TMI Blog2016 (2) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... peal 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 Commissioner's Order-in-Appeal dated 25/8/2009 in which Commissioner upheld the order of the lower authority who had confirmed the demand of duty on goods stocked in Duty Free Shops (DFS) whose Bond period had expired. Cross objection is also filed by the Revenue. 2. Ld. Counsel appearing on behalf of the appellant explained that they were strong goods in their warehouse in the Private Bonded Warehouse in Domestic Tariff Area (DTA). They were also operating 2 DFS in the arrival area and 10 DFS in 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Apex Court held that goods sold at the DFS would be goods sold before they have crossed Customs frontier and no tax can be imposed on such goods. 4. Ld. A.R. appearing on behalf of the Revenue reiterates the findings of the lower authority. 5. We find that DFS operations are governed by Standing Order dated 13/5/1969. For convenience the relevant clauses are reproduced below: 2. The following classes 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 separately for (a) goods imported by sea, (b) goods imported by air, (c) goods imported by post, (d) goods transferred from another Customs Warehouse; and 9e) goods transferred from a Central excise bonded factory, in the form prescribed in this behalf by the Assistant Collector of Customs, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 places a the airport. There are five shops in 2A 2C Arrival Hall. The assorted goods from the shops are sold under various sale vouchers raised by shops for different items of each bonds and hence, it is difficult to make entries of sales of daily basis. Therefore, to ensure the proper monitoring of the goods covered by different bonds and timely closure of each bonds, the bonder shall prepare a consolidated monthly statement of their stock (of all shops) as prescribed in Annexure I which shall 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 bonde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is no bond period in respect of goods transferred from the DTA warehouse is not factually and legally correct. Factually, we have seen copies of some Licenses 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 for inspection and shall be stacked Bond cum item wise . The form of Bond stock book and stock cards to be maintained by the bonders is enclosed herewith. 8. The licence holder shall apply for renewal of the licence so that the application for renewal (in prescribed form) of the LICENCE should reach in this office at least TWO MONTHS before the date of expiry of the 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 renew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as goods improperly removed from the warehouse. Such improper removal takes place where the goods remain in the warehouse beyond the permitted period or its permitted 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. 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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