been taken off theship there was no import. This plea was rejected, thoughchief Justice Knox agreed (page 136) that goods are importedwhenever they are brought into port for the purpose ofbeing discharged there. But he held that goods had come atthe port of destination and their character of importationcannot be affected merely because the goods had been. soldwhile on the ship. That entering merely the territorial limitswould not amount to import was said by Starke J. when heobserved: "they may be imported by means of a ship or aircraftor through the post (cf. sees. 49 and 35 ). Theymay be brought within the territorial limits ofaustralia, and may indeed be subject to Customcontrol and yet not be "imported" in the fiscalsense of the term. Thus goods shipped fromengland to New Zealand via Australia are notimported into Australia because in the courseof her voyage the ship with the goods on boardcomes within the territorial limits of Australiafor commercial purposes. Yet such goods wouldbe subject to the control of the Customs (Customs Act. sec. 31 ). Again goods comingashore from wrecks could hardly be clayed asimported goods, and the Customs Act has madespecial provisions to meet the case (vide sees. 65, 66, 67 and 148 ). " ( 26 ) REFERENCE to the Australian cases noted in Shriramlingamills v. Assistant Collector of Customs (1983)E. L. T. page 65 and 70 (15), is of great help where Gibbs J. was quoted as having held that (para 17) "however whetheror not the sea within three nautical miles of the coast shouldbe regarded as part of Australia for other purposes, it is, inmy opinion clear that goods are not imported simply bybringing them within the three miles limit. " Barwick C. J. also was thinking on the same lines when he observed in theaforesaid decision : "however, in any case, it is to my mind a completelyimpractical concept that importation of goodstakes place so soon as and wherever the shipcarrying them enters the marginal seas, perhapsonly to leave them again for navigational purposesas it moves towards the port of discharge. " ( 27 ) IN Union of India v. Khalil Kecherim, 1970 Cr. L. J. 417 (16), a passenger travelling by air landed at Bombay. Hedeclared to custom officer that he was carrying some diamondsbut for re-export. Later on the diamonds were seized onthe ground that they were imported in Indian Custom barrierscontrary to prohibition, as contained in Section lll (d) ofcustoms Act 1962. The argument of Union of India wasthat the moment the plane landed at Palam Air port, Newdelhi there was import of diamonds into India. Rejectingthe contention, a Division Bench of this Court observed asfollows: "i am not prepared to accept this contention becauseif this contention is accepted any goods or articleswhich are contained in a plane which haslanded in India or in a ship which has enteredthe territorial waters of India would be liableto the payment of duty or to confiscation if theimport thereof is prohibited even though thegoods or articles are noi unloaded from the planeor the ship for being brought into India. ". . . . "unless, therefore, the goods are broughtinto the country for the purpose of use, enjoyment,consumption, sale or distribution so thatthey are incorporated in and mixed up with themass of the property in the country, they cannotbe said to have been imported or brought intothe country. "we are in respectful agreement with the said view. It issignificant to note that Sylvania's case proceeded on theassumption that the Bombay High Court case (Gopal Mayaliv. T. C. Seth; AIR 1960 Bombay 478) (17) where a learnedjudge had made the observation that the act of importationwould be complete at the period of time when the goodscrossed the custom barrier, was approved in Radha Kishanbhatia v. Union of India and Others; AIR 1965 SC 1072 (18) it meant that it had also been decided that the rate ofduty must be worked out when the ship crossed the territorialwaters of India. We may with'respect point out that the issuein Radha Kishan's case (supra) was very dilferent fromthe present one. We may with'respect point out that the issuein Radha Kishan's case (supra) was very dilferent fromthe present one. In that case the question was with regard tosection 167 (8) of the Customs Act of 1878 which providedthat if any goods the importation of or exportation of whichis for the time being prohibited, any person concerned inany such offence shall be liable to penalty. In that case goldwas seized from the accused when he was going fromjaisalmer to Pokaran (both within India ). The Supremecourt held that accused could not be concerned in thecommission of offence, if he was not responsible for bringingthe gold in India. It was in that connection that if observedthat "offence of importation of goods is complete when thegoods have crossed the Custom barrier". No question of levyof duty arose, or the larger question of what constitutes importfor the purpose of duty. as explained in various casesmentioned above. This misconception in our humble viewled to taking a wrong view of law in Sylvania's case. ( 28 ) THAT the Sylvania case had taken too extreme anduntenable a view in not applying Section 15 of the Act wasrecognised in the later Division Bench of Bombay High Courtin Synthetic and Chemicals Ltd. v. S. C. Ccutinlic and others:1981 E. L. T. 414 (19) (Born. ). In that case the ship arrivedin the territorial waters on 20-8-1968. The Bill of Entry wasalso prepared for storing the goods in warehouse on thesame date. At that time duty was 60 per cent. Sometimelater a notification was issued under Section 25 (1) of theact on 12-10-1968 where duty in excess of 27 i per centwas exempted. Goods were removed in December 1968to. Tune 1969. The importer claimed that he was liable topav a duty of 27 per cent. The learned single judge followingsylvania's case held that as the ship entered the territorial waters earlier to the exemption notification of 12-10-68the importer was liable to pay 60 per cent. Importer filedappeal which was allowed and it was held that the importedwas liable only to pay 27 per cent of duty which was inexistence on the date the goods were cleared. It is clearthat if Sylvania's case was to be followed the importer shouldhave paid 60 per cent duty because at the time when itentered the territorial waters this was the rate of duty. It is clearthat if Sylvania's case was to be followed the importer shouldhave paid 60 per cent duty because at the time when itentered the territorial waters this was the rate of duty. Thebench however held that the relevant date for calculating theduty would be the date of actual removal in terms of Section15 (l) (b) read with Section 68 of the Act. The Bench,purported to restrict the ratio of Sylvania's case only to a (case where on the date of importation there was a total exemptionbut not if there was a partial exemption. It distinguishedsylvania's case by observing that when there is total exemptionit is as if Entry is not there, and such a case there is nochargeability and the goods are not liable to duty. Here again,the Bench misappreciated the position in law, for as we havepointed out above, notwithstanding the total exemption, goodsremain chargeable by virtue of Section 12 (i) of the Act (theentry in Tariff Act is not deleted ). Only effect is that dutyis not payable because of total exemption. Goods can be saidto be not chargeable only when the said goods do not failwithin any entry in the Tariff Act. In our view Syntheticchemicals' case came to the correct conclusion that the rateprevalent on the day of clearance will apply under Section15 (l) (b) of the Act. Having come to the above conclusionthe Bench could not still have distinguished Sylvania's caseand should have held it to be wrongly decided. To hold thatif there is a total exemption when the goads enter the territorialwaters but later on that exemption is withdrawn, thegoods will still be chargeable to no duly, is to fall in the errorof giving the general meaning to the word 'import' which hasbeen criticised in Empress Mills' case (supra ). ( 29 ) IN our view the fixation of the date for the purpose of duty is not affected whether there is total exemption or apartial exemption. Synthetic Chemicals' case (supda) acceptsthat if by exemption notification duty was chargeable at therate of say, I per cent at the time ship enters territorial watersbut by the time goods were cleared exemption had been withdrawnand duty was chargeable at 100 per cent, importerwould have to pay the rate of duty at 100 per cent. Synthetic Chemicals' case (supda) acceptsthat if by exemption notification duty was chargeable at therate of say, I per cent at the time ship enters territorial watersbut by the time goods were cleared exemption had been withdrawnand duty was chargeable at 100 per cent, importerwould have to pay the rate of duty at 100 per cent. Butcuriously holds that if because of total exemption the rateof duty is Nil, at the time the ship entered territorial watersand even if it has been withdrawn before clearance of goodsimporter will not be liable to pay duty at the rate applicableat that time. With respect we can find no logic or consistencyin this approach. Either one holds that import is complete atthe time when ship enters territorial waters and that point oftime: would determine the rate of duty which is applicable (as Sylvania's case held ). But Synthetic Chemicals' case doesnot so hold, but says the rate applicable is under Section 15 (1) (b) of the Act. It thus accepts that the date of import (in the loose sense) in the sense of entering the territorial water ofindia has no relevance for determining the rate of dutywhichmust b" worked as under Section 15 (1) of the Act. Thoughmr. Thakur sought to explain this hesitation in Syntheticchemicals' case to say clearly that Sylvania's case was wronglydecided. Mr. Rana took the rogical in pursuit of his argumentto say that the distinction between a case of total exemptionand partial exemption made by the Bench shows an inconsistencyand is wrong. According to him there is no differencein either case. Mr. Rana goes to the length of sayingthat whenever there is an exemption notification issued undersection 25 (1) of the Act whether for total or partial the datefor levy of duty will always be the date when the ship entersthe territorial waters of India. According to him there isexemption from chargeability in one case and in the other theliability is pro rata. The argument so put shows its unsoundness. How can in a case where partial exemption is given can itbe said at all that there is no chargeability. In such a casethe whole of the consignment is chargeable to a duty. Onlybecause of partial exemption rate of duty will be calculatedat 40% instead of 100 per cent. The argument so put shows its unsoundness. How can in a case where partial exemption is given can itbe said at all that there is no chargeability. In such a casethe whole of the consignment is chargeable to a duty. Onlybecause of partial exemption rate of duty will be calculatedat 40% instead of 100 per cent. For calculation, the totalvalue of consignment will bear a levy of duty at a rate of40 per cent, and not that 40 per cent value of consignmentwill be levied a duty at a rate of 100 per cent. The argument of Mr. Thakur suffers from the infirmityof assuming that if there is nil assessment the goods cease tobe dutiable. As a matter of fact Section 2 (2) defines assessmentto include provisional assesment. . . . and any order of assessmentin which the duty assessed is nil. Even the word 'shortlevied' under the Excise Act, has been held to include wherenil duty is levied. Thus it has been held that in order toattract Rule 10 of the Central Excise Rules which providesthat where duties or charges have been short-levied throughinadvertence. . . . . . the person chargeable with the duty orcharge so short-levied shall pay the deficiency on a writtendemand by the officer being made within 3 months, to meanthat it is not necessary that. some amount of duty shouldhave been assessed and that the said amount should alsohave been actually paid. "that provision will apply evento cases where there has been a nil assessment in which casethe entire duty later on assessed must be considered to bethe duty originally short-levied". (Vide N. B. Sanjanav. E. S. and W. Mills AIR 1971 SC 2039 (20 ). Thus wherethere is total exemption it amounts to nothing more thansaying that nil payment of duty is payable. This does notin any manner make section 15 of the Act inapplicable. When pressed as to when Section 15 will apply, Mr. Ranacould only offer on instance when there is an increase ordecrease in the rate of duty under the Customs Tariff Actfor the time being in force. Thus if when ship enteredterritorial waters rate of duty is 50 per cent, under thetariff Act, but when it presents the bill of entry it is raisedto 100 per cent, the importer would be liable to pay thelater duty i. e. 100 per cent. But this illustration by Mr. Thus if when ship enteredterritorial waters rate of duty is 50 per cent, under thetariff Act, but when it presents the bill of entry it is raisedto 100 per cent, the importer would be liable to pay thelater duty i. e. 100 per cent. But this illustration by Mr. Ranaitself nullifies his earlier contention that duty must be leviedwhen there is import, which according to him means when theship enters the territorial waters of India. This will showto what uncut knots this argument of Mr. Rana leads to. In point of fact, that rate of duty has to be calculated withreference to the date and point of the time mentioned insection 15 of the Act stands concluded by the decision inprakash Cotton Mills v. B. Sen and others (AIR 1979 SC675 (21) (as was even noticed in Synthetic Chemicals' Case ). ( 30 ) IN Prakash Cotton Mills' Cass, the facts were thatthe Bill of Entry was filed on 23-8-1965. The goods werekept in warehouse on 22-9-1965. Currency was devaluedin June 1966 and the Customs Amendment ordinance waspromulgated in 7/07/1966 by which Sections 14 and 15were amended. The goods were cleared in September anddecember, 1966. The grievance of importer was thatgoods were allowed to be cleared on payment of enhancedduty according to the amended provisions of the Act. Thecustom Authorities held that they were liable to pay theenhanced duty. The question before the Supreme Courtwas whether custom authorities were justified in applying therate of duty according to the rate prevalent on the date oftheir actual removal from the warehouse. It may be thatsection 15 had been amended by Act XX of 1966 by which'rate of exchange' had been inserted in Section 15, after theword 'rate of duty'. In the case before the Supreme Courtthis was the position (it was only by Act 25 of 1978 thatthe word 'rate of exchange' was omitted from Section 15 (1),but the same purpose was effected by adding a proviso tosimilar effect in clause to sub-section (1) of Section 14of the Act. The argument before the Supreme Court wasthat the Custom authorities were not entitled to take thenew rate of exchange on the depreciated value of the currencyinto consideration in respect of the consignment asit had been shipped in Bombay and stored in warehousebefore the amended Section 15 came into force. The argument before the Supreme Court wasthat the Custom authorities were not entitled to take thenew rate of exchange on the depreciated value of the currencyinto consideration in respect of the consignment asit had been shipped in Bombay and stored in warehousebefore the amended Section 15 came into force. This pleawas rejected by the Supreme Court which held that it issection 15 which specifies the date for determination of therate of duty of the imported goods (emphasis supplied ). Itthen went on to observe "it is thus clear requirement ofclause (b) of sub-section (1) of S. 15 of the Act that therate of duty, rate of exchange and tariff valuation applicableto any imported goods shall be the rate and valuation inforce on the date on which the warehoused goods are actuallyremoved from the warehouse". . . . . . . . . "as it isnot in dispute before us that the goods, which are the subject-matterof the appeals before us were removed fromthe warehouse after the amending Ordinance had come intoforce on 7/07/1966, the customs authorities and thecentral Government were quite right in taking the viewthat the rate of duty applicable to the imported goods hadto be determined according to the law which was prevalenton the date they were actually removed from the warehouse,namely, the amended Sections 14 and 15 of the Act. " ( 31 ) WE can find no feature to distinguish the Supremecourt case from the present case. The Supreme Court hasclearly held that rate of duty applicable to imported goodsis to be as per Section 15 of the Act notwithstanding thatthe goods may have entered ths territorial waters earlier tothe amended ord''nance. In face of such authoritative pronouncementit is futile for the petitioner to contend that therelevant date for determination of duty is the time whengoods enter the territorial waters of India. We have nodoubt that had the learned Judges deciding Sylvania's casethe benefit of opinion expressed in Prakash Cotton Millscase (supra), their decision would have been to the contrary. Admittedly in all the cases either the presentationof. Bill of Entry, or the date of entry inwards or the date onwhich the goods are actually removed from the warehouseare all subsequent to the notification of 16-10-1980. Admittedly in all the cases either the presentationof. Bill of Entry, or the date of entry inwards or the date onwhich the goods are actually removed from the warehouseare all subsequent to the notification of 16-10-1980. Assuch the rate for determination of duty is the one relevantsubsequent to that date and by then total exemption hadbeen withdrawn and it was only partial exemption of dutyas was in excess of 40 per cent. The demand of the Customsauthorities in applying Section 15, therefore, couldnot be faulted. The effort of the counsel for the petitionerto pre-date the time for calculation of duty at a point oftime when ship entered the territorial waters, has nothing tocommend itself either in principle or law. In this connectionreference may also be made to Collector of Customs,calcutta V. Dass and Co. ( AIR 1966 SC 1577 )22. Theresection 37 of the 1878 Act (corresponding to the presentsection 15) provided that the rate of duty applicable to anyimported goods would be the rate in force on the date onwhich the Bill of Entry is delivered to the customs Collectorunder Section 86, but Section 86 provided that the Bill ofentry could be delivered upon and before the landing of thegoods. . On 27-4-1955 the importing vessel obtained theorder for inward entry. Upto 30/04/1955 the rate ofduty was Re. I per pound and subsequently it was reducedto 12 annas per pound. Cargo was discharged after30-4-1955. The Court held that even though the Bill ofentry had been given earlier to 30-4-1955 but as undersection 86 it could be delivered only on the date of landingthe Bill of Entry even if presented earlier must be deemedto have been delivered on the landing of the goods i. e. after30-4-1955 and the rate of duty chargeable on the importedgoods must be the rate in force on that date. It was consequently held that the importer was liable to pay reducedduty, i. e. at the rate of 12 annas per Ib. only. ( 32 ) THAT it is section 15 which determines the date forcalculating the rate of duty is also the view of other Highcourts. ( 33 ) IN K. Jamal Co. V. Union of India : 1981 E. L:t;162 23 (Mad.) by means of a notification of 1-7-1977 therewas a total exemption on the import of palmoline. Theimporter's ship arrived on 22-2-1979. ( 33 ) IN K. Jamal Co. V. Union of India : 1981 E. L:t;162 23 (Mad.) by means of a notification of 1-7-1977 therewas a total exemption on the import of palmoline. Theimporter's ship arrived on 22-2-1979. On 1-3-1979 anothernotification was issued by which the exemption was givenas is in excess of 12. 5 per cent. The Bill of Entry wasfiled by the importer on 13-3-1979. The importer claimedthat he was not liable to pay any duty in terms of1-7-1977 notification. This plea was rejected and the Highcourt held that the relevant date is the date for presentationof the Bill of Entry which is 13-3-1979, in terms of Section15 of the Act. ( 34 ) SIMILARLY in Ramlinga Mills case (1983) E. L. T. 65 (Kerala), under Section 25, notification of total exemptionhad been issued which was valid upto 30-12-1978. In betweenthe ship arrived at Bombay and then sailed for Cochinwhich was the destination port, where it reached on 4/01/1979. Subsequent to 5-1-1979 there was againnotification giving total exemption. The argument of theimporter was that as the goods had entered territorial watersin Bombay by 28th December, and the act of importationwas complete and he was entitled to the earlier notificationtill 31-12-1979, giving total exemption. This plea wasrejected and it was held that importation only took placewhen the vessel crossed the custom barrier at the intendedport of importation namely Cochin. The argument of importtaking place merely because of goods having enteredthe territorial waters was reiected. We may note in passingsylvania's case was referred to but it was observed thatit was not necessary to examine the correctness of the deciion because of the factual changes in that case. Someobiter observations that if the ship enters the territorialwaters and hearth at the port of destination it may be thatthe importation is complete must be read in the context ofthe clear recognition that Sylvania's case was not applicable. These observations cannot be read to mean that for findingout the date Section 15 is not the only relevant sectionmore so when the Kerala High Court noticed the subsequentbombay case in Synthetic Chemicals case and also thesupreme Court case in Prakash Cotton Mills. ( 35 ) SIMILAR view has also been taken in Shewbuxrai On-karmall v. Assistant Collector of Customs and Others (1981e. L. T. 298) 24 (Calcutta ). Mr. ( 35 ) SIMILAR view has also been taken in Shewbuxrai On-karmall v. Assistant Collector of Customs and Others (1981e. L. T. 298) 24 (Calcutta ). Mr. Rana made an effort topersuade us to hold by referring to various provisions of theact that import for fiscal purpose would be cnmnlete bythe mere entry into territorial waters and inevitably the rateof duty must be calculated on that date. We have alreadypointed out that this argument ignores Section 15 for whichwe can find no justification. Reference to Section 2 (25)of the Act, to the definition of 'imported goods' does notadvance the matter for the petitioner. Definition says that"imported goods' means any goods brought into India froma place outside India but does not include goods which hadbeen cleared for home consumption. Thus it is dear "that thegoods remain 'imported goods' till they are cleared for homeconsumption, which cannot be done without complyingwith Section 15, and after presenting a Bill of Entry undersection 4q of the Act. Therefore, the definition of the'imported goods' would suggest that import is not completeonly at the time when the ship enters the territorial waters. Rather import is not complete till the goods are cleared forhome consumption. This finds from the definition of 'importer'which includes an owner in relation to any goods atany time between their importation and the time when theyare cleared for home consumption. As a matter of fact areference to Section 83 will show the hollowness of the argu ment of the counsel for the petitioners. This section providesfor the rate of duty applicable to goods imported bypost and provides that the rate in force on the date on whichthe postal authorities present to the appropriate officer a listcontaining the particulars of goods for the purpose of assessingthe duty will be the rate. Proviso explains that if suchgoods are imported by vessel and a list of goods containingthe particulars was presented before the date of arrival ofthe vessel it shall be deemed to have been presented on thedate of such arrival. Obviously the arrival of the shipmeans arrival at the port. and not in the territorial waters,because under Section 29 of the Act no one will cause avessel to call or land on arrival in India at any place otherthan a custom port. Thus the rate will be determined not by the entry in territorial waters. Obviously the arrival of the shipmeans arrival at the port. and not in the territorial waters,because under Section 29 of the Act no one will cause avessel to call or land on arrival in India at any place otherthan a custom port. Thus the rate will be determined not by the entry in territorial waters. ( 36 ) REFERENCE by the counsel to Section 21 of the Customs Act rather goes against him. This Section providesthat all goods derelict, jetsam; flotsam and wreck broughtor coming into India, shall be dealt with as if they wereimported into India. Now Jetsam is where goods are castinto the sea and there risk and remain under water; flotsamis where the goods continue to float on the surface of thewater; Wreck are such goods including the ship Or cargoor any part as are afloat or cast upon the land by sea. Ifthe argument of the counsel for the petitioner was correctthat mere entering into territorial waters amounts to importfor fiscal purposes then this fiction need not have been. createdby Section 21 because it would have been superfluous. Why fiction has been created is because under the meaninggiven to import, it wcruld be impossible to apply this to flotsam,wreck, because these are never meant to form a partof the mass of goods on the main land. There is no questionof clearing wreck, jetsam for home consumption, andthe question of payment of duty would never arise. Butsection 21 creates a fiction of import. This would not havebeen necessary, if as argued by Mr. Rana import was comp-lete the moment goods enter territorial waters. This fictionhas been created for the obvious purpose so that people engagedin smuggling may not just throw away the goods onthe sea or under the sea to be picked up by concerned personsand claim that they were never brought within the portfor the purpose of home consumption. It is to check thismenace that this fiction has been created. ( 37 ) SECTION 22 which provides for abatement of dutyon the damaged or deteriorated goods also supports the contention of the respondents. It will be appreciated that thedefinitionof imported goods does not include the goodswhich have been cleared for home consumption. This definitionwould, therefore, include goods which may havebeen kept in a warehouse but have been damaged beforeclearance for home consumption in fact it is so providad forin Section 22 (c ). It will be appreciated that thedefinitionof imported goods does not include the goodswhich have been cleared for home consumption. This definitionwould, therefore, include goods which may havebeen kept in a warehouse but have been damaged beforeclearance for home consumption in fact it is so providad forin Section 22 (c ). Similarly Section 22 (b) covers a situationwhere any imported goods are damaged after the unloadingbut before their examination under Section 17 (forassessment of duty ). In both these cases in accordancewith sub-section (2) of Section 22 the duty to be chargedshall bear the same proportion to the duty chargeable onthe goods before the damage or deterioration which the valueof the damaged or deteriorated goods bears to the value ofthe goods before the damage or deterioration. Now If theargument of counsel for the petitioner was correct that rateof duty is to be that which is chargeable when the (roodsenter the territorial waters, this will come in conflict withsection 22 (2) which provides for charging proportionate duty. Evidently Section 22 beconies unworkable if theargumentof the petitioners was accepted that the rate ofduty should be that which is prevalent at the time whengoads enter the territorial waters. On this argument thequestion of further rebate on goods in warehouse could not arise because the import must on that argument be leernedto have been completed much earlier. The only way Section22 becomes workable is on the argument of respondentsthat import is not completed for fiscal purposes till thegoods are off-loaded and become apart of the mass of goodson the main land. ( 38 ) SECTION 23 which provides for remission of dutywhere goods are lost before clearance for home consumptionevidently contemplates a situation not only where theship containing the goods had entered the territorial watersbut also where the goods had been kept in a warehouse butwere destroyed thereafter. Thus this provision also contemplatesgiving remissionmuch after the ship had crossedthe territorial waters of India. This illustration also goescounter to the meaning sought to be given to the word 'import'by the counsel for the petitioners. ( 39 ) REFERENCE to Section 125 (2) is of no assistance because all that it lays down is that a person will be liable topay duty even if fine is imposed in lieu of confiscation ofgoods. This illustration also goescounter to the meaning sought to be given to the word 'import'by the counsel for the petitioners. ( 39 ) REFERENCE to Section 125 (2) is of no assistance because all that it lays down is that a person will be liable topay duty even if fine is imposed in lieu of confiscation ofgoods. All that it means is that where the goods are liableto confiscation the officer may instead impose a fine in lienof confiscation but that would not absolve the person frompaying the duty with respect to those goods. This has beenprovided out of abundant caution so that it may not be ursed that by paying the fine or by ccnfiscation a demand ofduty is not permissible. ( 40 ) AS a result of the above discussion we find no meritin the contention of the counsel for the petitioners. We areof the view that the time of import of goods and the time fortaxability of goods must not be taken to be coextensive andto coalesce at the same time. It may be that the goods areimported in the sense of bringirg them within India whichincludes territorial waters of India. It is true that the momentship with goods enters the territorial waters of Indiait would be subject to the control of the custom authoritiesand would also be subject to the provisions of the Customsact and the provisions of prohibition and other restrictionsplaced on the import and the manner of import of thosegoods. But entry in the territorial waters, though amounting to import yet will not for fiscal purposes, determine thedate and time for the purpose of calculating the rate of dutywhich is leviable under the Customs Act and for which wehave to look to Section 15 of the Act. But entry in the territorial waters, though amounting to import yet will not for fiscal purposes, determine thedate and time for the purpose of calculating the rate of dutywhich is leviable under the Customs Act and for which wehave to look to Section 15 of the Act. ( 41 ) WE would, therefore, hold as follows : (a) that for the purpose of calculating the rate ofduty leviable on the goods imported, the rateof duty applicable to such imported goods shallbe the rate on the dates mentioned in Section15; (b) the date for calculation of the rate of duty isnot the date when the ship carrying the goodsenters the territorial waters but is the date in the context of the various circumstances mentioned andspecified in Section 15 of the Act:and (c) that the modification of the earlier total exemptionnotification dated 15-3-1979 by the laterpartial exemption notification of 16-10-1980was in public interest and to subserve publicgood and is not liable to any constitutional orlegal challenge. ( 42 ) AS a result, the petitions fail and are dismissed withcosts. The respondentsl Union of India will have costs ofpetitions which we assess at Rs. 1,000 in each petition. ( 43 ) AS the writ petitions are being dismissed the interim orders permitting the petitioners to import goods withoutpaying the duty asked for by Customs Authorities are herebyrecalled and vacated. The respondents are at libertyto. take any appropriate steps as advised to realise theamount of duty from the petitioners in terms of the bondandlor bank guarantee and to encash the same which werefurnished to them in pursuance of this court's order or to9 HCD/83 4proceed against them for recovery in any way as is leanedproper. ( 44 ) WE having regard to the general policy of the State and with special reference to Article 39 (a) of the Constitutionof India feel that some part of this cost being awardedto the Union of India should be given to a legal aidsociety. We would, therefore, direct that out of Rs. 1. 000cost awarded to the Union of India Rs. 250 will be givento the Indian Council of Legal Aid and Advice (110, Supremecourt Chambers) of which Mr. Daniel Latifi is the-Chairman. We would, therefore, direct that out of Rs. 1. 000cost awarded to the Union of India Rs. 250 will be givento the Indian Council of Legal Aid and Advice (110, Supremecourt Chambers) of which Mr. Daniel Latifi is the-Chairman. Such a course has the approval of the Supremecourt in Priya Wart B. K. Dubaldhan and Others v. Stateof Haryana and Others (1982), II SCC 142 (25) and State ofmaharashtra v. G. A. Patre and ors. (1982) II SCC 447- (26 ). ( 45 ) PER KHANNA, J. "--The significant question posed inthis batch of writ petitions is when the taxable event in thematter of levy of custom duty on the import of goods takesplace under the Customs Act, 1962. Corelated and incidentalthereto is whether the import and the taxable eventmust coincide and be co-extensive. This is more so whensection 2 (25) of the Customs Act defines "imported goods,"as to mean any goods brought into India from a place outsideindia but does not include goods which have been clearedfor home consumption. Thus once the imported goodsare cleared for home consumption and become part of themass of goods in the country, they cease their character asimported goods. It, however, remains to be ascertained atwhat stage they became and for how long they remainedimported goods before they mingled with the mass of goods. ( 46 ) THE Customs Act 1962 has consolidated and amendedthe law relating to customs. The term "import' has beendefined in Section 2 (23) as to mean bringing into Indiafrom a place outside India. The description of "india" onits part includes the territorial waters of India vide Section2 (27 ). Sub-section 2 (28) next defines "indian customswaters" as00 to mean the waters extending into the sea upto thelimit o fcontiguous one of India. . under section 5 of theterritorial Waters, Continental Shelf,. Exclusive Economiczone and other Maritime Zones Act; 1976, and includesany bay, gulf, harbour, creek or tidal river. Another importantinclusive definition is given in sub'-section 2 (22) of"goods" so as to cover vessels, aircrafts' stores,' baggage etc. Thus even vessels and aircrafts, are treated as goods, andwhen they come from any place outside India and are notcleared for home consumption, they acquire and retain thecharacter of "imported goods". Another importantinclusive definition is given in sub'-section 2 (22) of"goods" so as to cover vessels, aircrafts' stores,' baggage etc. Thus even vessels and aircrafts, are treated as goods, andwhen they come from any place outside India and are notcleared for home consumption, they acquire and retain thecharacter of "imported goods". ( 47 ) A plain reading of these provisions do lead to theinference that the legislature has very much broadened thescope of imported goods from what is commonly and inordinary parlance understood. Thereby not only thosegoods which are intended for and actually brought on theland mass of the country and cleared for home consumption,are treated as goods imported, but their very bringinginto India including its territorial waters renders them "importedgoods". Rather the clearance for home consumptionmakes them to loose the imported character. ( 48 ) SECTION 12 of the Act which is of considerable significance,and on which much emphasis has been laid fromthe side of the petitioners, reads as under : - "12. Dutiable goods : (1) Except as otherwiseprovided in this Act, or any other law for thetime being in force, duties of customs shall belevied at such rates as may be specified underthe (Customs Tariff Act, 1975 ). 07 any otherlaw for the time being in force, on goods importedinto, or exported from India. (2) The provisions of sub-section (1) shallapply in respect of all, gox?ds belonging to Governmentas they apply in respect of goods, notbelonging to Government. " ( 49 ) THESE provisions thus lay the base for the levy ofcustom duty and open the goods to chargeability on theirimport into or export from India. The Section is, however. subject to other provisions contained in the Act or/any other law for the time being in force. ( 50 ) SECTION 15 next on which the Union of India andthe custom department have primarily placed reliance inturn, reads as under : "15. The Section is, however. subject to other provisions contained in the Act or/any other law for the time being in force. ( 50 ) SECTION 15 next on which the Union of India andthe custom department have primarily placed reliance inturn, reads as under : "15. Date for determination of rate of duty and tariffvaluation of imported goods : (1) The rate of duty and taritf valuation, if any,applicable to any imported goods, shall bethe rate and valuation in force : - (a) in the case of goods entered for home consumptionunder section 46, on the date onwhich a bill of entry in respect of suchgoods is presented under that section; (b) in the case of goods cleared from a warehouseunder section 68, on the date onwhich the goods are actually removed fromthe warehouse; (c) in the case of any other goods, on the dateof payment of duty :provided that if a bill of entry has been presentedbefore the date of entry inwardsof the vessel by which the goodsare imported, the bill of entry shall bedeemed to have been presented on thedate of such entry inwards. (2) The provisions of this section shall not apply to baggage and goods imported by post. " . ( 51 ) THESE provisions thus elaborate the stage at whichthe rate of duty and tariff valuation are to be determined. They lay down the time factor for the rate at which the dutyis to be computed and when it is to be levied. Earlier Section14 elaborates in what manner the valuation of goodsfor purpose of assessment of custom duty has to be arrivedat. The actual assessments are effected under Sections 17,18 and 19. ( 52 ) THERE are next a large number of Sections in thecustoms Act which provide for exceptions to the levy ofcustom duty as envisaged by Section 12. Section 25 (1)itself empowers the Central Government if satisfied in publicinterest, to exempt generally either absolutely or subject tosuch conditions as may be specified in the notification, goodsof any description from the whole or any part of duty ofcustoms leviable thereon. Sub-section (2) of this Sectionat the same time empowers the Central Government toexempt from payment of duty under circumstances ofexceptional nature to be stated in such order, any goods onwhich duty is otherwise leviable. Sub-section (2) of this Sectionat the same time empowers the Central Government toexempt from payment of duty under circumstances ofexceptional nature to be stated in such order, any goods onwhich duty is otherwise leviable. The former powers thuscover goods in general of particular type while the latter isexercisable with respect to specified individual goods. ( 53 ) SECTION 13 exempts imported goods from levy of dutyif they are pilferred after unloading, but before clearance forhome consumption. Section 20 provides for the bringingback or import of goods which had been earlier exportedprovided the event occurs within a specified period. Derelict,jetsam, flotsam and wreck are dealt with by Section 2. 1. In case imported goods get damaged or deteriorated, appropriaterelief can be granted under Sect'on 22. The remissionof duty on lost, destroyed or abandoned imported goodsis looked after by Section 23. Similarly Section 24 providesfor denaturing or mutilation of imported goods. ( 54 ) THE person-in-charge of a conveyance [which termincludes a vessel, an aircraft and a vehicle as per section2 (9)1 carrying importted goods is required within 24 hoursafter arrival at a custom station to deliver to the properofficer an import manifest and subscribe to a declarationas to the truth of its contents. The Import Manifest (Vessels) Regulations Act, 1971 requires declaration of allcargo carried by the conveyance in such import manifest,and this is irrespective of whether the cargo is to be landedthere or to be transhipped or retained. Section 31 ofthe Customs Act next prohibits the unloading of any importedgoods by any master of vessel until an order has beengiven by a proper officer granting entry inwards to suchvessel. Such entry inwards in turn can not be given untilan import manifest has been delivered or the proper officeris satisfied that there was sufficient cause for non-delivery. The unloading and loading besides have to be done at approvedplaces only and not on holidays, and under supervisionof custom officers vide Sections 33,34 and 36. Theproper officer is further empowered to board the vessels,aircrafts. etc. , and require production of documents and askquestions with regard to the goods so imported vide Sections37 and 38. ( 55 ) CHAPTERS VII, VIII, IX and XI of the Act makefurther provisions in what circumstances the custom dutyis or is not leviable. Theproper officer is further empowered to board the vessels,aircrafts. etc. , and require production of documents and askquestions with regard to the goods so imported vide Sections37 and 38. ( 55 ) CHAPTERS VII, VIII, IX and XI of the Act makefurther provisions in what circumstances the custom dutyis or is not leviable. They provide for custody erf the importedgoods until cleared for home consumption or warehousedor transhipped (Section 45), presentation of bill ofentry for home consumption or warehousing with regard togoods other than those intended for transit or transhipment (Section 46), clearance of such goods for home consumptionafter payment of import duty (Section 47), sale of goadsnot so cleared or warehoused within a specified time, by theproper officer (Section 48), storage of imported goods inwarehouse (Section 49), non-charging of duty on thosegoods imported into a customs port which are mentionedin the import manifest as meant for transit or transhipmentto any port outside India (Sections 53 and 54), the portwhich has to be treated as port of first importation in caseswhere the vessel touches different ports in India as well aswhen goods are transported by land to another port (Sections 55 and 56), appointment of public and private warehousing,the mode of deposit of goods there and the periodfor which they can be kept there and their control by theproper officers (Sections 57 to 62 ). Section 68 which isof some significance, may next be reproduced here :"68. Clearance of warehoused goods for home consumption :the importer erf any warehoused goods may clearthem for home consumption if (a) a bill of entry for home consumption in respectof such goods has been presented inthe prescribed form; (b) the import duty leviable on such goads, andall penalties, rent, interest and other chargespayable in respect of such goods have beenpaid; and (c) an order for clearance of such goods forhome consumption hasbeen made by theproper officer. " ( 56 ) CHAPTER XI contains provisions with. regard tobaggage carried by owners. Stores imported in a vessel oraircraft and meant for use and consumption in the vessel ortransfer to another vessel are exempt from payment of duty (Sections 86 and 87 ). ( 57 ) CHAPTER XIV contains provisions for confiscation of improperly imported goods, and elaborates in what circumstancesimported goods can be treated as such. Even anattempt to improperly import has been made penal. ( 57 ) CHAPTER XIV contains provisions for confiscation of improperly imported goods, and elaborates in what circumstancesimported goods can be treated as such. Even anattempt to improperly import has been made penal. Section 125 gives an option to pay fine in lieu of confiscation. However,such payment of fine does not absolve the payment of duty and othercharges otherwise leviable. ( 58 ) THESE various provisions of the Act have been referred to in some details in order to show that its schemeendeavours to meet different contingencies in which customsduty can still not be levied though the goods otherwise aretreated as "imported goods". This had to be done in viewof the very wide definition of "goods", "import". "importedgoods", "india", "indian customs waters" given in Section2 as referred to above. Thereby the import purports totake place the moment the goods enter India including itsterritorial waters. They have to be characterised fromthence on as imported goods. This situation ex facie appearsrepulsive and irreconcilable to what is commonlyunderstood as import with implication of importing intotndia for being made part of the mass of goods in the country. A. ship may be carrying large cargo, a part of whichalone is cleared in one err the other port in India, while thebulk is carried away to a third country. A ship can :aswell stray into Indian waters without berthing or an aireraftfly over part of Indian space without landing. By no stretehthey would appear to import the goods into India. It wouldalso appear fantastic that a vessel or an aircraft bringinggoods to India, can itself be treated as imported goods asthey in any case, have to sail of or fly away. However,the definitions of the terms "goods", "import", "importedgoods" and "india" would (end to bring them all in the realof imported goods. It was as such that in Shri Ramlingamills Private Ltd. and others v. Assistant Collcetor of customsand others, 1983 E. L. T. 65 (Kerala ). it was observedthat to interpret the words Import' and 'export' literallywould cause even to the goods in transit subjected to taxon arrival and departure at every intermediate station, whichwould cause not only inconvenience and confusion but would result in an inordinate delay and unbearable burdenon the trade. The term 'import' is derived from the Latinword 'importare' levicologically does not have reference togoods in transit. It generally contemplates pause and reposeof goods. The term 'import' is derived from the Latinword 'importare' levicologically does not have reference togoods in transit. It generally contemplates pause and reposeof goods. The test is the intention with which thegoods are brought in. In K. R. Ahmed Shah v. Additionalcollector of Customs, Madras and others,-1981. E. L. T. 153 (27) (Madras), it was as well observed that it is well settledlaw that unless goods brought into the country for thepurpose of use, enjoyment, consumption, sale or distributionare incorporated in and got mixed up with the totality of theproperty in the country, they cannot be said to have beenimported. As such it cannot be said the moment the aircraftpasses through the country or a ship enters the territorialwaters, an importation takes place. Importation canonly be when the goods cross the customs barrier. In K. Jamal Co. v. Union of India, 1981 E. L. T. 162 (Madras)also the word "import" in Section 2 (23) has been interpretedto mean bringing into India for purpose of clearanceof goods. Similarly in Prabhat Cotton and Silk Mills Ltd. v. Union of India, 1982 E. L. T. 203 (Gujarat) (28), it wastaken note that Section 12 ibid refers to "exportation fromor importation into" of goods with reference to landmass ofindia and not with reference to the territorial waters ofindia. Had it been not so, "importation into India" wouldmean that customs duty would be payable even if the shipwere to stray in territorial waters, of when the ship entersthe territorial waters changes its course, turns back andleaves the territorial waters before landing the goads onthe landmass of India. In 1981 E. L. T. 298, the view thatthe goods get imported when they enter the sea waters ofindia, was termed as absurd. ( 59 ) THE farmers of the Act. it seems, were not oblivious of such piquant situations, and. therefore, proceeded tointroduce a large number of other provisions in the Act toadequately meet and look after all such incidents. Therebythe wide amplitude of the aforesaid terms and their sweepingeffect have been amply curtained and rendered practicablewhen it comes to the stage of levy of customs duty. Thusthe goods in transit or for transhipment, or which are juststores meant for use in the ship itself, are not made liableto duty. Therebythe wide amplitude of the aforesaid terms and their sweepingeffect have been amply curtained and rendered practicablewhen it comes to the stage of levy of customs duty. Thusthe goods in transit or for transhipment, or which are juststores meant for use in the ship itself, are not made liableto duty. They though technically speaking, can be termedas imported goods, are still immune from the levy of customsduty because ultimately they do not fructify in becomingpart of the mass of goods in the country. The shipand the aircraft too have not to remain in India, but haveto move away, and, therefore, the moment they leave Indiaand its territorial waters, they cease to retain the characterof imported goods. It can be that contingencies so elaboratein the Act may not meet all eventualities as human ingenuityor situations may take unfathomed course. However,the determination of their precise nature and theirchargeabillty to duty may have to be ultimately dependenton whether they get cleared for house consumption or becomepart of the mass of the goods. Analogous considerationscan then be invoked in the context of specific provisionsexisting in the Act. ( 60 ) IT further seems that the Legislature has in its wisdom and not without purpose, introduced these wide definitionsin the Customs Act in order to leave no loopholes and tomeet varied and subtle attempts and acts to smuggle goodsinto India, and thus frustrate the possible setting up oftechnical defences when the imports take place. A vesselor a motor-boat may enter Indian territorial waters withprohibited and other goods for landing them at places otherthan customs station (which means any customs port, customsairport or land customs station vide Section 2 (13 ). In case they are caught by the customs authorities within theterritorial waters, but before they have reached the land-mass, they can as well plead that they had just strayed inand were otherwise taking the goods elsewhere, and, therefore,they cannot be treated as imported goods'. They mayas well like to dump the goods into sea finding that theycannot escape being caught. There may similarly be variousother happenings. Extensive territorial waters thus can be-fariously be exploited by all sorts of elements with immunity. The authorities may as well find it extremely difficultto rope them in clutches, of law if the narrow definition ofimport as to synchronise with the stage of actual minglingwith the mass of the goods or ready for clearance for homeconsumption is allowed to prevail. Extensive territorial waters thus can be-fariously be exploited by all sorts of elements with immunity. The authorities may as well find it extremely difficultto rope them in clutches, of law if the narrow definition ofimport as to synchronise with the stage of actual minglingwith the mass of the goods or ready for clearance for homeconsumption is allowed to prevail. . ( 61 ) THE Bombay High Court has thus in the case ofm. S. Sawhney v. Messrs. Sylvania and Laxman Ltd. ,1975 The Bombay Law Reporter 380, taken the view thatimport takes place when the goods are brought into theterritorial waters of India. However, the learned Judgesfurther proceeded to observe that there was nothing in thecustoms Act which indicated that the chargeability waspostponed until a bill of entry was presented. It is withregard to these letter observations that, with respect, it mustbe said that the impact of the provisions contained in Section15 of the Act has not been properly construed. Theseprovisions do not relate entirely to the limited assessmentaspect of chargeability. The latter is taken care of bysections 17 to 19. The scope of Section 15 is much largeras it provides the time factor when the duty is to be leviedand at what stage the actual computation of the duty andtariff valuation has to take place. Section 12 itself is subjectto the provisions contained in Section 15 when it startswith "except as otherwise provided in this Act". Theseprovisions thus have a sort of prevailing effect over Section12.- ( 62 ) THE concept, of chargeability about which Section12 lays the base, is given effect to and brought into actualityunder Section 15. For all intents and purposes, the implementationof chargeability and the taxable event take placeunder Section 15. It is at this stage that the customs dutygets levied, and the Section leaves no misgivings that thedate for determination of rate of duty and tariff valuation iswhen its provisions are given effect to. It cannot be relegatedto the position of a machinery section for the purpose ofassessment. It' brings out substantively the stage and timefactor when the duty is charged, and which particular rateshould be applied. My learned brother in this regard hasextensively dealt with the case law. the contentions raisedand the position of law under the Customs Act, 1962. Iwholly agree with him. The subsequent decision of thebombay High Court in the case Synthetics and Chemicalsltd. It' brings out substantively the stage and timefactor when the duty is charged, and which particular rateshould be applied. My learned brother in this regard hasextensively dealt with the case law. the contentions raisedand the position of law under the Customs Act, 1962. Iwholly agree with him. The subsequent decision of thebombay High Court in the case Synthetics and Chemicalsltd. v. S. C. Coutinho and others, 1981 E. L. T. 414 (Bombay), recognised that the duty as in existence on thedate of the clearance of the goods is liable to be paid. Mylearned brother has at the same time rightly observed thatthe distinction drawn by this decision from the Silvania'scase (supra) whether there existed total exemption or not. can as well not be sustained. ( 63 ) REFERENCE from the side of the petitioners to thesupreme Court decision in the case M!s. Universal Importsagency and another and M/s. Victory Traders v. The Chiefcontroller of Imports and Exports and others, AIR 1961supreme Court 41, 29 wherein it was observed that a purchaseby import involves a series of integrated activitiescommencing from the contract of purchase with a foreignfirm and ending with the bringing of the goods into theimporting country, and the purchase and resultant importform parts of a same transaction, cannot be of much availto them as here we are dealing with specific provisions containedin the Customs Act, 1962 which leave no matter ofdoubt that irrespective of when the goods are treated asimported goods. , the stage and time for chargeability is undersection 15. ( 64 ) THE fact that the incidence of import has no bearing ultimately on the incidence or quantum of duty levied undersection 15 is substantially dealt with by the Supreme Courtin the case M;s. Prakash Cotton Mills " (P.) Ltd. v. B. Senand others, AIR 1979 S -. ipreme Court 675 when followingobservations were made :"there is therefore no force in the' argument thatthe requirement of the amended S. 15 shouldhave been ignored simply because the goodswere imported before it came into force, or thattheir bills of lading or bills of entry were lodged before that date"the observations of the Supreme Court in re. ipreme Court 675 when followingobservations were made :"there is therefore no force in the' argument thatthe requirement of the amended S. 15 shouldhave been ignored simply because the goodswere imported before it came into force, or thattheir bills of lading or bills of entry were lodged before that date"the observations of the Supreme Court in re. Sea Customsact, AIR 1963 Supreme Court 1760, that the duties of customsincluding export duties though they are levied withreference to goods, the taxable event is either the import ofgoods within the customs barrier or their export outside thecustoms barriers were again not made in the context ofspecific provisions contained in the Customs Act, 1962 providingfor the stage of levy and computation of customs duty. ( 65 ) THE petitioners have as well made reference to thefollowing observations of the Judicial Committee in Whitneyv. Commissioners of Inland Revenue, (1926) Appeal Cases37 (30), at page 52 :"now, there are three stages in the imposition of atax : there is the declaration of liability, that isthe part of the statute, which determines whatpersons in respect of what property are liable. Next, there is the assessment. Liability doesnot depend on assessment. That, ex-hypothcsihas already been fixed. But assessmentparticularizes the exact sum which a personliable has to pay. Lastly, come the methodsof recovery, ?'f the person taxed does not voluntarily pay. "these observations are pertinent and there can be' no quarrelwith them. However, under the Customs Act, 1962 asalready noted above, the incidence of chargeability to duty, arises under Section 15 itself, and the s. ame cannot be treatedas a mere machinery provision for effectuating the assessment. ( 66 ) SUBJECT to these observations. I entirely agree withthe wellconsidered judgment delivered by my learned brother. SACHAR, J. ( 1 ) THIS petition along with a bunch of petitions will be disposed of by this common judgment as mostof the points raised are common, where necessary, we shalldeal with a particular petition separately. ( 2 ) THE petitioners challenge the action of the respondentsin demanding the duty of custom on consignment of PVCResin imported by the petitioners. ( 3 ) PVC Resin is classified under Chapter 39 of 1st Schedule to Customs Tariff Act. 1975 and falls under headingno. 39. 01 0. 6 and the rate of duty indicated therein is100 per cent. However, in exercise of powers under Section25 (1) of the Customs Act. ( 3 ) PVC Resin is classified under Chapter 39 of 1st Schedule to Customs Tariff Act. 1975 and falls under headingno. 39. 01 0. 6 and the rate of duty indicated therein is100 per cent. However, in exercise of powers under Section25 (1) of the Customs Act. Central Government had issueda notification dated 15-3-1979 exempting the PVC Resinwhen imported into India, from the whole of the duty ofcustom leviable thereon which is specified in the First Schedule. This notification was stated to remain in foice uptoand inclusive of 3 1-3-1981. ( 4 ) HOWEVER, on 16-10-1980 another notification wasissued under Sub-Section (I ) of Section 25 of the Customsact in supersession of the earlier notification of 13-3-1079by which the Central Governnment exempted PVC Resinwhen imported into India from so much of the duty ofcustom leviable as is in excess o i 40 pci cent ad valo e i". The result of this notification was to impose a duty of 40 percent on imports of PVC Resin from that date onwards. ( 5 ) THE petition states that the petitioner had placedindent some time in July, 1980 for the import of PVC Resin. The ship arrived at Sandheads (which is within the terrtorialwaters of India) on 7-10-1980. The Import General Manifestin respect of the said vessel was filed with the Customsauthorities on 7-10-1980. The Bill of Entry for Homeconsumption was filed on 13-10-1980. Permission wasobtained by the petitioner to store the goods in the warehousepending clearance. The Bill of Entry inwards is dated23 -. 10-1980. The petitioners when they went to clear thegoods sometimes about 21/10/1980 were asked topay duty of Custom, of 40 per cent 5 per cent pluscountervailing 45 per cent plus special 5 per cent on countervalling. The demand was created because the respondents stand was that in view of notification dated 16-10-1980 dutyof custom at 40 per cent was payable, as the goods wereadmittediy being cleared affter that dale, when the aboverate of duty was leviable. The petitioners challenge thisdemand for payment of 40 per cent duty of custom. ( 6 ) THE main thrust and stress in the petition was thatacting on the representation made in the notification of15-3-1979 which was originally stated to remain in forceup to 31-3-1980. (But which by means of further notificationdated 25-3-1980 substituted for 31-3-1980 the words. The petitioners challenge thisdemand for payment of 40 per cent duty of custom. ( 6 ) THE main thrust and stress in the petition was thatacting on the representation made in the notification of15-3-1979 which was originally stated to remain in forceup to 31-3-1980. (But which by means of further notificationdated 25-3-1980 substituted for 31-3-1980 the words. figures and letters 31-3-1981), the petitioner had placedorders for import of PVC Resin in July, 1980 and that itwas not permissible for the respondents union of India, nay. it was estopped to supersede the notification of 15-3-1979of total exemption by the notification of 16-10-1980 whichonly gave partial exemption From the payment of duty ofcustom as is in excess of 40 per cent. The notification of16-10-1980 was, therefore, claimed to be illegal and a clamto import goods without payment of duty of custom wasasserted as being vested in the petitioner. Point No. 1 : Is plea of promissory estoppel maintainable ? ( 7 ) A similar plea of promissory estoppel raised inanalogous circumstances was rejected by a Division Benchof this Court in M/s. Super Traders vs. U. O. I. (1983) ELT258 (1), wherein one of us (Sachar J.) speaking for thecourt observed : "these arguments proceed on misunderstanding ofthe role of importance of Import and Exportpolicies of a State. In the matter of importand export no party can claim any vested rightto compel the Government or the legislature torefrain from making any changes during thefinancial year. This is because the position of -foreign exchange varies so much and therequirement and the considerations of nationaleconomy are so urgent that it would be tresspassingon the legislative and administrativefield if courts were to hold that a rate of dutyor tax was immutable for any particular period. "it was also held that these arguments amount to pleadingpromissory estoppel against the legislature which is impermissible. ( 8 ) AGAIN a Division Bench of this Court in Khandelwalmetal and Engg. vs. Union of India and Ors. (1983) ELT292 (2) decided on 19-10-1. 982 held that the fact that thepower has been delegated to the Executive to issue a notificationunder Section 25 (1) does not convert that powerinto an Executive or Administrative power and that such anexercise of power is an exercise of legislative power and noestoppel can be pleaded against a Statute. (1983) ELT292 (2) decided on 19-10-1. 982 held that the fact that thepower has been delegated to the Executive to issue a notificationunder Section 25 (1) does not convert that powerinto an Executive or Administrative power and that such anexercise of power is an exercise of legislative power and noestoppel can be pleaded against a Statute. ( 9 ) THIS matter was considered again by a Full Bench ofthis Court in Bombay Conductors and Electricals Ltd. vs. Sh. K. Chandramouli, C. W. 129511980 decided on 3-3-1983 (3)". The Full Bench has taken the same view as thei. L. R. (1983) I DELHI 487. earlier Division Benches and has held that a notificationunder sab-section (1) of Section 25 is a legislative order andagainst the Statutory notifications issued from time to timeunder Section 25 (1), estoppel cannot be pleaded becauseof the theory that against the operation of the Statute therecan be no estoppel. Point No. 2: Is the Notification of t6-10-1980 issued in thepublic interest " ( 10 ) THE next argument is that no public interest is servedby the 16-10-1980 notification superceding the earliernotification by which the which of custom duty lias beenexempted. There are a series of hurdles for the petitionersto succeed in this plea. This argument is really the sameas that of plea of promissory estoppel, though put in adiherent manner. We have already held that order undersection 25 (1) is legislative in character and there can beno estoppel against the statute. If that be so how can thecourt be asked to examine the question of public interest. The argument of lack of public interest is really an argumentthat there is improper motive in this legislative order. Thisscrutiny is not for the court, for it is well settled that it isvery important to notice that if the legislature is competentto pass the particular law. the motives which impel it to passthe- law are reallyirrelevant. . . . . . . . . . . . . . . malice ormotive is beside the point, and it is not permissible to suggestparliamentary incompetence on the score of mala fides . (See R. S. Joshi V. Ajit Mills: AIR 1977 SC 2279 (4)par;i 16 ). ( 11 ) THAT the invocation of public interest to compel the-continuance of total exemption notification of 15-3-1979 ismisconceived, and it has been so held in the Bombay Conductorscase (supra.), where Avadh Behari. (See R. S. Joshi V. Ajit Mills: AIR 1977 SC 2279 (4)par;i 16 ). ( 11 ) THAT the invocation of public interest to compel the-continuance of total exemption notification of 15-3-1979 ismisconceived, and it has been so held in the Bombay Conductorscase (supra.), where Avadh Behari. J. speaking forthe Court observed : "now if the Central Government in public interestdecides to grant exemption at one moment andcd/83 2decides to withdraw it at another the court cannotcompel it to continue the exemption beyondthe time it (the Government) thinks necessaryin public interest to do. This applies to thepower to issue notifications whether they aretimebound or not". NEXT limb of the argument is that the considerations whichweighed with the Central Government in issuing notificationof 16-10-1980 are not germane to public interest. Thisargument asks the court to substitute its opinion for that ofcentral Government to which the statute has entrusted it,which is impermissible. As said by one of us (Sachar, J.)in Supar Traders case (supra) that "the Courts are notconcerned with the wisdom and expediency of a policy. Their concern is the legality of the action. Once the legislationor the executive action steers clear of constitutionalor legal prohibitions it must be allowed to experiment withany administrative policies which are felt in the circumstancesto best serve the public interest. We must not forget thatas to what duty is to be imposed are matters of administrativepolicy with which the Courts have no concern for the simplereason that they do not have the expertise nor possess allrelevant information. " "it is not the province of the judiciary to inquirewhether the excise is reasonable in amount orin respect to the property to which it is applied. Those are matters in respect to which the legislativedetermination is final. "[vide Patton v. Brady : (184 U. S. 608) (5)1. ( 12 ) ESTOPPEL cannot be invoked where the result will beto compel the Government to continue the exemption whicha competent enactment has validly authorised the executiveto withdraw in the public interest at any time. In publicinterest exemption can be granted. In public interest exemptioncan be rescinded" [see Bombay Conductors case (supra)! ( 13 ) IN that view, as observed above, it is really unnecessaryto examine the circumstances from which the Centralgovernment was satisfied that it was necessary in the publicinterest to issue the notification of 16/10/80. In publicinterest exemption can be granted. In public interest exemptioncan be rescinded" [see Bombay Conductors case (supra)! ( 13 ) IN that view, as observed above, it is really unnecessaryto examine the circumstances from which the Centralgovernment was satisfied that it was necessary in the publicinterest to issue the notification of 16/10/80. In thatcontext there would be no infirmity as was sought to beurged by Mr. Gokhle, the learned counsel appearing in oneof the Civil Writ petitions, to the effect that no facts hadbeen placed in justification of the later notification whichdealt with the item , unlike PVC Resin which is theitem imported in most of the writ petitions. Bui neverthelessmr. Wadhwa the learned counsel for the Unionof India, stated that consideration was given in detail bythe Central Government when issuing the impugned notificationin the same manner as was done when issuing theimpugned notification of 16110180 dealing with PVC Resin. As a matter of fact detailed justification is given in the replyof Union of India to support its action in having issued theimpugned notification of 16110180. Thus in denying theallegation made in the writ petition C. W. 150811980 thatthere was no new things or supervening circumstances whichcould form the basis for justifying the withdrawal of earliernotification of 15-3-1979 and that no public interest wasserved by the subsequent notification of 16-10-1980, it isexplained in the reply that the original notification of15-3-1979 had given full exemption from the payment ofduty of custom because at that time international priceswere high and this was done to enable the indigenous processingindustries to get imported material. But sometimein the middle of 1980 international prices of resins includingp. Chloride registered a fall and it was found that theaverage Cl prices had gone down from 950 dollars in June1980 to 700 dollars in July 1980. But even then indigenouspvc was being priced at a level much higher than the landedcosts. In order to give protection to the indigenous industriesagainst the anti-dumping from multi-nationals abroadfull exemption notification was notified by only giving partialexemption. Even then it was found that the difference between the landing costs at the old rate of duty and thethen existing ex-factory price of India was around Rs. 4,500prior to the duty charged in October, 1980. In order to give protection to the indigenous industriesagainst the anti-dumping from multi-nationals abroadfull exemption notification was notified by only giving partialexemption. Even then it was found that the difference between the landing costs at the old rate of duty and thethen existing ex-factory price of India was around Rs. 4,500prior to the duty charged in October, 1980. Similar exerciseswere also done in earlier years and it is pointed outthat whereas prior to November, 1977 duty of custom was60 per cent it was reduced to 30 per cent upto March 1978. It was 100 per cent from 1-4-1978 to 26-7-1978 and was60 per cent thereafter upto 14-3-1979, then was 40 per centsubsequent to 16-10-1980. Split up of price shown forthe month of July and August, 1980 shows that the totalprices for the indigenous PVC resin in September 1979worked out to Rs. 9570 while for the imported PVC it wasrs. 10,960 i. e. a difference of Rs. 1390 in favour ofindigenous resins. In July 1980 the indigenous PVC resin was selling at Rs. 13,330 per tonne while imported PVC wasselling at Rs. 8,800 per tonne, thus creating a difference ofrs. 4530 per tonne in favour of imported resins. Even whilemaking the above changes and after the issue of notificationof 16-10-1980 a difference of about Rs. 800 per tonne wasmaintained in favour of imported resins. These facts aredetailed in support of the plea that public interest requiredpreventing anti-dumping operations from abroad and furtherpublic interest was kept in view by reducing the differencebetween the imported PVC resin and the indigenous priceto a reasonable margin which still permitted the indigenousconsumer to get the imported material either at the priceof domestic material or even from abroad. The petitioners argument seems to suggest as if public interest is only forthe importer so that if he could import PVC as he was doingin, July 1980 with a margin in favour of the imported PVCresin of Rs. 4530 all this benefit should have been allowedto remain. By modifying full exemption public interest is served by state sharing a part of Revenue and yet givereasonable protection to the local industries. Thus evenon the short ground of facts it can not be suggested thatthere was no reasonable ground for the Central Governmentto be satisfied that it was necessary that full exemptionwhich had been granted by 15-3-1979 notification shouldbe modified to provide for partialexemption, as per 16/l0/80notification. Thus evenon the short ground of facts it can not be suggested thatthere was no reasonable ground for the Central Governmentto be satisfied that it was necessary that full exemptionwhich had been granted by 15-3-1979 notification shouldbe modified to provide for partialexemption, as per 16/l0/80notification. Though we have examined the details we mustreiterate that in these matters of policy decision concerninginternational trade and commerce the decision taken by theauthorities concerned must be accepted without demur andcourts should not be expected to launch into the desirability,the economic wisdom, the soundness of monetarists policieswhich are necessarily involved when such decisions are takenby the Central Government, if for no other reason thanthat the court has not the necessary data and material toassess the situation, apart from the question of these policydecisions being beyond the Ken of judicial scrutiny and field,in the absence of any constitutional infilmity. ( 14 ) "the quantum of tax levied by the talking statute,the conditions subject to which it is levied, the manner inwhich it is sought to be recovered, are all matters withinthe competence of the Legislature, and in dealing with thecontention raised by a citizen that the taxing statute contravenesarticle 19 Courts would naturally be circumspectand cautious. " (Vide Rai Ram Kishan v. State of Bihar air 1963 SC 1667 ) (6 ). ( 15 ) AN argument was raised that as it has been allegedthat the withdrawal of total exemption by notification of16/l0/80 was not in the public interest, onus was on therespondent to show that this was in public interest. In ourview the argument is misplaced. There is a presumptionthat official acts have been done bona fide. "if the Governmentdecides an economic policy that import or exportshould be by a selected channel or though selected agenciesthe court would proceed on the assumption that the decisionis in the interest of the general public unless the contraryis shown". (Vide Daruka and Co. v. Union of India : AIR1973 SC 2711 (7) at 2716 ). ( 16 ) MR. Kohli appearing for some of the petitionersmade bold to say that once having issued a notification of15-3-1979 the Central Government was denuded of anypower to issue again a notification like 16-10-1980. whichhad the effect of modifying the total exemption to partialexemption. The argument is understandable. ( 16 ) MR. Kohli appearing for some of the petitionersmade bold to say that once having issued a notification of15-3-1979 the Central Government was denuded of anypower to issue again a notification like 16-10-1980. whichhad the effect of modifying the total exemption to partialexemption. The argument is understandable. It is wellsettled that under the General Clauses Act an authoritywhich has the power to issue a notification has the undoubtedpower to rescind, modify the said notification in the likemanner. Reference to Section 159 by Mr. Kohli only showsthat a notification issued under Section 25 has to be placedbefore each House of Parliament and if both Houses agreein making any modification or both Houses agree that thenotification should not be issued the rule or notification shallhave effect only in such modified form or be of no effectas the case may be. It is not Mr. Kohli s case that thenotification issued on 15-3-1979 or 16-10-1980 did notcomply with the provisions of Section 159. He, however. sought to urge that as the earlier notification of 15-3-1979had not been modified by the Parliament it became immuneand Central Government could not thereafter issue a notificationmodifying the total exemption to partial exemption. It is a strange argument because it is the Central Governmentwhich initiated the earlier notification of 15-3-1979 and itis the same authority later on which is to initiate any subsequentnotifications. The Central Government when issuingnotification under Section 25 (1) is not in any way violatingthe mandate of Parliament because in fact the power toissue a notification under Section 25 (1) is a delegation ofthe legislative power given to the Central Government, andin any case the notifications were placed before the Parliament. It is not suggested that any modification was madein the notification issued on 16-10-1980. by the Parliament,as originally issued by the Central Government. This partof the contention of the petitioner, therefore fails. POINT No. III: What is the date applicable for rate ofduty for imported goods. ( 17 ) FACED with this situation Mr. Thakur and Mr. Rana,counsel for the petitioners (in C. W. 1507 and 1508/ 1981)made the alternative plea, their main plank of attack. It is urged that as the ship bringing the imported goodsentered the territorial waters on 7-10-1980, the chargeableevent occurred on that date. ( 17 ) FACED with this situation Mr. Thakur and Mr. Rana,counsel for the petitioners (in C. W. 1507 and 1508/ 1981)made the alternative plea, their main plank of attack. It is urged that as the ship bringing the imported goodsentered the territorial waters on 7-10-1980, the chargeableevent occurred on that date. The next limb in the argumentis that as the notification of 15-3-1979 granting full exemptionfrom the levy of duty of custom, was continuing onthat date the rate of duty payable by them must be judgedwith reference to that date i. e. 7-10-19so, which is obviouslynil. It is the validity of this argument so strenously convassedbefore us by Mr. D. D. Thakur and Mr. Rana, that has nowto be examined. ( 18 ) SECTION 12 of the Customs Act provides that exceptas otherwise provided in the Act. . . . . . . . duty of Customshall be levied at such rates as may be specified under thecustoms Tariff Act. A reference to the Tariff Act showsthat the goods imported by the petitioners are covered underheading 39. 01/0. 6 of the First Schedule to the Tariff Act. The rate of duty is 100 per cent. Section 25 (1) however. empowers the Central Government to exempt goods of anydescription from the whole or any part of duty of customleviable thereon. As mentioned above the original notificationof 15-3-1979 exempted the goods from the whole ofduty of Custom leviable thereon. This. however, underwenta change and by the notification of 16-10-1980 the duty ofcustom leviable is now 40 per cent. The ship carrying theconsignment for the petitioner entered the territorial waterson 7-10-1980. The Bill of Entry, however, bears an endorsementof Entry inwards on 23-10-1980: the goods weresought to be removed from the warehouse subsequently. It is not disputed by the counsel for the respondents thatif goods had been removed from the warehouse earlier to16-10-1980 there could have been no demand for duty ofcustom. On their side it is conceded by the counsel forthe petitioners that if ship carrying the goods had enteredthe territorial waters after 16-10-1980 the same would haveto bear levy of duty of custom at 40 per cent in terms of16-10-1980 notification. On their side it is conceded by the counsel forthe petitioners that if ship carrying the goods had enteredthe territorial waters after 16-10-1980 the same would haveto bear levy of duty of custom at 40 per cent in terms of16-10-1980 notification. But the counsel for the petitioners,contend that the moment the ship entered the territorialwaters on 7-10-80 the importation took place and wascomplete and the rate of duty of custom leviable is thatprevailing on that date, which because of notification dated15-3-79 of full exemption would be Nil (duty ). Supportfrom this contention is sought from Section 2 (23) of Actwhich defines "import to mean bringing into India from aplace outside India" and Section 2 (27) which defines India "to include the territorial waters of India". This argumentproceeds on the assumption as if the Act gives no indicationas to how to determine the date for rate of duty. Ratherthe contrary. The Act specifically fixes a date for determinationof rate of duty. . . . . . of imported goods, in Section 15of the Act which reads as under : "date for determination of rate of duty and tariffvaluation of imported goods. (1) The rateof duty and tariff valuation if any, applicableto any imported goods, shall be the rate andvaluation in force, : (a) in the case of goods entered for home consumptionunder Section 46, on the date onwhich a bill of entry in respect of such goodsis presented under that section; (b) in the case of goods cleared from a warehouseunder Section 68, on the date on which thegoods are actually removed from the warehouses ; (c) in the case of any other goods, on the dateof payment of duty;provided that if a bill of entry has been presentedbefore the date of entry inwards of the vesselby which the goods are imported the bill ofentry shall be deemed to have been presentedon the date of such entry inwards. (2) The provision of this section shall not apply tobaggage and goods imported by post. "( 19 ) IN terms of Section 15 as the goods could obviouslybe cleared only after 23-10-80 the date of Entry inwardson Bill of Entry, the rate of duty applicable must be determinedwith reference to that date. which evidently will haveto be calculated in terms of the impugned notification dated16-10-80, which was then in force. This is precisely whatthe Custom authorities are seeking to do. which evidently will haveto be calculated in terms of the impugned notification dated16-10-80, which was then in force. This is precisely whatthe Custom authorities are seeking to do. The counsel forthe petitioners however, insists that the date for determinationof rate of duty is 7/10/1980 when theship entered the territorial waters of India as the import tookplace on that date and chargeability would be Nil on thatday. and anything subsequent to that date is irrelevant forthe leviability of duty. For this contention they mainly relyon the decision of a Division Bench of Bombay High Courtin = ILR Bombay (1978) 435 = D. S. Sawhney v. M. \s. Sylvania and Laxman Ltd. ; (1975) 77 B. L. R. 380 (8 ). In that case notification giving total exemption from thewhole of duty leviable was in force on 29-3-67 when theship entered the territorial waters of India. The said notificationwas in force only up to 31-3-1967. The Bill ofentry was filed on 27-4-1967, goods were cleared in June,1967. The demand of the Custom from levy of duty on theimporter was quashed by the Bench because it took theview that the taxable even occurred when the goods enteredthe territorial waters of India, and the import was thuscomplete when the goods crossed the custom barrier whichwas prior to 31-3-1967. The Bench rejected the claim ofcustom that date has to be determined in terms of Section15 of the Act. It held that reading Section 2 (23) and2 (27) that import takes place when goods are broughtinto territorial waters of India from place outside India. If was also of the view that a clear distinction exists betweenthe concept of chargeability and the concept of assessmentor quantification of the amount payable by way of customduty. Though it was noticed that Section 15 of the Actspecifies the date for determination of rate of duty, but yetit was held that this is entirely different from the chargeabilitywhich arises simply by section 12 (1) of the Act,which is when goods are brought into territorial waters ofindia. The bench rejected the contention of Custom thatrates of duty must be worked out in terms of Section 15. According to it the moment goods entered territorial watersthat was the relevant date, and as exemption notification wasin force on 29-3-67, no duty was payable. With all ourrespect to the learned judges we are unable to agree. The bench rejected the contention of Custom thatrates of duty must be worked out in terms of Section 15. According to it the moment goods entered territorial watersthat was the relevant date, and as exemption notification wasin force on 29-3-67, no duty was payable. With all ourrespect to the learned judges we are unable to agree. Nowsection 12 (1) specifically provides that except or otherwiseprovided in the Act, duty of custom shall be levied at suchrates as specified in Tariff Act. Now goods imported aredutiable goods, as being covered by heading 39. 01)0. 6 inthe Schedule to the Tariff Act. ( 20 ) THEN comes Section 15 (1) which lays down invarious clauses, the rate of duty, if any, applicable to anyimported goods, and to relate it to a definite date withreference to a particular event, like presentation of bill ofentry vide clause (a)] or on the date when goods are naturallyremoved from the warehouse [vide clause (b)] or on the dateof payment of duty [vide clause (c)]. The learned judges in Sylvania case, with respect, omitted to notice that Section15 does not, only talk of the rate but also talks of the datewith reference to which alone the rates can be calculated. In our opinion it would be wrong to read that Section 15covers only the quantification but the date with referenceto which quantification let to be done could relate back tothe earlier period of time when the ship had entered theterritorial waters. Statute is clear that irrespective of thedate when ship enters territoral waters calculation for thepurpose of rate of duty must be done with reference to thedate mentioned in Section 15 in various circumstances. Nowif at that date there is no exemption notification undersection 25 of the Act the goods imported by the importerwould bear a rate of duty as mentioned in the Schedule (100 per cent in the present case ). But if byvirtue of notification under section 25 (1) of the Act thereis total or partial exemption, effective rate of duty will becorrespondingly worked out. In the present case it wouldbe Nil duty prior to 16-10-80 and 40 per cent subsequentto that. This is the only effect of a notification issuedunder section 25 (1) of the Act. It does not in any mannerchange the date of importation for the purpose of duty. In the present case it wouldbe Nil duty prior to 16-10-80 and 40 per cent subsequentto that. This is the only effect of a notification issuedunder section 25 (1) of the Act. It does not in any mannerchange the date of importation for the purpose of duty. Wefeel that this misapprehension in Sylvania case arose presumablyfrom the fact of resuming that when a notificationunder section 25 (1) has been issued exempting the goodsfrom the whole of the duty of custom leviable, it has theeffect as if the entry in question has been deleted from thefirst Schedule of the Tariff Act. so that. Section 12 (1) isinapplicable. This is a misconception on a point of law. As a matter of fact the notification under section 25 (1) isissued precisely because the goods are covered by First Scheduleto the Tariff Act and are subject to duty of Custom. The heading 39. 01106 of Tariff Act continues to cover thegoods in question. Issue of notification under secion 25 (1)does not mean that the goods in question are not chargeableto the levy of duty under section 12. To take the presentexemption notification issued on 16-10-80 where the exemptionis given from so much of duty of custom as is in excessof 40 per cent it cannot be urged that part of the goodsare not chargeable to duty of custom. In fact the wholeof goods are chargeable. Only effect of section 25 (1) notificationis to reduce the effective rate of duty leviable. Goodsin question continue to be dutiable as held in a Divisionbench judgment of this court in Vishal Andhra Industries v. Union of India and others (in CW 72011982 decided on19-3-1982 (9 ). When therefore, a question is posed beforethe Customs authorities as to what rate of duty is to becharged on the imported goods, he has to look at section 12and find out whether the goods imported is subject to dutyof custom under the Tariff Act. If it is so, the furtherstep is to find whether there is any exemption notification,total or partial under Section 25 and then to work out theeffective rate of duty of custom. But the calculationobviously has to be relateable to some date. The legislaturehas not left that vague, but has chosen to particularise thedate. s in Section 15 of the Act. Ignoring of this referenceto dates in Section 15 really amounts to corroding and makingsection 15 redundant. But the calculationobviously has to be relateable to some date. The legislaturehas not left that vague, but has chosen to particularise thedate. s in Section 15 of the Act. Ignoring of this referenceto dates in Section 15 really amounts to corroding and makingsection 15 redundant. It is well settled that no superfluity canbe attributed to the legislature. When specific provisionsfixing date for rate of duty is given by the statute (Section3 5) it is not permissible to indulge in any alternative exerciseto fix other dates. The fallcy in Salvania s case flowsfrom giving a broad meaning to what would constitute importby merely relying on the definition of India as includingterritorial waters of India. Technically and loosely underthe Act it may be that goods are imported when they enterthe territorial waters of India. But from that the consequencedoes not necessarily follow that for the purpose ofworking the rate of duty payable on such imported goodsthe time and date has not to be calculated in accordancewith Section 15 even when it is so statutorily provided. Thisgeneral meaning of the word import as argued by the petitionerhas not been accepted by the courts as laying downcorrect law. Reference may with advantage be made toexpress Mills v. Municipal Committee, Wardha : (ATR 1958sc 347) (10 ). In that case it had been argued for the Unionof India that the import should bear the ordinary dictionarymeaning of bringing into and export should bear the meaningof taking out. Large number of High Courts in India hadtaken this view. TheSupreme Court however, rejected thisand held that "by giving the word imported into or exportedfrom their derivative meaning without any reference tothe ordinary connotation of these words as used in the commercialsense, the decided cases in India have ascribed toogeneral a meaning to these words which it appears from thesetting context and history of the clause was not intended. " "such an interpretation would lead toabsurdity which has, according to the rules of interpretation,to be avoided," (para 22 ). The Supreme Court, therefore,quoted with approval the observations of Chief Justicemalshall in U. S. Supreme Court as follows : "duties, according to that practice are charged onthose articles only which are intended for saleor consumption in the country. " "such an interpretation would lead toabsurdity which has, according to the rules of interpretation,to be avoided," (para 22 ). The Supreme Court, therefore,quoted with approval the observations of Chief Justicemalshall in U. S. Supreme Court as follows : "duties, according to that practice are charged onthose articles only which are intended for saleor consumption in the country. Thus sea-stores,goods imported and re-exported in the samevessel, goods landed and carried over land forthe purpose of being re-exported from someother port, goods forced in by stress of weatherand landed, but not for sale are exempted fromthe payment of duties. The whole course oflegislation on the subject shows that in theopinion of the legislature the right to sell isconnected with the payment of the duties". . . . "sale is the object of importation, and is anessential ingredient of that intercourse, of whichimportation, constitutes a part. It is as essentialan ingredient, as indispensable to the existenceof the entire thing, then, as importation itself. . . " (Vide para 23 ). It then went on to observe that "import is not merelythe bringing into but comprises something more i. e. "incor1porating and mixing up of the goods imported with the massof the property in the locol area. The concept of import is as implying something brought for the purpose of sale orbeing kept". Similarly in Re: Sea Customs Act, S. 20 (AIR 1963 SC1760 (11) the Supreme Court held that "truly speaking theimposition of an import duty, by and large, results in a conditionwhich must be fulfilled before the goods can be broughtinside the customs barriers, i. e. before they form part of themass of goods within the country". A futile effort was madeby the counsel for the petitioners to distinguish Empress Millscase (supra.) by urging that the definition of import wasnot given therein while the same is mentioned in the Customs Act. This distinction is meaningless because the Supremecourt was clearly laying down as to what is the meaning tobe given to the word Import not for the purpose only ofoctroi duty but for the purpose of showing as to what importreally signifies, and emphasising that import must result in incorporting and mixing up the goods imported with themass of property in the local area. ( 21 ) IT was then suggested that State of Maharashtra v. M. H. George; ( AIR 1965 SC 722 )12 would show that bringing into territorial waters would amount to import. That case,in our opinion, rather goes contrary to the petitioner s contention. In that case Secrion 8 of the Foreign Excange Regulationsact laid down thtat no person shall except with thegeneral or special permission of the Reserve Bank bring orsend into India any gold. Explanation provided that bringinginto any port in India of any such article intended to betaken out of India without being removed from the ship orconveyance in which it is carried shall nonetheless be deemedto be bringing as the case may be or sending into Indiaarticles for the purpose of the Section. The Reserve Bankhad issued a notification that except with the permissionof the Bank no person shall bring or send into India anygold. Now the passenger was travelling from Zurich tomanila and in the manifest he was shown as transit passenger. His plane landed at Bombay Air-port and the Customofficers found gold from him. By a majority the Supremecourt held that offence had been committed by the passen-ger. It will be seen that but for the explanation the courtwould have held that no offence was committed becauseeven though the words bringing into India were used insection 8 (1), in the absence of explanation as the passengerhad no intention to land and bring the goods into Indiabut was only in transhipment, there would have been in lawno bringing in of the goods into India. That is why explanationhad to be inserted to create a fiction that notwithstandingthat the goods are not removed from the ship in Which itis being carried it shall nevertheless be deemed to amountto bringing into India of that article for the purpose of thatsection. This case really supports the contention of therespondents that import can only take place at the pointof time when the goods are off-loaded to form a part of themass of goods in the main land. Applying the same ratioto the present case bringing into territorial waters cannotamount to import for the purpose of duty leviable. ( 22 ) THERE are also serious and grave implications involvedin accepting the argument that import should bedeemed to be complete for the purpose of calculating the dutyof custom the moment a ship enters the terricrial waters ofindia. Applying the same ratioto the present case bringing into territorial waters cannotamount to import for the purpose of duty leviable. ( 22 ) THERE are also serious and grave implications involvedin accepting the argument that import should bedeemed to be complete for the purpose of calculating the dutyof custom the moment a ship enters the terricrial waters ofindia. ( 23 ) IT will be seen that there is no definition of territorialwaters of India in the Customs Act 1962. However,under the Territorial Waters Continental Shelf Act No. 80of 1976 Section 2 defines the limit in relation to territorialwaters, the continental shelf. . . . . . . . . . . . . . . . to man thelimit of such waters, shelf. . . . . . . . . . . . Section 3 (2) say"?the limit of territorial waters is the unit of every point ofwhich is at a distance of 12 nautical miles from the nearestpoint of the appropriate base line. Section 3 (3) empowersthe Central Government whenever it considers necessary to: alter the limits of territorial waters. Now if the argument ofthe counsel for the petitioner was to be accepted thatimport for fiscal purpose must be deemed to have taken placeand rate of duty to be calculated with reference to thatpoint of time when the ship enters the territorial waters ofindia grave and anomalous and unpredictable consequencescan follow. As territorial waters extend upto 12 nauticalmiles from the base line the question as to and at what particulartime a ship entered the territorial waters can alwaysbecome a subject matter of debate and dispute between theimporter and customs authorities. It is evident thatthere is no machinery with the customs authorities to keepa check and to know the exact lime when the ship enters theterritorial waters. To take the dates of the Sylvania case thedifference between the two dates i. e. 29th of March and 31stof March, was so closose as to cause problem if enquiry inall such cases is to be held. Section 15 when it specifies thetest with reference to which date is to be fixed for thepurpose of calculating the rate of duty has obviously themerit of providing a definite and specific event about whichthere can never be any dispute between the importer andthe Custom Office. Section 15 when it specifies thetest with reference to which date is to be fixed for thepurpose of calculating the rate of duty has obviously themerit of providing a definite and specific event about whichthere can never be any dispute between the importer andthe Custom Office. Section 7 authorises the Central Governmentto appoint ports and Air Ports which alone shall bethe Custom Ports for the unloading of imported goods. Obviously, therefore, the question of calculating the dutycannot arise unless the conditions for the unloading at theplace specified has been reached and that obviously is notreached in the territorial waters i. e. a distance of 12 nauticalmiles from the base line. Section 12, therefore, when itlevies a duty on goods imported into India must necessarilyrefer to the stage of time when goods are to be unloadedat the Custom Port specified under Section 7. It is apparentthat as to what rate of duty is leviable depends on the classificationof goods which must require inspection by thecustoms authorities. This is obviously impossible whilethe goods are on the ship which is still in the territorial waters. This element of certainty is powerful factor for interpretingsection 15 of the Act, as contended by the. respondents. ( 24 ) import therefore must necessarily mean at a pointof time when the goods are to be off loaded from the shipso that thereafter they form a part of the mass of goodsin the country of consumption. To take an instanceif a ship passes through the territorial waters of India onwardsto Colombo (Sri Lanka) it is apparent that no customduty is payable by the ship and yet the ship had enteredthe territorial waters of India, this instance would show theinfirmity in the contention of counsel for the petitioners. Reference may also be made to (1898 Appeal Cases 735) (13 ). In the case Section 4 of the Customs Tariff Act providedfor levying of Custom duty on all goods enumerated, theseveral rates of duties when such goods are imported, intocanada. Raw sugar of the description imported by the partycould be imported free under old Schedule. But Schedule a to the Tariff Act was amended and a duty imposed. Thisamendment came into force on 3-5-1895. The ship sailedfrom Antwerk with sugar consigned for Montreal. On29-4-1895 the vessel put into the Port of North Sidney,canada. The ship reached Montreal on May 4, 1895. But Schedule a to the Tariff Act was amended and a duty imposed. Thisamendment came into force on 3-5-1895. The ship sailedfrom Antwerk with sugar consigned for Montreal. On29-4-1895 the vessel put into the Port of North Sidney,canada. The ship reached Montreal on May 4, 1895. Beforethe arrival of the ship i. e. 2nd May, 1895, entry hadbeen made at Montreal Custom House. Section 25 of Tariffact required a master of every vessel when entering into theport in Canada to report to Custom Office which was done. Section 31 required that when any goods are brought in anyvessel from any place out of Canada to any port of entryand not landed but is intended to convey to some other port,the duty shall not be paid or entry completed at the firstport but at