2006 (6) TMI 326 - AT - Central Excise

Summary

Issues:
1. Termination of Custodianship of the appellant by the Commissioner of Central Excise & Customs, Visakhapatnam-II Commissionerate.
2. Compliance with conditions stipulated in Public Notices 82/2001 and 83/2001.
3. Delay in clearance of imported goods and its impact on Custodianship.
4. Storage of consignments in separate tanks as per Bill of Lading.
5. Requirement of additional bank guarantee.
6. Termination of Custodianship before passing of adjudication order.
7. Violation of Principles of Natural Justice.
8. Right to Trade as a Fundamental Right under Article 19(1)(g) of the Constitution of India.

Analysis:
1. The appellant requested approval for their storage terminal to be a landing place under the Customs Act, which was granted by the Commissioner through Public Notices 82/2001 and 83/2001. However, the Department raised concerns regarding delays in clearing goods, mingling of cargo, and non-compliance with additional bank guarantee requirements, leading to a Show Cause Notice for termination of Custodianship.

2. The learned Advocates argued that the appellant had not violated any conditions specified in the Public Notices and that delays in clearance should not be grounds for termination, especially since interest was paid for delays. They emphasized that there was no statutory requirement to store cargo Bill of Lading-wise in separate tanks.

3. The Tribunal observed that the Commissioner failed to demonstrate how the appellant breached the conditions outlined in the Public Notices. While acknowledging the 30-day clearance requirement, the Tribunal noted the significant investment made by the appellant in creating the infrastructure and the lack of necessity for separate tank storage based on the Public Notices.

4. Highlighting the premature termination of Custodianship by the Assistant Commissioner before the Commissioner's order, the Tribunal criticized the adjudication process as violative of Natural Justice principles. The Tribunal found the reasons provided for termination insufficient and ruled in favor of the appellant, emphasizing compliance with Public Notice conditions and the significant investment made.

5. The Tribunal upheld the appellant's right to retain Custodianship, setting aside the impugned order and allowing the appeal based on the lack of substantial grounds for termination and the importance of honoring the conditions specified in the Public Notices to protect the appellant's investment and rights under Article 19(1)(g) of the Constitution of India.