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2024 (4) TMI 41 - AT - CustomsWarehousing of imported Goods without payment of duty - Compliance with the requirements of legal provisions or not - making an entry of the imported goods under Section 46 of the Customs Act, 1962 - clearance of goods for deposit, manufacturing in private bonded warehouse in terms of legal provisions under various Sections of Chapter IX ibid - eligibility for availing the benefit of Notification No. 50/2017-Customs dated 30.06.2017 on the impugned goods at the time of ex-bond clearance of final products manufactured in the private bonded warehouse - clearance of final products i.e., Boats, without paying the Customs duty on the raw materials used for making such boats - clearance of final products, without paying customs duty on the inputs, raw materials etc. HELD THAT:- In order to determine the appropriate duties of customs payable on any imported goods, an importer is required to file a Bill of Entry (B/E) giving all required particulars of such imported goods for assessment to duty and depending upon whether such imported goods are required for clearance towards warehousing or home consumption, such of the legal provisions governing warehousing or customs clearance for home consumption would apply on such goods - as provided in Annexure-A & B to the SCN dated 14.01.2022, the imported raw materials have been brought into the country by the appellants by filing various Bills of Entry for warehousing and the same were assessed to duty by the Customs officers at the port of import i.e., Air Cargo Complex, Sahar and seaport of Nhava Sheva. Thus, the appellants had complied with the requirements of Section 46 ibid by filing an entry on importation of the goods into the country, and there is no case for any non-compliance in this regard. It is also found that the finished goods manufactured out of such raw materials/ inputs imported as explained above, have also been removed from the private bonded warehouse by the appellants on payment of applicable import duties on the date of presentation of Bill of Entry in terms of Section 15(1)(b) ibid, by claiming exemption from basic customs duty under entry S. No. 558 of Notification No. 50/2017-Customs dated 30.06.2017 and upon payment of effective rate of IGST at 5% as per S. No. 250 at Schedule-I of Notification No. 1/2017-Integrated Tax (Rate) dated 28.06.2017. These clearances of final product i.e., Boats classifiable under CTI 8906 9000 from the appellants private bonded warehouse have been duly assessed and after payment of duty as determined by the Customs authorities of New Custom House, Mumbai, these goods have been allowed for home consumption clearance. It is also not the case of the Revenue, that there was any short payment of duty that is being demanded in respect of final products cleared from the appellants’ private bonded warehouse. The appellants importer have duly complied with the requirements of legal provisions for making an entry of the imported goods under Section 46 of the Customs Act, 1962, and for clearance of goods under warehousing provisions contained under Chapter IX of the Customs Act, 1962. The only situation under which the GST is payable in respect of warehoused goods, is provided under 8A of the Customs Tariff Act, 1975 to state that “where the goods deposited in a warehouse under the provisions of the Customs Act, 1962 (52 of 1962) are sold to any person before clearance for home consumption”. Thus, in respect of the imported raw materials which have been used in the manufacture of final products under a private bonded warehouse, as there is no clearance for home consumption by person by sale, we find that there is no situation arising for the levy of GST under the provisions of Section 8A ibid. Payment of IGST on the imported raw materials/inputs taken into the private bonded warehouse of the appellants importer - HELD THAT:- In terms of Schedule-III entry at 8(a) to Section 7 of CGST Act, 2017 it has been specifically provided that the same shall not be treated as ‘supply’ of goods. Thus, no IGST would be leviable on such imported raw materials consumed in the manufacture of the final products. It is found that it is only in respect of the final products manufactured from the private bonded warehouse, at the time of its clearance, the appellants are required to pay the applicable duties, under Section 68 ibid. In other words, appellants importer as a unit licensed under Sections 58 and 65 ibid was permitted to import capital goods, raw materials etc. and warehoused them without payment of duty. Manufacture and other operations in a bonded warehouse is only a duty deferment scheme and the applicable duties is payable at time of clearance of final products - The capital goods can be cleared for home consumption as per Section 68 read with Section 61 of the Customs Act on payment of applicable duty without interest. The capital goods can also be exported after use, without payment of duty as per Section 69 of the Customs Act. In the present case, the adjudged demands is not in relation to the demand of import duty in respect of final products cleared from the warehouse. The imported raw materials/inputs used in the manufacture of final products under a Customs bonded warehouse in terms of Section 58 and 65 of the Customs Act, 1962 are not liable for payment of import duties at the time of clearance of such final products manufactured in the said customs bonded warehouse - the impugned order dated 10.01.2023 passed by the learned Commissioner of Customs (Import), Air Cargo Complex (ACC), Sahar, Mumbai by confirming the adjudged demands is not sustainable and thus, the same is set aside. The appeals are allowed in favour of the appellants.
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