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2015 (3) TMI 776 - MADRAS HIGH COURT

2015 (3) TMI 776 - MADRAS HIGH COURT - 2015 (320) E.L.T. 750 (Mad.) - Extension of warehousing period - petitioner failed to discharge its duty by not paying the duty due on the warehoused goods as undertaken by it - detained goods were sold in e-auction - said sale proceedings came to be cancelled since the bidder had not fulfilled the terms. - Held that:- request for re-export of the goods could be allowed even if the maximum period of warehousing had expired and demand notices had been issued .....

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xtension of the period. It is no doubt true that warehousing is permissible even beyond the period fixed by the statute, subject to payment of interest on the amount of duty on the warehoused goods towards permissible period, however, it is to be noted that mere seeking for extension of the period does not serve the purpose and there should be a reasonable cause has to be shown for such extension. In this case, the petitioner company, right from the inception, has been seeking for extension of t .....

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cision of Union of India v. Shakti LPG Ltd. [2008 (2) TMI 25 - SUPREME COURT] - Decided against assessee. - Writ Petition No.15103 of 2014 And M.P.No.1 of 2014 - Dated:- 4-3-2015 - The Honourable Mr. Justice S. Vaidyanathan,J. For the Petitioner : Mr. Vijay Narayan, SC For the Respondent : P. Saravana Sowmiyan, Mr. K. Mohana Murali ORDER This Writ Petition has been filed, praying for the issuance of a Writ of Certiorarified Mandamus, to call for the records of the 3rd respondent by proceedings i .....

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cided to bond the said goods as per the provisions of the Customs Act, 1962 in Customs Bonded Warehouse without payment of duty pending clearance. Accordingly, the above said four Bills of entry were permitted to be kept in the bonded ware house by the second respondent. Later, the petitioner company was declared as sick unit and since the goods were not cleared, the second respondent issued a detention notice, dated 15.4.2008 under Section 72(1) of the Act. As per Section 61(1) (b) of the Act, .....

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est @ 15% p.a. under Section 72(1) of the Act. However, pursuant to the said notice, it appears that the petitioner sought for extension of warehousing period for further period of one year. Since the bond interest payable under Section 61(2)(i) & (ii) of the Act read with Board s Circular No.47/2002, dated 20.7.2002 was not paid, the request made by the petitioner for extension of the period was not considered and accordingly, a notice dated 15.4.2008 was issued under Section 72(2) of the A .....

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f the Act as the petitioner had executed a double duty bond, undertaking to pay the duty, interest, etc., and clear the goods within the permissible bonding period and agreed to honour their commitment failing which the petitioner agreed that the said bond can be enforced by the second respondent for recovery action under Section 142 of the Act. Though, more than 16 years have passed since then, the goods still remained unclear insider the warehouse, which prompted the second respondent to issue .....

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₹ 2,26,55,556/- to one Sri Shiva Impex, Chennai, which stood as highest bidder. 3. According to the petitioner, the above said auction proceedings were cancelled due to non-payment of post bid EMD/SD and thereafter, the first respondent again called for fresh e-auction in respect of the petitioner s goods on 17.2.2012 4. Sections 61 and 72 insofar as relevant for the purpose of the case on hand, are reproduced below: 61. Period for which goods may remain warehoused. (1) Any warehoused good .....

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officer has made an order under Section 60 permitting the deposit of the goods in a warehouse: Provided that (i) * * * (A)-(B) * * * (ii) in the case of any goods referred to in Clause (b), if they are likely to deteriorate, the aforesaid period of one year may be reduced by the Commissioner of Customs to such shorter period as he may deem fit: * * * 72. Goods improperly removed from warehouse, etc. (1) In any of the following cases, that is to say, (a) * * * (b) where any warehoused goods have .....

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t prejudice to any other remedy, cause to be detained and sold, after notice to the owner (any transfer of the goods notwithstanding) such sufficient portion of his goods, if any, in the warehouse, as the said officer may select. 5. It is not in dispute that the present case would fall within the scope of Section 61(1)(b) of the Act. The facts of the case would reveal that the machineries and spare parts imported by the petitioner were warehoused initially for a period of one year, i.e. between .....

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amp; (ii) of the Act read with Board s Circular No.47/2002, dated 20.7.2002 was not paid, the request made by the petitioner for extension of the period was not considered and accordingly, a notice dated 15.4.2008 was issued under Section 72(2) of the Act, detaining the said goods for disposal with grace period of 5 days for payment of duties and interest. Thereafter also, the petitioner made requests for extension of the period, which were not considered and in the mean time, the Private Bonded .....

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said bond can be enforced by the second respondent for recovery action under Section 142 of the Act. Though, more than 16 years have passed since then, the goods still remained unclear insider the warehouse, which prompted the second respondent to issue notice, dated 25.3.2008 under Section 72(1) of the Act demanding customs duty after applying the rate of duty prevalent on the last date of validity period namely, 22.7.1997 along with interest @ 15% therein, followed by detention notice, dated 1 .....

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ular dated 14.1.2003 would contend that though the Statute fixed the maximum period of warehousing as one year, however the Circular issued by the Board under Section 151-A of the Act, made a clear departure from the provisions of the Act. The Circulars dated 14-1-2003 deals with the special grant of the warehousing period by the Chief Commissioner under Section 61. The said circular reads as under: The matter has been examined in the Board. It has been decided that in case an importer makes a r .....

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usal of the above would reveal that the request for re-export of the goods could be allowed even if the maximum period of warehousing had expired and demand notices had been issued and even if it had been decided to put the goods to auction. However, considering the facts and circumstances of the case, I am of the considered view that the above said circular would not apply to the present case, inasmuch as the warehoused goods were not only decided to put on auction, but also they were already p .....

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ssible period, however, it is to be noted that mere seeking for extension of the period does not serve the purpose and there should be a reasonable cause has to be shown for such extension. In this case, the petitioner company, right from the inception, has been seeking for extension of the warehousing period from time to time though citing reasons that the company was declared sick, etc., but there was no genuineness in its attempt in clearing the goods even after expiry of extended period. Kee .....

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documents such as invoice, agreement, etc., have been produced by the petitioner to prove the claim and that the petitioner has failed to discharge the duty due on the warehoused goods as undertaken by it vide Bond executed by it and delayed the payment of customs duty and other charges for the past 16 years. In para 9 of the impugned order, the third respondent has mentioned to the following effect: 9. As regards your request for re-export, it is stated that such request entails extension by th .....

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t Judgment (M/s.Kesoram Rayon versus Commissioner of Customs, Calcutta 1996(86) ELT 464 (SC)), these goods have ceased to be warehoused goods and as such your request for re-export is not legally tenable. As considerable time elapsed with no proof produced towards payment of bond interest, your above request made to the undersigned is not legally proper. Besides, it has since been ascertained from the Asst.Commissioner of Customs, Warehouse and Disposal unit that the said goods were sold in an e .....

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Further, in a very similar set of facts and circumstances, the Hon ble Supreme Court in Union of India v. Shakti LPG Ltd., (2008) 4 SCC 496, has ruled out the applicability of the so-called Circular, dated 14.1.2003 on which, the learned senior counsel has placed reliance, in the circumstances where the goods were already put on for sale by way of e-auction. The Hon ble Supreme Court has held as under in para 18 to 21: 18. Mr Sunil Kumar, the learned Senior Counsel has, however, submitted that .....

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remarks that clarifications had been sought whether goods imported and bonded in a warehouse could be permitted to be cleared for export under Section 69 of the Act even though demand notices under Section 72 had been issued upon expiry of the initial or the extended period of warehousing. The circular then goes on to read: The matter has been examined in the Board. It has been decided that in case an importer makes a request to permit re-export of the goods under Section 69 of the Customs Act, .....

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