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M/s India Tourism Development Corporation Versus Commissioner of Customs (Airport CSI) , Mumbai

2016 (2) TMI 541 - CESTAT MUMBAI

Remission of duty on warehoused goods - Demand of duty on goods stocked in Duty Free Shops (DFS) whose Bond period had expired - Private Bonded Warehouse in Domestic Tariff Area (DTA) - damage to the goods in the arrival hall DFSs due to unprecedented floods on 26 th July, 2005. - they applied for waiver of Custom duty and for permission to destroy the goods rendered unfit. They wrote on 25/2/2008 for relinquishment of the title to the flood affected goods and remission of duty. - Held that: .....

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iry of the bond period. - Appeal dismissed - Decided against the appellant. - Application No. C/S/94811/14-MUM, Appeal No. C/8644/14-MUM, C/CO/91046/15-MUM - Final Order Nos. A/3734-3735/2015-WZB/CB and Stay Order No. S/481/2015-WZB/CB - Dated:- 24-11-2015 - P. S. Pruthi, Member (T) And Ramesh Nair, Member (J) For the Appellant : Shri Ramesh Ramamurthy, Adv For the Respondent : Shri S J Sahu, Asstt. Commissioner ( A.R. ) ORDER Per P. S. Pruthi The Stay Application and Appeal arise from the Commi .....

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departure area in the Mumbai, International Airport. Warehouse in DTA as well as DFS were licensed under Section 58 of the Customs Act as provided Bonded warehouses. At all times, the goods were transferred from the bonded warehouse in DTA within the permissible warehousing period and entries were made in the Bond register on such transfer, which took place under escort. However the requirement of procedure and records, Bond wise and Bill of Entry wise were only maintained in the DTA warehouse. .....

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Section 59(2) of the Customs Act covered goods stored in the DTA as well as in the DFS. Before expiry of the bond period of 6/12/2008 appellant had closed their DFS operation from January, 2008. The DFS were operated without double lock system as existed in the DTA warehouse. The requirement of Section 62(2) relating to removal of goods from bonded warehouse without permission of the proper officer was not applicable to the DFS. 2.1 The issue in the present case arises from damage to the goods .....

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d Appellate Authority rejected their case. Further Writ Petition No. 1588 of 2012 was disposed of by the Hon'ble Mumbai High Court vide order dated 14/3/2013 granting liberty to them to approach CESTAT. 3. Ld. Counsel for the appellant contended that in a similar case in respect of DFS at International Airport, at Goa, the Hon'ble CESTAT vide its order A/902/12/CSTB/C-I dated 21/11/2012 decided in favour of appellant. He also referred to the decision of the Hon'ble Supreme Court in C .....

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es of goods shall be received in the Duty Free Shop, only under Customs supervision: (i) goods imported by sea or air for being directly warehoused in the Duty Free Shop. (ii) Goods imported by post for being directly warehoused in the Duty Free Shop. (iii) Imported non duty paid goods already deposited in a Customs Warehoused, transferred in bond to the Duty Free Shop; and ………. 5. The licensee shall enter the receipts in Stock Register to be maintained commodity wise and se .....

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elease application (Appendix V). 6. i) The imported or indigenous, non duty paid goods permitted to be received and stocked in the Duty Free Shop shall be sold by the licensee only to persons proceeding out of India i.e. transit passengers and embarking passengers, on obtaining from them payment in approved foreign currencies. ii) Every sale shall be covered by a Sale Voucher (which shall be deemed to be the Shipping Bill for the purpose of Section 69 of the Customs Act, 1962) in the form prescr .....

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They shall also check that all sales made during the week have been adjusted in the Stock Books with reference to the Sale Vouchers issued. 5.1 Further, we find that Standing Order No. 2/2004 dated 30/3/2004 gives instructions on the accounting procedure for closure of Bonds in DFSs operation. Relevant paras of this Standing order are reproduced below: 1. The procedure for the receipt, sale and accounting of imported and non-duty paid goods for the Duty Free Shop at the airport is prescribed by .....

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t. 2. ……. The closure of the bonds executed by M/s. ITDC for the goods imported by sea or air and to be sold from the duty free shops at the airport has been engaging attention, therefore with the view to streamline the movements of inbonded goods and closure thereof over a period of time, the procedure prescribed for accounting purpose is as follows……….. 3. The goods received under bond are stored for the purpose of sale in the shops located at different place .....

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show the opening, receipt, sale and closing balance of their stock and shall make the entries of sale and closing balance in their stock register on monthly basis for each bond on the basis of "first come first sale"…… 5. As and when a Bond is exhausted, i.e. all goods pertaining to a Bill of Entry are sold, the same shall be shown as NIL in the column of closing balance of the stock register and the bonder shall put up all the documents relating thereto i.e. duplicate B .....

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ioner/Dy. Commissioner of Customs (Bond) New Customs House, Mumbai for the purpose of cancellation of the bond. When the whole of the goods covered by the bond Bill of Entry have been exported of otherwise duty accounted for and when all amount due on account of such goods have been paid, the Asstt. Commissioner/Dy. Commissioner of Customs (Bond) New Custom House, Mumbai shall cancel the bond for that particular Bill of Entry from the General Bond executed by the Bonders. 6. The main contention .....

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rence to the inbond Bill of Entry. And the Standing Order dated 30/3/2004 clearly provides for accounting procedure for the closure of bond. It lays down that the bonder has to maintain record of goods for each Bond. Further only if a Bond is exhausted, i.e. the goods pertaining to a Bill of Entry are sold, Asstt. Commissioner/Dy. Commissioner shall cancel the bond for that particular Bill of Entry. The auditor shall scrutinize documents including Bill of Entry. In our considered view, legally a .....

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for DFS issued under Section 58 of the Customs Act. Some of these Licenses appear at exhibit QQ (Copy of Sur Rejoinder by the department) which appear at page 197 of the paper book filed by the appellant. One such Licence appears at page 231 of the paper book. This licence is shown as renewed from time to time quite regularly. Condition No. 3 of the Licence at page 232 reads as "3. The package and their disposition in the warehouse shall be such that the every package is easily accessible .....

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licence. In the event of failure to do so no clearance shall be permissible between the period after the expiry of the licence and its renewal." It is clear that the appellant were required to extend the bond period till the disposal of the goods. 6.1 The Adjudication order under para (1)(c) clearly brings out that appellant produced a statement (Annexure-3) containing entries of flood affected warehoused goods in103 demand notices. These entries proved that warehoused goods in the 103 dem .....

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the fact that the bond period of the goods for which remission was sought had already expired. 8. We also note from the records that vide their letter dated 30 th August, 2007, Executive Manager, Shri. Arun Kapoor of M/s. ITDC had acknowledged to the Asstt. Commissioner, Customs that they had started maintaining the stock bond wise in the DFS from September, 2004. This also belies the contention of the Ld. Advocate that they were not required to maintain the stockbond wise and Bill of Entry wise .....

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nce has been committed. In the present case offence of not extending the bond period was committed and such goods are to be treated as goods improperly removed in terms of Section 72(1)(b) for violation of Section 61(1)(b) as goods had not been removed before the expiry of the bond period. Reliance placed on the case of Kesoram Rayon vs. Commissioner of Customs [1996 (86) ELT 464 (SC)], in which the Hon'ble Apex Court held that: "Goods which are not removed from a warehouse within the p .....

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fore, the principle in this issue stands decided as above. The same view was taken by the Hon'ble High Court of Karnataka in case of Commissioner of Central Excise Mysore -II vs. Decorative Laminates (I) Pvt. Ltd. [2010 (257) ELT 61 (Kar)]. It was held that: " Therefore the expression "at any time before clearance for home consumption" would mean the time period as per the initial order during which the goods are ware housed or before the expiry of the extended date for cleara .....

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hellip;In this context the decision of the Bombay High Court in the case of Videocon International Ltd. is applicable and therefore the authorities concerned were justified in making demand for payment of customs duty. Whereas the decision of this Court in i2 Technologies Software Private Ltd. are not applicable considering the facts of the present case." We find the provisions of Section 23 and Section 69 are similar. Both provide that the title to the goods may be relinquished before an o .....

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