S.M. Daud, J.
1. This is a suit for recovery of Rs. 3,72,025/- representing Customs duty allegedly recovered illegally together with interest thereon.
2. Prior to 15-2-1973, plaintiffs had placed an order with foreign suppliers for supply to them at Bombay a certain quantity of Hicolour Q Wood Pulp. The seller had shipped the said pulp per s.s. Vishwadharma. The vessel owned by the Shipping Corporation of India (SCI) arrived in the Bombay Harbour on 25-2-1973. Had the good been allowed to be cleared on 28-2-1973, the goods would have been assessed duty at 15% plus regulatory duty of 10%. As a result of the budget proposals, the said import from 1-3-1973 was raised to 40% plus 5% Auxillary duty. Entry Inwards was granted on 3rd March, 1973, with the result that plaintiff was required to pay the duties at the enhanced rate. This exaction was challenged by them under the relevant provisions of the Customs Act, 1962 (Act). Having failed in these proceedings vide orders of defendants Nos. 2 to 4 plaintiff has filed this suit.
3. Plaintiff's case is that the owners of s.s. Vishwadharma had submitted the relevant papers to the Customs authorities on 26-2-1973 so as to facilitate expeditious grant of the entry inwards which was required for discharge of the cargo upon assessing the duty payable. In the present case the authorities deliberately delayed the grant of entry inward till 3-3-1973. The delay was contrary to the provisions of the Act. The orders of defendants Nos. 2 to 4 sustaining recovery of duty at the enhanced rates, were illegal and ultra vires. Therefore, the claim for a refund of the sum of Rs. 2,61,595/- representing the excess plus interest thereon at 12% P.A. till date of suit and half that rate for the subsequent period until satisfaction.
4. Defendants contend that the import general manifest presented by the SCI on 26-2-1973 could not be accepted as the same was not accompanied by a certificate of readiness to discharge the cargo from the Master of the vessel. This certificate was a must vide Public Notice No. 42 dated 11-7-1967 (Exh.D-1). In the absence of this certificate entry inward could not be granted till 3-3-1973. There was no illegality in recovering basic and auxillary duty at the rate then prevailing. The orders passed by defendants Nos. 2 to 4 were perfectly correct. Refund of the amount with or without interest was not possible.
5. The two issues arising are:---
(i) Whether the suit goods were assessable to duty as upto 28-2-1973 OR whether the goods would be assessable to the rate of duty prevailing as on 3rd March 1973?
(ii) Relief & Costs?
6. Mr. Diwan representing the plaintiff submits that the customs authorities were under an obligation to arrange for an expeditious grant of entry inward. The owners of the vessel had submitted an import general manifest on 26-2-1973. Grant of entry inward was designedly delayed in consonance with a policy followed by the customs though not sanctioned by the law. This was clear from the SCI's letter of 12-4-1973 which was at Ex. P-2. The gist of Ex.P-2 is that the import general manifest was submitted by the SCI on 26-2-1973, within 24 hours of the vessel's arrival, but that registration of the manifest was delayed pursuant to a Customs policy to grant entry inwards only for vessels which got an along side berth for discharging the cargo. The policy is attacked by learned Counsel as being side berth for discharging the relies on sections 15(1), 17(2), 30(1), 31(1) & (2), and 46(1) of the Act to fortify his submission. Dr. Jaisinghani for defendants relies on defendant Nos. 2's letter dated 8-5-1973 (Ex.P. 8) to establish defendants bona fides vis-a-vis the non-availability of a berth for s.s. Vishwadharma until 3-3-1973. Entry inward, submits the learned Counsel, is conditional upon the allotment of a berth by the Port Trust for then only can the cargo be said to be in readiness for discharge. The differing stands of the rivals boils down to whether or not the law requires the allotment of a berth to a vessel as a condition precedent for grant of entry inward. Mr. Diwan is apparently right when he submits that a cargo discharge readiness certificate is no in terms prescribed by the Act. Section 30(1) requires the person in charge of the vessel carrying imported goods to deliver an import manifest and an import report in the prescribed from. Section 31(1) prohibits the master of the vessel from permitting an unloading of imported goods until the proper officer grants entry inward to his vessel. Section 46(1) requires the importer to submit a bill of entry. This bill can be presented before or after the delivery of the import manifest vide section 46(3) and its provisos. However, the provisions dealing with the date for determination of duty which is section 15, makes it clear that even in the case of an advance delivery of the bill of entry, the determination shall be made on the supposition that the bill was submitted on the date of entry inwards. Mr. Diwan who has argued his point with fairness and marked ability concedes that the Division Bench decision of this Court in Devpal Dhir v. S.V. Kumar and another, 1987(32) B.L.T. 459 (Bombay) seems to go against the submission canvassed by him. Counsel further submits that the Bench was not dealing with a case where a berth was denied to a vessel on the basis of the Customs practice spoken of in Ex.P-2. Now in this case it is not plaintiff's contention that the defendants were responsible for the delayed availability of a berth for s.s. Vishwadharma. If plaintiff's case be otherwise, a necessary party to the suit, the Bombay Port Trust (BPT), is missing from the array of defendant. Ex.P-8 points to the delayed berthing as ascribable to the B.P.T. And in Devpal Dhir's case it has been held that availability of a berth is a condition precedent to the grant of entry inwards. Says the Court:---
"The grant of entry inwards depends upon the availability of the birthing accommodation and it is common knowledge that due to heavy congestion in the port, it is not possible to grant entry inwards forthwith on presentation of the import manifest. The vessel has to wait for days together and grant of entry inwards depends upon the availability of accommodation. In our judgment, the mere fact that the proper officer is unable to grant entry inwards forthwith would make no difference to the liability of the importer to pay customs duty in accordance with the provisions of section 15(1) of the Act."
Availability of a berth for the unloading of the ship is implied in section 31. For it is inconceivable that in normal cases entry inwards be granted even when a berth be unavailable. Mr. Diwan contends that the decision goes counter to the Supreme Court's decision in Asstt Collector, Customs v. Dutex Clock Co., . The argument is apparently correct for the head-note which reads thus seems to so imply:-
"It is correct to say that sections 37 and 57 contemplate the making of a final entry inward after the arriving vessel begins to break bulk and where the vessel was actually allowed to break bulk before 12 O'clock mid-night on the night between February 28 and March 1, 1961 the vessel must be held to have started breaking bulk after the requisite order was given for its entry inward as contemplated by sections 37 and 57 and the goods would be assessable to duty at the rate applicable as on February 28, 1961 i.e. at 10% ad valorem."
But a closer reading of the relevant portion at page 1748 indicates otherwise. That part is a passage from the main judgment of the Appellate Bench of the Calcutta High Court. The same goes as under :-
"I find myself unable to agree with the conclusion of the learned trial Judge. The documents disclosed show that the manifest was delivered on February 20, 1961 and that on the same day the shipping agents made an application for an order for entry inwards of the vessel using the word "provisional" in connection therewith but submitting the import general manifest in duplicate under-taking to submit store list, master's receipt etc. within 24 hours after arrival of the steamer in port. The bill of entry was also submitted on February 28, 1961. On the application of the entry inwards of the vessel on February 20, 1961 an order was made on the same date to the effect that the vessel might be entered. Consequently all the formalities necessary for breaking of the bulk were completed on February 28, 1961, and the rate of the duty applicable was that in force when the bill of entry was delivered on February 28, 1961, in terms of the explanation to section 37. Accordingly, the rate of duty must be the rate which was in force on that date. I find myself unable to accept the contention of the respondents that the bulk was permitted to be broken under a special pass under section 59."
This passage qualified the observations in the last lines of the judgment, which, while affirming the judgment under appeal, says that sections 37 and 57 of the Sea Customs Act (1878) do not contemplate making of a final entry inward after the arriving vessel begins to break bulk. Be that as it may, the view in Devpal Dhir (supra) is supported by the decision of a larger Bench of the Supreme Court reported in M/s. Bharat Surfactants v. Union of India, Mr. Diwan contends that observations therein should
not be construed as an exposition of the law, but a narration of facts as summarised from an affidavit of an official explaining the procedure for assessing duty on imported goods. This construction is contrary to para 14 of the report (page 2052) which is worded as under :-
"It is urged on behalf of the petitioners that the import of the goods must be deemed to have taken place on 11 July, 1981, when the ship originally arrived in Bombay Port and registered itself. The rate of customs duty prevailing on that date was 12.5 per cent, and that, learned Counsel contends, should be the rate applicable to the edible oil consignment under section 15 of the Act. The circumstance that the vessel was unable to secure a berth in the Port of Bombay compelled it to proceed to Karachi to discharge the cargo pertaining to that Port, and but for the non-availability of berth she would not have undertaken that voyage but would have continued in Bombay and discharged the edible oil consignment there. The custom duty which could have been levied then would have been 12.5 per cent. It is pointed out that the vessel was unable to do so for no fault of the petitioners and a reasonable construction must be given to section 15 taking into account the particular circumstances of the case, so that the vessel must be deemed to have made the "Entry Inwards" on 11 July, 1981. We do not find it possible to accept this submission. The provisions of section 15 are clear in themselves. The date on which a Bill of Entry is presented under section 46 is, in the case of goods entered for home consumption, the date relevant for determining the rate of duty and tariff valuation. Where the Bill of Entry is presented before the date of Entry Inwards of the vessel, the Bill of Entry is deemed to have been presented on the date of such Entry Inwards."
Therefore, Ex.D-1 when it prescribes a certificate of readiness to discharge the cargo as a condition for grant of entry inward is not a prescription in excess of law. It is in reality making clear what is implied in sections 30, 31, 46 and 15 of the Act. Defendants Nos. 2 to 4 were right in the view taken and defendant No. 1 is not liable to refund any part of the sum collected as duty basic and auxillary. The issues are answered against plaintiff.
7. The suit fails. Having regard to the uncertainty shrouding the correctness of the stand taken by defendants when the suit was filed, it will be proper to leave parties to bear their own costs. Suit dismissed, with parties left to bear their own costs.