New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (11) TMI 444 - CESTAT MUMBAI

2015 (11) TMI 444 - CESTAT MUMBAI - TMI - Relinquishment of title to the goods under Section 68 - the demand of duty in respect of time expired warehoused goods - Penalty u/s 117 - Held that:- Apex Court certainly decided in the case [1996 (8) TMI 109 - SUPREME COURT OF INDIA] that the “Goods which are not removed from a warehouse within the permissible period are treated as goods improperly removed from the warehouse. Such improper removal takes place when the goods remain in the warehouse beyo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s in the present case.

plea that interest and penalty have been wrongly demanded under Section 47 and 117 is unacceptable. Mere quoting of another Section in the show cause notice when the appropriate Section has also been quoted does not make the confirmation of interest and penalty illegal. - Decided against assessee. - Application No. C/MA(ORS)95445/2013-Mum & Application No. C/S/95444/2013-Mum. In Appeal No. C/87027/2013-Mum. - Dated:- 27-8-2015 - Mr. P.S.Pruthi, Member (Technical .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

#8377; 1 lakh was also imposed under Section 117 and the request for relinquishment of title to the goods under Section 68 was rejected. Miscellaneous application is also filed praying for restraining Customs from initiating any recovery proceedings pending the hearing and final disposal of the appeal. An application for stay of penalty pending hearing of the appeal was also filed. These applications are also taken up along with the main appeal. 2. The appellant and their Associate companies sto .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

request was made on 23.10.2001 for bond extension and re-export in respect of 16 bonds (expired between June 2000 and May 2001) involving duty of ₹ 2.1crores plus interest. As the 100% EOU at Aurangabad was given permission in 2000 and all the bonds had expired prior to that, the request was not considered. Appellants were directed to clear the goods on payment of Customs dues vide department s letter dt. 30.1.2002. The appellants request for re-export of the goods under Section 69 vide S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xport were rejected by the Chief Commissioner and they were directed to pay duty and interest. The appeal against this rejection was rejected by Commissioner (Appeals) vide Order-in-Appeal dt. 17.3.2008 for want of jurisdiction. Against this order they went in appeal before CESTAT which was dismissed as withdrawn vide Order dt. 18.8.2009. On being sent a notice on 15.10.2009 for payment of duty, the appellant vide letter dt. 28.10.2009 sought relinquishment of the title to the goods in respect o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(Appeals) directed them to make pre-deposit of 60% of the entire demand. The appellant challenged this order before Mumbai High Court which disposed the case vide order dt. 8.5.2012 asking the Commissioner to hear the case. Finally the Commissioner passed impugned Order dt 18-03-2013 against which the Appellant are in appeal before us. 3. Heard both sides. 4. The Ld. Advocate appearing for the appellant raised some preliminary objections. He stated that Section 122 of the Customs Act limits the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was received in respect of only one Bond bearing No. GB/VIL/I-33 dt. 15.6.2004. He also objected that the show cause notice was issued under Section 124 which falls under Chapter XIV of the Act and contemplates SCN only for confiscation and penalty, whereas in the SCN issued, duties have been demanded under Section 72 falling under Chapter IX, which is beyond the scope of Section 124 of the Act. Further, the demand of interest under Section 47 can be raised only on filing of ex-bond Bills of Ent .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g under Chapter IX cannot be conducted under a show cause notice issued under Section 124 of the Act. 4.1. On merits it was emphasised that the show cause notice under Section 72 is a pre-requisite; otherwise no liability accrues. He relied on Sanjay Dhanuka Vs. Commissioner of Customs 1993 (66) ELT 361 (Cal.). He distinguished the case of Indo Pacific Polyfibres Pvt. Ltd. Vs. Commissioner of Central Excise & Customs, Belapur 2012 (280) ELT 97 (Tri. Mumbai) relied upon by department stating .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

under Section 72(1) or under Section 72(2) when the title was relinquished. He relied on the Karnataka High Court judgment in the case of Commissioner of Customs, Bangalore Vs. i2 Technology Software Pvt. Ltd. (supra). Countering the reliance placed by Revenue on the case of Kesoram Rayon Vs. Commissioner of Customs 1996 (86) ELT 464-SC., he stated that the Apex Court considered deemed removal only in the context of determination of rate of duties under Section 15(1) (b) of the Act and did not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fence because the custody of goods remains with the department. Therefore second proviso to Section 68 will not apply their case so as to prevent them from relinquishing the title to the goods. 4.3 Ld counsel distinguished the case of Commissioner of Central Excise Mysore-II Vs. Decorative Laminates (I) Pvt. Ltd. 2010 ((257) E.L.T. 61 (Kar.) relied upon by the Ld A.R. He contended that this case was dealing with Remission of duty under Section 23 and not with the relinquishment of title under Se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is no prohibition on relinquishment of the title to the goods after expiry of warehouse period. According to him the Department cannot rely on PSI Data System Vs. CC, Bangalore 2004 (163) ELT 302 (Kar.) because it was held that relinquishment of title is not permissible once the Customs authorities determine the duty. He contended that in the instant case for want of notice under Section 72(1), it cannot be said that duties have been determined Lastly, he stated that notices under Section 72(1) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act. 5. Ld. A.R. appearing for the department stated that the appellant received letters dt. 19.11.2007 (for 10 bonds) and dt. 5.12.2007 (for 14 bonds) in which they were directed to pay duty and interest while the permission for re-export was denied. Thereafter a few reminders were sent. Hence it is not correct to say that they (appellant) have not received any demand notice. Further the impugned Order is passed with reference to Section 72(1) and it not necessary to exhaust the option under Se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Section 117 is rightly invoked. 5.1 On the merits of the case, he relied on Videocon International Ltd. Vs. Union of India 2003 (155) ELT 25 (Bom.). As regards reliance placed by the appellant on the case of i2 Technology Software Pvt. Ltd. (supra) it was stated that a similar argument ( as made in that case) was made by the counsel in the case of Videocon International Ltd. (supra) which was not accepted by the Hon ble Mumbai High Court. According to him, the views of jurisdictional High Court .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Customs duty becomes immediately payable under Section 72 even when the Bill of Entry for home consumption has not been filed and the goods have not been actually removed from the bonded warehouse. He referred to the case of PSI Data Systems (supra) which held that abandonment/relinquishment of title of goods under Section 23(2) after lapse of many years is not allowed. In the case of Commissioner Vs. Decorative Laminates (I) Pvt. Ltd.(supra) it was held that the expression at any time before .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce the warehousing period has expired the goods are deemed to be improperly removed and the appellants are required to pay duty under Section 72(1) irrespective of the fact that the appellant wanted to abandon or relinquish the title to the goods. 6. We have considered the submissions made by both sides. There are some preliminary objections raised by the appellant which may be addressed first before coming to the core issue of this case. The first objection is that notices were never issued un .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e clearance within warehousing period, the duty becomes payable under Section 72(1). Thus the argument that Demand Notices were not issued is merely, in a manner of speaking, an effort in raising technicalities which have no substance. In our view this letter can be taken to be a notice under Section 72. Our view is supported by the facts stated in the Writ Petition No. 2238/2202. In this petition the entire history of the case up till that time was brought to the knowledge of the Honble High C .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ther objection raised is that the show cause notice dt 1.10.2010 which has led to the present Appeal was issued under Section 124 whereas the demands were confirmed under Section 72(1) of the Act. We find that Section 124 is merely mentioned in the caption of the show cause notice. The body of the show cause notice clearly refers to duty payable under Section 72(1) of the Act. Even in the final para of the SCN where the demand is actually raised, duty is demanded only under Section 72(1). Theref .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of Section 122 shows that the limitations clearly do not apply to cases where penalty is to be imposed and in the case at hand only penalty is proposed and not confiscation. 6.3 Another issue raised is that adjudication of relinquishment cannot be conducted under Section 124 of the Act. We find that the body and the final para of the SCN involve demand of duty under Section 72(1) and consideration of request of relinquishment under Section 68. And this is precisely what has been done. We find t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

een made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon. SECTION 68. Clearance of warehoused goods for home consumption. The importer of any warehoused goods may clear them for home consumption, if (a) a bill of entry for home consumption in respect of such goods has been presented in the prescribed form; (b) the import duty leviable on such goods and all penalties, rent, interest and other charges payable in respect of such goods have been paid; .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t the owner of any such warehoused goods shall not be allowed to relinquish his title to such goods regarding which an offence appears to have been committed under this Act or any other law for the time being in force. SECTION 69. Clearance of warehoused goods for exportation. (1) Any warehoused goods may be exported to a place outside India without payment of import duty if (a) a shipping bill or a bill of export has been presented in respect of such goods in the prescribed form; (b) the export .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tside India without payment of duty or may be allowed to be so exported subject to such restrictions and conditions as may be specified in the notification. SECTION 72. Goods improperly removed from warehouse, etc. (1) In any of the following cases, that is to say, - (a) where any warehoused goods are removed from a warehouse in contravention of section 71; (b) where any warehoused goods have not been removed from a warehouse at the expiration of the period during which such goods are permitted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ds together with all penalties, rent, interest and other charges payable in respect of such goods (2) If any owner fails to pay any amount demanded under sub-section (1), the proper officer may, without 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. The central issue to be decided is whether in terms of Section 68 pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent had addressed letters to the appellant as far back as 2002 asking them to deposit duty. The entire facts regarding notices issued, whether in the form of letters or otherwise, were in the knowledge of the High Court when it passed its Order dated 24-09-2002 rejecting the prayer of the appellant to allow the re-export. Therefore, raking up the same issue at this stage has no meaning. Reliance on the case of Sanjay Dhanuka (supra) also does not help because in that case no demand was issued un .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Thus in the present case the goods have to be treated as improperly removed. In such circumstances the proper officer may demand the full amount of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable. There is no doubt about this legal provision in the Act. 7.1 But the contention of the appellant is that even in respect of such goods which have outlived their warehousing period in terms of the Bond executed, the appellant are still enti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ead with the provisions of Section 68, it is clear that the goods remain warehouse goods even after the expiry of the period prescribed under Section 61. As such, since no order for clearance for home consumption was made in respect of the warehoused goods, they are entitled to relinquish the title to the goods in terms of the first proviso to Section 68. We find that the arguments raised by the Ld. Counsel now were also raised by them in Writ Petition 2238/2002 filed in the Mumbai High Court .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e proper officer may demand, and on such demand the owner of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods. In our view, Section 69 of the Act will operate only during the validity period of the warehousing under Section 61 of theAct and not thereafter. Once the period has expired, then Section 72 of the Act will operate and in the facts of this case Section 72(b) in particular will operate. Although the Ho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

re clearance for home consumption would mean the time period as per the initial order during which the goods are warehoused or before the expiry of the extended date for clearance and not any period after the lapse of the afore said periods. The said expression cannot extend to a period after the lapse of the extended period merely because the licence holder has not cleared the goods within the stipulated time.When the goods are not cleared within the period or extended period as given by the au .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Both provide that the title to the goods may be relinquished before an order for clearance of goods for home consumption has been made. In these circumstances, the decision of the High Court leads to the conclusion that the provisions of Section 68 regarding relinquishment will not be attracted when the goods are not cleared within the permitted period of warehousing. The Honble High Court having considered the judgement in the case of i2 Technology Software Pvt. Ltd. (Supra) before arriving .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he year 2009 i.e. after 8 years, that too when the judgment in the case of i2 Technology Software was delivered. It certainly appears that the appellant have tried to delay the payment of duties on some pretext or the other. As we have noted above, the judgments in the case of Videocon (supra), Decorative Laminate (supra) and PSI System (supra) have sealed their fate. The Tribunal in the case of Allied Fibers Ltd. (supra) also took this view. 7.4. The Ld. Counsel strongly argued that the judgmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ermitted extension. The importer of the goods may be called upon to pay Customs duty on them and, necessarily, it would be payable at the rate applicable on the date of their deemed removal from the warehouse, that is, the date on which the permitted period or its permitted extension came to an end . Therefore, the principle in this issue stands decided as above. 8. We would like to point out that the first proviso to Section 68, which allowed relinquishment, was introduced on 14.5.2003, that is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version