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2020 (2) TMI 705 - SC - CustomsCalculation and Recovery of customs duty - auction sale of warehoused goods - distribution of sale proceeds - argument of Revenue is that the distribution of sale proceeds has to be in accordance with Section 150 of the Act as there is a specific provision concerning custom duty charges which will have precedence over recovery of warehouse charges under 150(2)(e) of the Act - whether the calculation of the custom duty would be assessed as on the date of the deemed removal of goods from the warehouse in terms of Section 61 as interpreted by this Court in Kesoram or on the date of sale for the reason that the importer has failed to seek clearance of the goods imported? HELD THAT:- As per the appellants, the right to recover customs duty is superior to the right to recover warehouse charges in terms of Section 150 of the Act and that sale was conducted under Section 72 and not under Section 63 of the Act. If the contention of the Revenue is to be accepted, the custom duty will be much more than the price received in tender sale. However, if the date of calculation of custom duty is treated to be the date of sale, the demand of sum of ₹ 27,47,146/- would be untenable - The appellants have referred to a communication dated 16th April, 2004 wherein the respondent was called upon to clear the goods after the expiry of extended period failing which payment of full amount of duty will be payable together with all rent, penalties, interest and other charges. KESORAM RAYON VERSUS COLLECTOR OF CUSTOMS, CALCUTTA [1996 (8) TMI 109 - SUPREME COURT] is a case where the importer claimed levy of custom duty which remained in bonded warehouse beyond the permitted period claiming that the duty as is applicable on the date the goods were sought to be removed for home consumption, will be chargeable. This Court found that the goods can be kept in a warehouse in terms of the period specified under Section 61 of the Act and, therefore, Section 68 and Section 15(1)(b) apply only when the goods were cleared from the warehouse within the permitted period or with permitted extension and not beyond the permitted period or permitted extension - The present case is not a case of levy of custom duty on the importer. The importer has not sought the release of goods within the permitted period of warehouse. Therefore, the judgment in Kesoram will not be applicable in respect of the goods to be auctioned on account of failure to seek the release of imported goods by the importer though after the permission from the proper officer. In view of the Circular issued by the Central Board of Excise & Customs, the custom duty is to be calculated on the sale price and not on the duty as is payable on the date of deemed expiration of permitted period of warehouse. Such Circular of the Board is binding on the Revenue. Therefore, the custom duty has to be paid on the basis of sale proceeds realised from the sale of the goods kept in a warehouse and not on the basis of the custom duty payable at the time of filing the Bill of Entry or on the date of expiry of permitted period of warehouse. The present appeal is disposed of with directions to ascertain the customs duty keeping in mind the dispensation indicated in the enabling provisions of the Customs Act, 1962 and Chapter 21 of Central Board of Excise and Customs Manual read with circular dated 20th November, 2011 and adjust the same as per the priority specified in Section 150(2) of the stated Act - Appeal disposed off.
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