LexM/S. MANGALORE REF. & PETROCHEMICALS LTD . versus COMMISSIONER OF CUSTOMS, MANGALORE
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[2015] 9 S.C.R. 620 A MIS. MANGALORE REF. & PETROCHEMICALS LTD . • V. COMMISSIONER OF CUSTOMS, MANGALORE (Civil Appeal No: 2753 of 2006 etc.) B SEPTEMBER 2, 2015 [A.K. SIKRI AND R.F. NARIMAN, JJ.] Customs Act, 1962- ss. 12, 13, 14, 23 and 147 - Levy of c duty- On imporl of goods (crude oil) - Whether should be on the basis of the quantity of the oil mentioned in the Bills of Lading or on the basis of the quantity actually received on the shore tanks in India - Revenue levied duty on the basis of the Bill of Lading quantity, on the ground that the duty was D levied on ad valorem basis and not on a specific rate - Order of the Revenue affirmed by the Tribunal - On appeal, held: Under the Act, levy of duty cannot take place until goods are imporled, i.e. they become parl of the land m8ss of India - The imporler is not liable to pay duty on the goods, which E are pilfered or lost or destroyed at any time before clearance for home consumption or deposit in a warehouse- Therefore, the quantity of crude oil actually received into a shore tank in a porl in India would be the basis for payment of customs duty- Levy of duty at specific rate or on ad valorem basis, F does not make any difference - Customs Valuation (Determination of Price of Imported Goods) Rules, 1988- rr. 4 and9. Disposing of the appeals, the Court G HELD: 1. The levy of customs duty under Section 12 of Customs Act is only on goods imported into India. Goods are said to be imported into India when they are brought into India from a place outside India. Unless H 620 ' MANGALORE REF. & PETROCHEMICALS LTD. v. 621 COMMNR. OF CUSTOMS, MANGALORE such goods are brought into India, the act of importation A which triggers the levy, does not take place. If the goods are pilfered after they are unloaded· or lost or destroyed at any time before clearance for home consumption or deposit in a warehouse, the importer is not liable to pay the ~uty leviable on such goods. This is for the reason B that the import of goods does not take place until they become part of the land mass of India and until the act of importation is complete which under Sections 13 and 23 happens only after an order for clearance for home consumption is made and/or an order permitting the C deposit of goods in a warehouse is made. Under Section 23(2), the owner of the imported goods may also at any time, before such orders have been made, relinquish his title to the goods and shall not be liable to pay any duty 0 thereon. In short, he may abandon the said goods even after they have physically landed at any port in India but before any of the aforesaid orders have been made. This again is for the good reason that the act of importation is only complete when goods are in the hands of the E importer after they have been cleared either for home consumption or for deposit in a warehouse. Further, as per Section 47 of the Customs Act, the importer has to pay import duty only on goods that are entered for home consumption. Even under Section 14 of the Customs F Act, when goods are to be valued for the purpose of assessment, such valuation i~ only when the goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade. Thus, under the Customs Act, the levy of import G duty cannot take place until goods are imported, that is, brought into India. Therefore, it is the quantity of goods brought into India alone that attracts the levy of import duty. [Para 10 &11] [629-F-H; 630-A-F] H 622 SUPREME COURT REPORTS [2015] 9 S.C.R. A 2. The Customs Valuation Rules which defines "transaction value" also speaks of the price that is actually paid or payable only for "imported goods". Unless goods are imported, that is, "brought into India" no such price is actually paid or payable. Further, under B Rule 4, such transaction value must be adjusted in accordance with the provisions of Rule 9. This Rule merely restates what is already stated in Section 14, namely, that the value of imported goods has to be the value of such goods for delivery only at the time and C place of importation. (Paras 12 and 13] (630-G, H; 632-0- E] 3. The taxable event in the case of imported goods, is "import". The taxable event in the case of a purchase D tax is the purchase of goods. The quantity of goods stated in a bill of lading would perhaps reflect the quantity of goods in the purch
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