The aspect of “in the course of import”
The BoE is presented for the computation of the customs duty. Once the customs duty is paid, the import process, so far as the customs authorities and the Customs Act are concerned, ends. The DO is then issued by the shipper upon proof of payment of customs duties and its own charges. The DO does not form part of the chain of the import process and the taxing event occurs beyond the course of import. Thus, it was held that DO is not an integral part of the chain of events in the course of import of goods.
It was held that the process of transfer of title in the goods in the course of import is separate, independent, and distinct from a DO. The DO entitles the person named therein or the holder to the delivery of goods. The transfer of title or ownership in the goods is independent of the entitlement of a person to receive delivery after discharging the dues of the carrier.
It was held that the phrase ‘customs frontier’ cannot be equated with a geographical boundary. As per the settled position in law, the ‘customs frontier’ is a concept in a time sequence, viz., that point in the process where the taxing and jurisdictional remit of the customs ends. This has nothing at all to do with physical or geographical borders. Consequently, it was held that the minute the customs duty is paid and cleared (along with any other dues legitimately recoverable by customs), the customs ‘frontier’ ends.
The DO in question in this group of cases only springs into being when that frontier has ended, that is, after the process of assessment and recovery of customs duty is complete. The BoL, a document of title, originates when goods are laden on the vessel. It is the first in point of time. The BoE, as the Hon’ble Gujarat High Court judgments point out, is for the purposes of customs duty assessment. This is second in point of time. The DO comes into existence as a third part of the time sequence, after the customs duty, dues, freight, etc., are paid and the goods are lien-free, that is, available for delivery. The ‘customs barrier’ is, therefore, not a physical ‘barrier’ per se, but speaks of a point in time after the role of customs has ended.
Source: Barandbench
