Customs – Gujarat High Court: Even though the goods were re-exported, but as the goods remained in warehouse beyond permitted period, thus, Respondent/ owner of the goods would be liable to pay full amount of duty with interest and penalty, as if the goods are to be cleared for home consumption - Circular cannot have an overriding effect on a statutory provision – Revenue appeal allowed [Order attached]
Order date – 02 January 2023
Parties: Commissioner of Customs Vs Baroda Rayons Corporation Ltd
- The Respondent, M/s Baroda Rayons Corporation Ltd., submitted an application on 26.10.2006 requesting the department for permitting transfer of the bonded plant and machinery / equipment lying in the private bonded warehouse outside the factory premises to inside factory premises at Surat.
- Though applications for extension were made, same was not granted and petitioner was not able to clear the imported plant and machinery / equipment from their bonded warehouse after the expiry of permitted extended warehouse.
- This resulted in adjudication and the department had issued 16 orders-in-original, all dated 30.3.2001 and confirmed the total custom duty of Rs.05,30,36,179/- and imposed penalty of 10% on each bond.
- Thereafter, request for extension of the warehousing period has been rejected in 1998 and show cause notices of consignment were already issued, permission was not granted.
- Despite there being no permission accorded, petitioner shifted plant and machinery / equipment and requested for re-export on 06.10.2008, 15.11.2018, 03.12.2018, 15.02.2019. All the request were rejected on the ground that show cause notices had been issued and demand has been confirmed upto the level of Tribunal and the issue had attained finality.
- Whether Respondent is liable to Customs duty, interest on penalty on account of delay in clearance of goods from warehouse ?
- The Hon’ble High Court held that under the communication dated 07.03.2019, the authority has neither adjudicated nor examined the claim of the respondent or the prayer of the respondent in the capacity of an adjudicating authority and as such, the signatory to the said communication cannot be held to fall within the definition of ‘Adjudicating Authority’ as defined under Section 2(1) of the Act so as to bring such communication within the sweep of the provisions of either order or decision as indicated in Section 129A. Hence, the issue of jurisdiction is answered in favor of the Revenue.
- As per section 72 when the goods are cleared from the warehouse after the expiry of the permitted period or its permitted extension, the goods are deemed to have been improperly removed. In the instant case, the goods remained in warehouse beyond permitted period. Thus, the owner of the goods would be liable to pay full amount of duty with interest and penalty, as if the goods are to be cleared from home consumption.
- Section 72 provides for clearance of the goods by the importer within a stipulated period either for home consumption or for re-export and in the eventuality of such importer failing, then it is deemed that such goods are to be cleared for home consumption and thereby the importer would be liable to make payment of applicable customs duty with interest and penalty.
- The Circular No.03/2003-CUS dated 14.01.2003 allowing re-export cannot be read in isolation or it cannot be read against Section 72 which empowers the Revenue to demand payment of duty in case warehoused goods are not cleared within the permitted time.
- Hence, the Revenue-Appellant appeal is allowed.