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Calcutta High Court · body

2015 DIGILAW 182 (CAL)

Dinesh Kumar Goyal v. Air Customs Superintendent

2015-02-26

ASHIS KUMAR CHAKRABORTY

body2015
Judgment Ashis Kumar Chakraborty, J. The petitioners filed this writ petition against the respondent customs authorities claiming of Rs. 39,984/- with interest on account of refund the customs duty collected from them on October 17, 2005 at Netaji Subhas Chandra Bose International Airport, Kolkata (hereinafter referred to as “the said airport”) on two television sets which they purchased in Singapore. The petitioner no. 2 is the son of the petitioner no. 1. The petitioners claimed to be the members of a joint family, consisting of eight adult members and one minor member, maintaining the same domestic establishment at their residence at Salt Lake. On October 17, 2005 all the nine people, comprising their joint family of the petitioners, returned from Singapore by the same flight. When the petitioners produced the said two television sets to the customs authorities for clearance, the customs authorities did not find anything wrong in the said two television sets for clearance under the Customs Act, 1962 and the Baggage Rules, 1993 (hereinafter referred to as “the said Baggage Rules”). The petitioners claimed exemption of the entire amount of customs duty in respect of the said two television sets, on the ground that all the nine members of the joint family were travelling together, and the said televisions sets were to be used by members of their joint family. However, the respondent nos. 2 and 3, the officials of the customs authorities at the said airport did not accept such contention of the petitioners and directed each of the petitioners to pay customs duty of Rs. 19,992/- (amounting to a total sum of Rs. 39,984/-) on account of each the said. Each of the petitioners paid the customs duty of the said amount of Rs. 19,992/-. The two receipts dated October 18, 2005 evidencing payment of the said sum of Rs. 19,992/- paid by each of the petitioners on account of the Customs duty imposed by the respondent nos. 1 and 2 are disclosed in the writ petition. It appears that the each of the said television sets was purchased in the individual names of the petitioner no. 1 and the petitioner no. 2, respectively. From the said receipts, it is evident that value of each of the said television sets was Rs. 81,000/- and an allowance of Rs. 1 and 2 are disclosed in the writ petition. It appears that the each of the said television sets was purchased in the individual names of the petitioner no. 1 and the petitioner no. 2, respectively. From the said receipts, it is evident that value of each of the said television sets was Rs. 81,000/- and an allowance of Rs. 25,000/- was allowed in respect of each of the said television sets and thereafter customs duty was imposed at the rate of Rs. 19,992/- for each of the said television. By a letter dated October 20, 2005 the petitioners’ advocate called upon the respondent nos. 1, 2 and 3 to refund of the said sum of Rs. 39,984/-. In the said letter dated October 20, 2005 the advocate of the petitioners reiterated that since all the nine members of the family of the petitioners landed at the said Airport on October 17, 2005 together, in terms of Section 79 of the Customs Act, read with Rule 2(iv) and Rule 3 (Appendix-‘A’) of the said Baggage Rules, they were entitled to exemption, by way of free allowance, on the entire value of the said television sets totaling Rs. 1,79,900/-. In reply, by two separate letters dated October 31, 2005, the respondent customs authorities refused to entertain the claim of the petitioners for refund. The customs authorities relied on the Explanation appearing below Appendix ‘A’ of Rule 3 of Baggage Rules 1998 that “the free allowance under this Rule shall not be allowed to be pooled with the free allowance of any other passenger.” After receipt of the said letters dated October 31, 2005 from the concerned respondent no. 3, the petitioners filed this writ petition. In their affidavit-in-opposition the respondent customs authorities maintained the same stand stated in the said letter dated October 31, 2005: Mr. R.N. Dutt, learned Advocate appearing for the writ petitioners submitted that there is no dispute that all the nine members comprising the joint family of the petitioner nos. 1 and 2 had travelled to Singapore together and all of them landed at the said Calcutta Airport on October 17, 2005 by the same flight. According to him Section 79 of the Customs Act provides for the power of the customs officer at an airport to pass free of duty any article in the baggage of a passenger subject to the Baggage Rules, 1999. According to him Section 79 of the Customs Act provides for the power of the customs officer at an airport to pass free of duty any article in the baggage of a passenger subject to the Baggage Rules, 1999. He relied on the definition of the word “family”, in Rule 2 of the Baggage Rules, to include all persons who are residing in the same house and form part of the same domestic establishment. Mr. Dutt strenuously urged that in the instant case, since the said two television sets were brought by the petitioners while accompanied by other six members of the joint family, the petitioners were entitled to the benefit of exemption for Rs. 2 lakhs, that is, by clubbing exemption limit Rs. 25,000/- for each member of the said family and no duty could be levied any of the petitioners on account of the said two television sets valued at Rs. 81,000/- each. He further submitted that if the definition of the expression “family” in Rule 2(iv) of the said Baggage Rules creates any ambiguity, the petitioner should get the benefit of the interpretation of Section 79(1)(b) of the Customs Act for obtaining the exemption of customs duty, by way of free allowance, for the entire value of the said television sets as claimed in this petition. In support of his contention Mr. Dutt relied on the decision of the Supreme Court in the case of C. Krishna Prasad vs. Commissioner of Income Tax, Bangalore reported in 97 ITR 493, where it was held that plurality of persons is an essential attribute of a family and a single individual cannot constitute a joint family. He also relied on paragraph 13 of the decision of the Supreme Court in the case of State of Jammu and Kashmir vs. Lakhwinder Kumar and Ors. reported in (2013) 6 SCC 333 where it was held that the use of the expression “includes” in the definition clause makes it exhaustive, whereas the user of the expression “means” in the definition clause prima facie indicates the definition to be restrictive and exhaustive. Lastly, he cited another decision of the Supreme Court in the case of Commissioner of Income Tax (Central) –I, New Delhi vs. Vartika Township(P) Ltd. reported in (2015) 1 SCC 1 . Lastly, he cited another decision of the Supreme Court in the case of Commissioner of Income Tax (Central) –I, New Delhi vs. Vartika Township(P) Ltd. reported in (2015) 1 SCC 1 . He relied on paragraph 41.2 of the said decision, where the Supreme Court reiterated the settled principle of law that there cannot be imposition of any tax without the authority of law and if the provision of law imposing any tax is ambiguous or vague and is susceptible to two interpretations, the interpretation which favours the subjects, as against Revenue, has to be preferred. Per contra, Ms. Asha Gutgutia, learned advocate, appearing for the respondent customs authorities submitted that there is no merit in the claim of the writ petitioners in this writ petition. She strenuously contended that from a fair reading of the provisions contained in Section 79 of the Customs Act read with Rule 3 and Appendix-A of the said Baggage Rules, it is evident that the exemption granted in respect of bona fide Baggage containing articles like that of the said television sets upto Rs. 25,000/- is applicable in respect of an individual passenger alone and the explanation provided in the said Appendix-A to the said Baggage Rules, in clear and uncertain terms provides that the free allowance under the said Rule shall not be allowed to be pooled with the free allowance of any other passenger. Since the decision on the issues raised in this writ petition, depends upon the interpretation of the provisions contained in Section 79 of the Customs Act and Rules 2(iv), 3 read with Appendix-A of the Baggage Rules, the relevant portions of the said provisions are set out hereunder. “Section 79. Bona Fide baggage exempted from duty. – (1) The proper officer may, subject to any rules made under sub-section (2), pass free of duty. “Section 79. Bona Fide baggage exempted from duty. – (1) The proper officer may, subject to any rules made under sub-section (2), pass free of duty. (a) any article in the baggage of a passenger or a member of the crew in respect of which the said officer is satisfied that it has been in his use for such minimum period as may be specified in the rules; (b) any article in the baggage of a passenger in respect of which the said officer is satisfied that it is for the use of the passenger or his family or is a bona fide gift or souvenir; provided that the value of each such article and the total value of all such articles does not exceed such limits as may be specified in the rules. (2) the Central Government may make rules for the purpose of carrying out the provisions of this section and, in particular, such rules may specify- (a) the minimum period for which any article has been used by a passenger or a member of the crew for the purpose of clause (a) of sub-section (1); (b) the maximum value of any individual article and the maximum total value of all the articles which may be passed free of duty under clause (b) of sub-section (1); (c) the conditions (to be fulfilled before or after clearance) subject to which any baggage may be passed free of duty. (3) Different rules may be made under sub-section (2) for different classes of persons. BAGGAGE RULES, 1998 Rule 1. Short title and commencement- (i) These rules may be called the Baggage Rules, 1998. (ii) …………………………………………………………… RULE-2. Definitions - In these rules, unless the context otherwise requires- (i) “appendix” means an Apendix to these rules; (ii) “resident” means …………………………………. (iii) “tourist” means …………………………………… (iv) “family” includes all persons who are residing in the same house and form part of the same domestic establishment; RULE 3. (ii) …………………………………………………………… RULE-2. Definitions - In these rules, unless the context otherwise requires- (i) “appendix” means an Apendix to these rules; (ii) “resident” means …………………………………. (iii) “tourist” means …………………………………… (iv) “family” includes all persons who are residing in the same house and form part of the same domestic establishment; RULE 3. Passengers returning from countries other than Nepal, Bhutan, Myanmar or China – An Indian resident or a foreigner residing in India, returning from any country other than Nepal, Bhutan, Myanmar or China, shall be allowed clearance free of duty articles in his bona fide baggage to the extent mentioned in column (2) of Appendix A. [Provided that such Indian resident or such foreigner coming by land route as specified in Annexure IV, shall be allowed clearance free of duty articles in his bona fide baggage to the extent mentioned in column (2) of Appendix ‘B’.] APPENDIX A (See rule 3) (a) All passengers of and above [10 years] of age and returning after stay abroad of more than three days. (i) …….. (ii) [Articles other than those mentioned in Annex. I upto a value] of [Rs. 25,000/-] if these are carried on the person or in the accompanied baggage of the passenger. (b)……………….. (i) ……………….. (ii) ………………… (c) ……………….. (i) ……………. (ii)……………… (d)……………… (i) ……………. (ii) …………….. Explanation – The free allowance under this rule shall not be allowed to be pooled with the free allowance of any other passenger.’ I have considered the rival contentions raised on behalf of both the writ petitioners and the respondent customs authorities. Sub-section (1) of Section 79 of the Customs Act contains the enabling provision which confers power on the customs officer to pass an article, in the baggage of a passenger or the member of the crew, free of duty, subject to his satisfaction that the article has been in his/her use for some minimum period or that the article is for the use of the passenger or his/her family. Now, sub-section (2) of Section 79 empowers the Central Government to frame rules for the purpose of carrying out the provisions of Section 79. In exercise of such power, the Central Government has framed the said Baggage Rules. Now, sub-section (2) of Section 79 empowers the Central Government to frame rules for the purpose of carrying out the provisions of Section 79. In exercise of such power, the Central Government has framed the said Baggage Rules. Rule 3 of the said Baggage Rules provides, inter alia, that an Indian resident, returning from any country other than Nepal, Bhutan, Myanmar and China shall be allowed clearance free of duty articles in his bona fide baggage to the extent mentioned in column (2) of Appendix “A”. In this case, the petitioners claimed exemption of customs duty in respect of the said television sets under Clause (a) under Column.-1 read with Clause (ii) under column (2) of the said Appendix-A, which provide that “All passengers” of and above 10 years of age and returning after stay abroad of more than three days would be allowed exemption from customs duty for certain articles upto a value of Rs. 25,000/-, if the same are carried on the person or in the accompanied baggage of the passenger. The opening words used in the in different clauses under Column-1 of the said Appendix-A are “All passengers ……..” However, the enabling provisions contained in Section 79 of the Customs Act provide for the power of the proper officer to pass an article(s) free of duty, that is to grant exemption from customs duty, in the baggage of a passenger or member of the crew. In other words, Section 79 of the Customs Act provides for granting of exemption of customs duty in respect of any article brought by a passenger himself/herself, for his/her personal use or for the use of his/her family. There cannot two opinion that the word “family” appearing in clause (b) of sub-section (1) of Section 79 relates to the user of the article(s) brought by any passenger from foreign countries. The said Baggage Rules were framed under Section 79(2) of the Customs Act for regulating the exemption granted under the enabling section 79(1) of the said Act and while framing the said Baggage Rules the Central Government was conscious of the fact that as per Section 79 exemption is granted in respect of an article or articles in the baggage of an individual passenger brought for his own use or for the use of his/her family. Thus, in order to ensure that the user of the words “All Passengers” in the opening sentences in Clauses (a) to (d) under Column 1 of the said Appendix does not give rise to any ambiguity in spite of the clear language of Section 79 of the Customs Act, the Explanation was put under Appendix “A” to exclude any claim for free allowance by a passenger, by pooling the free allowance of any other passenger. Any other interpretation, as contended by the petitioners, shall render the said Explanation otiose. Now let us consider the contention of Mr. Dutt that the definition of “family” under Rule 2(iv) of the said Baggage Rules creates ambiguity or that the said definition of family can be interpreted to uphold the claim of the writ petitioners. After considering the provisions of sub-section (2) of Section 79 of the Custom Act, as stated above and the relevant Rules of the said Baggage, I cannot but hold, that in Rule 2(d) of the said Baggage Rules, the definition of “family” has been provided for the purpose of interpreting the user of an article brought by a passenger for the use of his family under Section 79(2)(b) of the Customs Act and the said definition of family in Rule 2(d) of the Baggage Rules does not create any ambiguity. Thus, none of the decisions of the Supreme Court cited by Mr. Dutt in the cases of C. Krishna Prasad (supra), State of Jammu & Kashmir (supra) and Commissioner of Income-Tax (Central)-I, New Delhi has any manner of application in this case. For all the foregoing reasons, I find no illegality in the collection of customs duty for a sum of Rs. 39,984/- from the petitioners on account of the said television sets and consequently the writ petition fails. However, there will be no order as to costs.