Taxability of customs duty
Customs duty is on imports into India and export out of India. Section 12 of
Customs Act, often called charging section, provides that duties of customs
shall be levied at such rates as may be specified under ‘The Customs Tariff
Act, 1975’, or any other law for the time being in force, on goods imported
into, or exported from, India.
There are many common provision and/ or similarities in CGST and
Customs Law. Administration (CBI&C) is common. Provisions of Tariff,
principles of valuation, refund, demands, exemptions, search, confiscation
and appeals are similar.
In case of imports, taxable event occurs when goods mix with landmass of
India – Kiran spinning mills v. CC 1999(113) ELT 753 = AIR 2000 SC 3448 (SC
3 member bench).
In case of warehoused good, the goods continue to be in customs bond.
Hence, ‘import’ takes place only when goods are cleared from the
warehouse – confirmed in UOI v. Apar P LTD. 112elt3 = 1999(6) SCC 118 =
AIR 1999 SC 2515 (SC 3 member bench).- followed in kiran spinning Mills v.
CC 1999(113) ELT 753 = AIR 2000 (SC 3 member bench).
In case of exports, taxable event occurs when goods cross territorial water
of India – UOI v. Rajindra dyeing and Printing Mills(2005) 10 SCC = 180 ELT
Territorial water of India extend up to 12 nautical miles inside sea from
baseline on coast of India and include any bay, gulf, harbor, creek or tidal
river. (1 nautical mile = 1.1515 miles =1.853 Kms). Sovereignty of India
extends to the territorial waters and to the seabed and subsoil underlying
and the air space over the waters.
‘Exclusive economic zone’ extends to 200 nautical miles from the base-line.
Area beyond that is ‘high seas’.
Indian customs water extend up to 200 nautical mile inside sea. Powers of
customs officers extend up to 200 nautical miles inside sea