PRABHAT SILK MILLS AND COTTON MILLS COMPANY LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) Sometimes problems arise. Sometimes they are created. But for the fact that a customs official who was the father of a thesis which he had publicly propounded namely that inclusion of landing charges levied by the Port authorities on the unloading of imported goods in the assessable value of such goods for the purposes of computation of customs duty being done since times immemorial (the expression is his) was invalid chanced to come across an appeal in 1980 raising this point which he understandably sustained perhaps this group of 14 petitions might not have seen the light of the day.

(2.) And thus a levy not having a very significant impact on the importer individually and consignment-wise but having a much larger significance and impact from the following standpoint has come to be questioned. Insignificant in the sense that only 4% of C.I.F. value (by way of landing charges) is included in assessable value of a consignment imported into India for computing the customs duty payable thereon. Significant in the sense that if the challenge succeeds hundreds of thous- ands of importers who have imported goods in the past worth billions of rupees can come forward to claim refund and flood the courts with petitions or suits for refund on the ground that payment was made under a mistake of law discovered for the first time in 1980 and the levy being invalid limitation commenced to run in 1980.

(3.) Be that as it may the problem is this. Does an export or import of goods take place when the vessel transporting the goods (1) leaves or enters the territorial waters of India or (2) when the goods are loaded from or unloaded on the landmass of India 2 If first alter- native provides the true answer the petitioners might succeed. If the second alternative provides the true answer they might not. The setting in which the problem arises will become clear in a short while.