# GANGADHAR NARSINGDAS AGARWAL v. P. S. THRIVIKRAMAN & ANR

- **Citation:** [1972] 3 S.C.R. 874
- **Court:** Supreme Court of India
- **Decided:** 1972-03-16
- **Bench:** S. M. S!Kri, A. N. Grover, A. N. Ray, D. G. Palekar, M. H. Beg
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gangadhar-narsingdas-agarwal-v-p-s-thrivikraman-anr-5625
- **Pages:** 7

## Headnote

Tariff Act 1934-S. 44-Whether notification under S. 44 is
appli·
cable to the facts and circum.~tances of the case.
The appellant on 26th July 1966 filed shipping bill in triplicate before
the Joint Chief Controller of Imports and Exports for the purpose of obtaining export licenc~s in respect of 10,160 metric tonnes of iron ore.
On 28 July 1966 export licenee was granted to the appell'111t.
On 30
July 1966 the agents of the vessel made an application to the Asst!. Collector of Customs, for the grant of entry outward to the said vessel to
load i!ron ore, which was granted on the same day with pennission to
ship cargo on board the soid vessel.
On 1 August, the appellant presented
to the Customs authority under section 50 of the customs Act, 1962,
shipping bills in triplicate and the Customs authority made several endorsements on the shipping bill on the sami~ day. On the 2 August 1966,
further endorsements on the
shipping bill was made
by
the Customs
authofity indicating that the shipment was inspected, checked and payment
was made in full.
On 2 August 1966, ":l rrotification was issw~d by the Ministry of Com, ..
merce imposing ;i duty at the rate of Rs. 10 per metric tonne on lumpy
iron ore. and on 28 January 1967, the Customs authority issued a notice
to the appellant notifying that goods actually shipped by the appellant
were subject to '!xport duty and the appellant W":l.S liable to pay Rs. 98044
and the appellant was called upon to show cause as to why the amount
should not be recovered from him.
The appellant contended that the shipping bill was presented to the
Customs authority and the entry outward to -the ship was given prior to
2 August, 1966 when the notification came into force and so, the notification under S. 4A of the Tariff Act 1934 was not applicable to the consignment in question.
The Customs authorities held that the appellant was
!\able to Jl'IY the export duty.
The appellant impeached the order b::fore
the Judicial Commissioner who also upheld the order of the
Customs
authorities.
The only question •.vhich arose for d'!cision before this Court was
whether the shipment and export of iron ore by the appellant became
liable to the said duty introduced on 2 August 1966. The appellant contended th1t th•" shipping bill was presented on 1 August, 1966 and the
order of the Customs authorities for entry outw".lrds to the vessel was
also given on 1 August 1966 and so, the export in the present case was
not liable to payment of duty imposed on 2 August 1966.
The Customs
authoriti-es however contended that the ve~sel arrived at Marmagoa harbour on 3 August 1966 and the vessel commenced loading on 3 August,
1966, and therefore, under s. 16(i) rif the Customs Act 1962, the shipping
'
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G. N, AGARWAL V. P. S. RAMAN (Ray, J.)
875
bill which had been presented before the date of entry outwards "shall be·
deemed to be presented at the earliest on 3 August 1966 when the vessel
in question arrived,
Allowing the appeal,
HELD : Jn the present case, the Customs authorities acted withoui
jurisdiction in impo1ing duty on the expon by holding that the date of
entry outwmds of the vessel was the dale when the vessel, arrived.
Section 38 of the Sea Customs Act 1878 was_the Counter-part of Sec. 16
of the Customs Act, 1962. Section 38 h.ad two provisos.
Under the first
proviso to tbat oJd section where shipment was permitted without a. shipping bill, the rate of duty was to be the rate in force at the time when the
shipment of goods commenced.
Under the second proviso, the shipping
bill must be deemed to have been delivered on the date on which that
vesSel arriVed or entry outWardS was ·given which ever was later.
Under
the provisos of S. 38 of the old Act, the Customs authorities had power
to apply the rate in force on the date o'f the arrival of the vessel. Under
S. 16 ·of the 19.62 Act, it is not permissible to do so. The statute does not
contain such a provision. S. 16 of the 1962 Act speaks of the fi

## Text

874
GANGADHAR NARSINGDAS AGARWAL
v.
P. S. THRIVIKRAMAN & ANR.
March 16, 1972
[S. M. S!KRI, C.J., A. N. GROVER, A. N. RAY, D. G. PALEKAR
AND M. H. BEG, JJ.]
Tariff Act 1934-S. 44-Whether notification under S. 44 is
appli·
cable to the facts and circum.~tances of the case.
The appellant on 26th July 1966 filed shipping bill in triplicate before
the Joint Chief Controller of Imports and Exports for the purpose of obtaining export licenc~s in respect of 10,160 metric tonnes of iron ore.
On 28 July 1966 export licenee was granted to the appell'111t.
On 30
July 1966 the agents of the vessel made an application to the Asst!. Collector of Customs, for the grant of entry outward to the said vessel to
load i!ron ore, which was granted on the same day with pennission to
ship cargo on board the soid vessel.
On 1 August, the appellant presented
to the Customs authority under section 50 of the customs Act, 1962,
shipping bills in triplicate and the Customs authority made several endorsements on the shipping bill on the sami~ day. On the 2 August 1966,
further endorsements on the
shipping bill was made
by
the Customs
authofity indicating that the shipment was inspected, checked and payment
was made in full.
On 2 August 1966, ":l rrotification was issw~d by the Ministry of Com, ..
merce imposing ;i duty at the rate of Rs. 10 per metric tonne on lumpy
iron ore. and on 28 January 1967, the Customs authority issued a notice
to the appellant notifying that goods actually shipped by the appellant
were subject to '!xport duty and the appellant W":l.S liable to pay Rs. 98044
and the appellant was called upon to show cause as to why the amount
should not be recovered from him.
The appellant contended that the shipping bill was presented to the
Customs authority and the entry outward to -the ship was given prior to
2 August, 1966 when the notification came into force and so, the notification under S. 4A of the Tariff Act 1934 was not applicable to the consignment in question.
The Customs authorities held that the appellant was
!\able to Jl'IY the export duty.
The appellant impeached the order b::fore
the Judicial Commissioner who also upheld the order of the
Customs
authorities.
The only question •.vhich arose for d'!cision before this Court was
whether the shipment and export of iron ore by the appellant became
liable to the said duty introduced on 2 August 1966. The appellant contended th1t th•" shipping bill was presented on 1 August, 1966 and the
order of the Customs authorities for entry outw".lrds to the vessel was
also given on 1 August 1966 and so, the export in the present case was
not liable to payment of duty imposed on 2 August 1966.
The Customs
authoriti-es however contended that the ve~sel arrived at Marmagoa harbour on 3 August 1966 and the vessel commenced loading on 3 August,
1966, and therefore, under s. 16(i) rif the Customs Act 1962, the shipping
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c
D
E
F
G
H
A
B
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G
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G. N, AGARWAL V. P. S. RAMAN (Ray, J.)
875
bill which had been presented before the date of entry outwards "shall be·
deemed to be presented at the earliest on 3 August 1966 when the vessel
in question arrived,
Allowing the appeal,
HELD : Jn the present case, the Customs authorities acted withoui
jurisdiction in impo1ing duty on the expon by holding that the date of
entry outwmds of the vessel was the dale when the vessel, arrived.
Section 38 of the Sea Customs Act 1878 was_the Counter-part of Sec. 16
of the Customs Act, 1962. Section 38 h.ad two provisos.
Under the first
proviso to tbat oJd section where shipment was permitted without a. shipping bill, the rate of duty was to be the rate in force at the time when the
shipment of goods commenced.
Under the second proviso, the shipping
bill must be deemed to have been delivered on the date on which that
vesSel arriVed or entry outWardS was ·given which ever was later.
Under
the provisos of S. 38 of the old Act, the Customs authorities had power
to apply the rate in force on the date o'f the arrival of the vessel. Under
S. 16 ·of the 19.62 Act, it is not permissible to do so. The statute does not
contain such a provision. S. 16 of the 1962 Act speaks of the fictional date
only in ~e_Jatiqn to the order of date of entry outwards of the veSse1.
In
the-present case, the order of entry outwards of the vessel v1as made prior
to 2 August, 1966. Therefore, the Customs auti)oritJes acted without jurisdiction in imposing the duty in question. 'f.879 G-880 CJ
CIVIL APPELLATE 1URISD!CTJON : Civil Appeal No. 2137 of
1968.
Appeal from the judgment and order dated April 5, 1968 of the
Judicial Commi$sioner's Court, Goa, Daman and Diu in Writ Petition No. 9 of 1967.
&Ii Sorabjj, P. C. 1Iharlari, B. D. Bharucha, J. B. Dadachmrji
and Ravinder Narain, for the appellant.
1agadish Swarup, Solicitor-General of india, Govind Das and
B. D. Sharma, for the respondents.
The Judgment of the Court was delivered by
Raj, J. This is an appeal by certiiicatie from the judgment
dated 5 April, 1968 of the Court of the Judicial Commissioner,
Goa, Daman and Diu· at Panaji.
The appellant challenged the leV)' of export duty of Rs. 98044
on .9804-40 mertic tonnes of iron ore &hiPI?ed on S:S. 'Ardenode'
QI! 3 August, 1966 at the rate of Rs. 10 per metric tonne.
The appellant on 26 July, 1966 filed .shipping bill in triplicate
before the Joint Chief Controller of Imports and Exports PanaJi,
Goa for the 11urpose of obtaining 'eXport licence in respect of
10,160 metric tonnes of iron ore. On 28 July, 1966 export
licence was granted to the appellant. on. 30 July, 1966 M/s.
876
SUPREME COURT REPORTS
[1972] 3 S.C.R.
Hiralal & Co. agents of the vessel S. S. ·~rdenode' made an application ·to the Assistant Collector of .customs, Marmagoa for the
grant of entry outwards to the said vessel to load iron ore.
On
30 July, 1966 the Assistant Collector of Customs, Marmagoa
made an order granting entry outwards to the said vessel S.S.
Ardenode and also gave permission to ship cargo on board the
said vessel.
On 1 August, 1966 the appellant presented to the Customs
authorities under section 50 of the Customs Act, 1962,
(hereillafter called the Act), shipping buts in triplicate, dated 26 July,
1966.
The appellant ill accordance with the provisions of section
50 of the Act at the foot of the shipping but subscribed to a declaration as to the truth of the contents of the shipping buts.
On
1 August, 1966 the Customs authorities made these entries on the
shipping bill 'rotation No. 730 Sd/ 1 August, 1966' 'Let export
after (7amination if necessary Sd/ ~ 1 August, 1966' and 'E.F.-
No. 3/1/8/1966'. The abbreviation 'E.F.' means Export Fee.
On 2 August, 1966 the Customs authorities made further endorsements on the shipping bill.
These endorsements were 'PI
as
usual and checked. des'; 'lnspec,ted the lot-2-barges-checked des';
and 'Pd in full'.
On 2 August, 1.966 there was a notification issued by the
Ministry of Commerce in exercise of powers conferred by section
4-A of the Indian Tariff Act, 1934 amending ,the second schedule
to the Tariff Act.
The relevant item in the said schedule introduced by way of amendment is 28 and the name of the article is
lumpy iron ore ·and the rate of duty is Rs. 10 per tonne.
The S.S. Ardenode arrived at Marmagoa at 23.20 hours on
2 August, 1966.
The vessel arrived at Marmagoa Inner Harbour
on 3 August, 1966 at 07.50 hours. ·The vessel commenced loading the cargo on 3 August, 1966.
The Customs.authorities on 28 January. 1967 _iss11ed a notice
to the appella!lt. notifying that the goOds actually shipped by \he
appellant were subject to export .duty at the rate of Rs, . 10 per
metric tonne and the custom duty amounting to Rs.· 98044 which
was not Je\'.ied in .respect ·of tjle consignment was due from the
appeUant and \lie appellant was called· upon in accordance with
section.28, of the Act. as to why the runoWlt should not be;,recovered from the appellant .
The appellant contended before die Gtistoms autfu!irities that
the shipping bill was presented to the Customs authcirltic!s-·and the
-entry outwards to. the sh_!p S.S. Ardenode .was given .prior to 2
August, 1966 .when Ill? duty was payable m respectof. the export
of the goods m question.
The appellant, therefore,
.cont~ed
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G. N. AGARWAL v. P, S. RAMAN (Ray, J.)
877
A
that the notification Wider section 4-A of the Tariff Act 1934 was
not applicaNe to the consignment and no duty was payable in respect of the export of the goods having regard to the Qrovisions ot
r.ection 16 of the Customs Act. It may also be stated that the
appellant impeached the vires of the notificatiQn.
1
The Customs authorities on 19 April, 1967 held that by virtue of the provisions of section 16 ( 1 ) of the Act the shipping bill
shall be doe,med to have been presented at the earliest on 3
August, 1966 when the vessel in question arrived. The export
·duty was levied with effect from 2 August, 1966. The Customs
authoritic~ therefore held that the appellant was liable to pay the
C 11xport duty.
The appellant impeached the order of the Customs authorities
under Article 226 of the Constitution in the Court of the Judicial
Commissioner, Goa, Daman and Diu, Panaji.
The Judicial Commissioner upheld the order of the Customs authorities.
The entire controversy in the present appeal is whether shipO
ment and export of iron ore by the appellant became liable to the
said duty introduced on 2 August, 1966.
The relevant provisions for the purpose of the present appeal
are to be found in section 16 which deals with date for determination of ra!e of duty and tariff valuation of export goods and
E
sections 39, 50 and 51 which deal with loading of export goods
on vessel and clearance of goods for exportation.
Section 16 is as follows :-
"16( l). The rate of duty and tariff valuation, if
any, applicable to any export goods, shall be the rate
F
and valuation in forceG
B
(a) in the case of goods entered for export under
section 50, on the date on which a shipping bill
or a bill of export in respect of such goods is
presented under that section;
(b) in the case of any other goods, on the date of
payment of duty;
Provided that if the shipping bill has been presented
before the_ date of entry outwards of the vessel by which
the goods are to be exported, the shipping bill shall be
deemed \o have been presented on the date of such entry
outwards.
(2) The provisions of this seclivn shall not apply
to baggaee and aoods exported by post." ·
10-Lt061SupCl/27
878
SUPREME COURT REPORTS
[1972] 3 S.C.R.
The appellant contended that the shipping bill was presented A
on 1 August, 1966 and the order of the Customs authorities for
entry outwards to the vessel was also given on 1 August, 1966,
and, therefore, the export in the present case was not liable to
payment of duty imp<ised on 2 August, 1966. The Customs
authorities on the other hand contended that the vessel arrived at
Marmagoa on 3 August, 1966 and the vessel commenced loading B
on 3 August, 1966, and, therefore, the shipping bill which had
been presented before the date of entry outwards 'shall be deemed
to be presented at the earliest on 3 August, 1966 when !li:e vessel
in question arrived'.
The shipping bill under the Customs Act means a shipping bill
referred to in section. 50 of the Act.
Section 50 is as follows :-'-
C
"50 (1). The exporter of any goods shall make
entry thereof by presenting to the proper officer in the
case of goods to be exported in a vessel or aircraft, a
shipping bill, and in the case of goods to be exported by
land, a bill of export in the prescribed form.
( 2) The exporter of any goods, while presenting a
shipping bill or bill of export, shall at the foot thereof
make and subscribe to a declaration as to the truth of
its contents".
D
In the present case, it is common case that the shipping bill was
E
presented to the Customs authorities on 1 August, 1966 and the
Customs authorities made several endorsements on the shipping ·
bill. on the same day.
These endorsements permitted export after
examjnation, if necessary.
The_ further endorsements on the
shipping bill on 2 August, 1966 indicated that the shipment was
inspected, checked and payment in full was made.
Section 51 of the Act is as follows :-
"Where the proper officer is satisfied that any goods
entered for export are not prohibited goods and the
exporter has paid the duty, if any, assessed thereon and
any charges payable under this Act in respect of the
same, the proper officer may make an order permitting
clearance and loading of goods for exportation".
F
G
In the present case, the Customs authorities made endorsement
on the shipping bill on 1 August, 1966 permitting export after
examination, if necessary.
The shipping bill described the goods
as 'free goods'.
Export licence was also granted on that shipping :u
bill.
Sections 50 and 51 of the Act deal with entry of goods for
exportation and clearance of goods for expOrtation. · The word
A
B
G •. N. AGARWAL v. P. S. RAMAN (Ray, J.)
879
'entry' is defined in section 2 ( 16) of the Act in relation to good~
exported in a vessel to mean an entry made in a shipping bill.
Entry outwards of a vessel is dealt with in section 39 of the
Act. Section 39 is as follows :-
"The master of a vessel shall not pennit the loading
of apy export goods, other than baggage and mail bags,
until an order has been given by the proper officer
granting entry-Outwards to such vessel".
Proper officer mentioned in section 3 9 of the Act is defined in
section 2 ( 34) of the Act in .relation to any functions to be perC
formed under this Act to mean the officer of customs who is
assigned those functions by the Board or the Collector of Customs.
Section 39 contemplates an order by the proper officer granting
entry outwards to such vessel. In the present case, the agents of
the ship made an application 30 July, 1966 for entry outwards of
the vessel.
The Assistant 'Collector of Customs, Marmagoa
granted permission on 30 July, 1966 to ship cargo on board the
D
vessel.
Under section 39 of the Act loading of goOds is not permissible until an order is made granting entry outwards to the
vessel.
In the present case, the Customs authorities on 30 July,
1966 made an order granting entry outwards to the vessel.
Under section 16 of the Act the date of presentation of a
E
shipping bill is the relevant date for detennination of rate of duty
· and tariff valuation applicable to export goods.
Under the proviso to section 16 of the Act however there is a fictional date for
determination of such duty.
The fiction is introduced by providing for the date of entry outwards of the vessel to be relevant date
in case where the shipping bill has been presented before the date
of entry outwards. of the vessel.
The date of entry outwards of
F
the vessel is the order made under section 39 of the Act.
Section 38 of the Sea Customs Act 1878 was the counter-part
of section 16 of. the Customs Act, 1962.
Section 61 of the Sea
Customs Act, 1878 was the counter-part of section 39 of the
Customs Act, 1962.
Under section 38 of the 1878 Act the rate
G
of duty was the rate in force when the shipping bill was delivered
under section 137 of the 1878 Act.
Section 137 of the 1878
Act provided for clearance of goods for shipment by delivery of
shipping bill, payment of duties and the passing of the shipping
bill by the Customs authorities.
Section 38 of the 1878 Act had
two provisos.
Under the first proviso to that old section where
ll the shipment was permitted without a shipping bill, or in anticipation of the delivery of a shipping bill, the rate of duty was to be
the rate in force at the time when the shipment of goods commenced.
Under the second proviso to section 38 of the 1878 Act
,
880
SUPR!iMB COURT REPORTS
[1972] 3 s.c.R.
·where the shipping bill was m anticipation of the arrival of aay
A.
vessel or before an order was given for entry outwards of the
vessel the shipping bill must be deemed to have been delivered on
the date on which that vessel arrived or entry outwards was given
whichever was later.
Under the provisions of section 38 of the
1878 Act the Customs authorities had power to apply the rate in
force on the date of the arrival of the vessel.
Under section 16
B
of the 1962 Act it is not permissible to do so.
The statute does
not contain such a provision.
Section 16 of the 1962 Act speaks
of the fictional date only in relation to the order of date of entry
outwards· of the vessel.
In the pre.sent case, the order of entry
outwards of the vessel was made prior to 2 August, 1966. Therefore, the Customs authorities in the impugned order acted without C
jurisdiction in imposing duty on the export by holding that the
·date of entry outwards of the vessel was the date "when the vessel
arrived".
For the foregoing reasons the appellant is entitlt<d to an order
cancelling the notice dated 28 January, 1967 by which the Customs authorities demanded duty from the appellant.
The order
D·
of the Judicial Commissioner is 5et aside.
There will be a writ
setting aside the _notice dated 28 January, 1967 and an order for
bearing the respondents from taking any steps or proceedings
pursuant to the notice dated 28 January, 1967.
There will also
be an order quashing the order of the Assistant Collector of
Customs dated 19 April, 1967 which gave effect to the notice and
E.
held the appellant liable to pay the export duty.
The appeal Is
allowed.
In the facts and circumstances of the case each party will pay
and bear their own costs.
s.c.
Appeal allowed.