COLLECTOR OF CUSTOMS, CALCUTTA versus SUN INDUSTRIES

Citation: [1988] 3 S.C.R. 500 · Decided: 11-04-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

Judgment (excerpt)

A 
B 
COLLECTOR OF CUSTOMS, CALCUTTA 
v. 
SUN INDUSTRIES 
APRIL 11, 1988 
[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] 
Customs Act, 1962/Customs and Central Excise Duties Drawback 
"place outside India· if goods reached a place beyond the territorial 
Rules, 1971. Sections 2(8) and 75/Rule 2(c)-Drawback on imported J
material used in manufacture of goods exported-Goods reached a 
C waters. 
_. 
Words and Phrases. 'Place'-Meaning of 
The Respondent had, shipped plywood panels for tea chests to be 
delivered at Colombo under claim for drawback under Section 75 of the 
D Customs Act, 1962, against shipping bill. The ship developed engine 
trouble on the way and returned back and· ran aground in Indian ter-
ritorial waters at the port of Paradeep. The titting, stores and cargo 
vessel had beeu salvaged into India under the supervision of Port Trust 
Paradeep. 
~' 
E 
Respondent claimed drawback on the said g~ods. The claim was 
rejected by the Assistant Collector under Section 7 !; of the Customs Act 
read with Section 2(18) and rule 2(c) of the Custorls and Central Excise 
Duties Drawback Rules, 1971. On appeal, the Appellate Collector also 
rejected the claim on the ground that the ship ran a ground in territorial 
waters of India, and so the said goods could not be deemed to have been 
F exported. 
A Revision Petition preferred under Section 131 by the Respon-
dent was transferred to the Customs Excise and Gold (Control) Appel-
late Tribunal. The Tribunal found that the ship had passed beyond the 
territorial waters of India and the engine trouble developed while the 
G 
Ship was in the high seas and, thus, by reason of the ship having passed 
beyond territorial waters with the goods on board, the export of the 
goods out of India had been completed; that subsequently the ship 
decided to sail into the territorial waters was of no relevance, and held 
that under the scheme of Section 75 of the Act, export having been 
completed, Respondent was entitled to the benefit of the drawback 
H 
scheme. 
500 
-
-
COLLECTOR OF CUSTOMS v. SUN INDUSTRIES 
501 
In the appeal by Revenue, under section 130-E(B) it was con-
tended that proof must be given that the goods had reached a place 
outside India in view of section 2(18) and that taking out to a place 
outside India mealjt delivery of goods to a place outside India. 
Rejecting the appeal, this Court, 
HELD: 1.1. The Tribunal was right in the view it .. took that the 
Respond~ was entitled to the benefit Of section 75 of the Customs Act. [506B I 
A 
8 
.\ 
.l.2 When the ship got Clearance and moved out of the territorial 
waters the export was complete. The title to the goods passed to the 
exporters. The goods reached a place in the high seas which is outside C 
India and the title of the goods also passed to the purchasers. It is true 
that the goods did not land, in any place because of the defect in the ship. 
But the expression "taking out to a place outside India" would also 
mean a place in high seas. It is beyond the territorial waters of India. 
High seas would also mean a place outside India, if it is beyond the 
D 
territorial waters of India. Indubitably the goods has been taken out of 
India. [SOSB-C, D] 
Lucas TVS v. Assistant Collector, [1987] vol. 28 E.L.T. 266, 
referred to. 
2.1 The word "place" is generally fonnd in· conjunction with 
other words which give it a colour, and is usually contr()lled by its 
context. [SOSH] 
E 
2.2 In the clause of charter party requiring charterer to procure 
safe "place" for discharge of cargo, it meant spot selected to drop F 
anchor plus area over which tanker might swing on tide and charter's 
duty was not fulfilled· merely by selecting area containing both safe and 
unsafe berths. [SOSF-G] 
2.3 The word "place" as used in a statute relaiing to searching 
for stolen goods in any store, shop, wherehouse; or other building or G 
place in a town, includes a steam-boat or vessel moored at the wharf. [SOSG I 
Webster Comprehensive Dictionary, International Edition page 
964,. Words and Phrases, Permanent Edition, Volume 32-A page 128, 
Stroud's Judicial Dictionary, 3rd Edition, Vol. 3, pp 2199, 2208, refer-
~ 
to 
. 
. 
H 
502 
SUPREME COURT REPORTS 
{1988) 3 S.C.R. 
A 
CIVIL APPELLA1E JURISDICTION: Civil Appeal No. 761 
of 1988. 
From the Order dated 14. 7.1987 of the Customs Excise and Gold 
(Control) Appellate Tribunal, New Delhi in Appeal No. 2139/81-D. 
B 
A.K. Ganguli, Ms. Indu Malhotra and Mrs. Sushma Suri for the 
)._ 

Excerpt shown. Read the full judgment & AI analysis in Lexace.