PRAKASH COTTON MILLS (P) LTD. versus B. SEN & ORS.

Citation: [1979] 2 S.C.R. 1142 · Decided: 25-01-1979 · Supreme Court of India · Bench: P.N. SHINGAL · Disposal: Dismissed

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Judgment (excerpt)

A 
B 
c 
1142 
PRAKASH COTTON MILLS (P) LTD. 
v. 
B. SEN & ORS. 
January 25, 1979 
[P. N. SHINGHAL AND 0. A. DESAI, JJ.J 
Customs Act, 1962 (52 of 1962) Ss. 14 & 15-~cope of-Goods imported 
and stored in warehouse-Section amended increasing 
the rate 
of' duty-
Ll'V)' c,f duty whethe1· should be on the basi~ when goods were warehoused or 
when cleared. 
As a result of devaluation of Indian Currency in June. 1966, Ss. 14 & 1.5 
of the Customs Act were amended by the Customs (Amendment) Ordinance, 
1966--which was later replaced by an Act-with effect from July 7, 1966. 
Section 15(1) provides that the rate of duty, 
rate of exchange 
and tariff 
valuation applicable to any imported goods shall be the rate and valuation in 
force . . . . . (b) in the case of goods cleared from a \Va.rehouse under s. 68, 
on the date on which the goods were actually removed from the warehouse. 
D 
The appellant stored on December 22, 
1965 in the 
Customs warehouse, 
goods imported by him under a licence, and cleared them on various dates 
between September I, 1966 and February 20, 1967. 
Under protest, they paid 
customs duty nt the enhanced rates in accordance with the amended provisions. 
Later, they claimed rebate alleging that since the consignments had been re-
ceived, stored and assessed to duty much before the promulgation of the Ordi-
nance, they were liable to pay duty at the rate prevailing on the date of ware~ 
E 
housing, 
Their appeals and revision were unsuccessful. 
In appeal to this Court it was contended that the material change in s. 15 
being only the substitution of the words "the rate of duty, rate of exchange" 
for the words "the. rate of duty'' the customs authorities were not entitled to 
take into account the new rate of exchange at the appreciated value of cur-
rency in respect of the consignments stored in the warehouse prior to the com-
ing into force "'of the Ordinance. 
Dismissing the appeal, 
G 
HELD : The customs authorities were right in taking the view 
that the 
rate of duty applicable to the imported goods should be determined accordi11g 
to the law prevalent on the date they were actually removed from the ware-
house. 
Section 15 ( 1) (b) clearly requires that the rate of duty, rate of ex-
change and tariff valuation applicable to any imported goods shall be the rate 
and valuation in force on the date on which goods are actually removed from 
the warehouse. Under s. 49 an importer may apply to the Assistant Collector 
of Customs for permission to store the imported goods in a warehouse pending 
their clearance and he may be permitted to do so; and s. 68 provides that an 
importer of any warehoused goods may cloor them if the import duty leviable-
on them has been paid. That is why clause (b) of sub-section (,!) of s. 15 
makes a reference to s. 68. 
[1!46D, 1145H--1146C] 
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j 
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PRAKASH COTTON MILLS v. B. SEN (Shinghal, J.) 
1143 
In the instant case the goods were removed from the warehouse after the 
A 
Ordinance canie into force on July 7, 1966. 
[1146Dl 
ClvIL APPELLATE JURISDICTION : Ci'vil 
Appeal Nos. 
1997 and 2219 of 1969. 
1992-
Appeals by Special Leave from order dated 16-1-69 and 19-3-69 
of the Govt. of India, Min. of Finance Dept. of Revenue in Orders 
Nos. 8637-8642/68 and 1408/69. 
Y. S. Chitale, J. B. Dadachanji and D. N. Misra for the Appellant 
in all appeals. 
B 
S. Markrmdeya and Girish Chandra for the Respondents in all the 
C 
appeals. 
' 
The Judgment of the Court was delivered by 
SHINGHAL J. These appeals by special leave arise out of an order 
of the Central Government dated Jannary 16, 1969 by which six revi-
sional applications of the appellants were dismissed, and a similar order 
D 
dated March 19, 1969, in the remaining case. As the basic facts and the 
law governing them are quite similar, it will be sufficient to deal with 
the common point in controversy before us on the basis of the admit-
ted facts, and to dispose of the appeals together. 
The appellants obtainted licences for the import of 
102 
cases of 3,000 Kgs. of nylon yarn. 
The yarn was shipped to Bombay 
on the basis of a letter of credit in favour of the foreign suppliers. 
When the shipment arrived, the appellants received the bill of lading 
and other documents of title from the bankers on or about August 23, 
1965, and paid for the same. 
They lodged the bill of entry the same 
day, and it has been claimed that the goods were assessed for duty by 
the customs authorities at a certain figure. 

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