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2016 (8) TMI 396 - MADRAS HIGH COURT

2016 (8) TMI 396 - MADRAS HIGH COURT - 2016 (340) E.L.T. 162 (Mad.) - Warehousing application to be declared as sick company - inability to clear the warehoused goods re-export of imported goods warehouse license extended demand of duty and interest on warehoused goods detention of remaining goods for recovery of duty and interest by respondents auction of goods by respondents application before respondent to grant opportunity to export goods Circular dated 14.01.2003. - Held .....

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the respondents seeking permission to re-export the goods lying in the balance containers time limit for clearance granted is one year appeal allowed decided in favor of appellant. - Writ Appeal No.723 of 2015, MP.No.1 of 2015 - Dated:- 27-7-2016 - Huluvadi G. Ramesh And M. V. Muralidaran, JJ. For the Appellant : Mr. Vijay Narayan, SC for M/s.P.Saravana Sowmiyan For the Respondents : Mr. K. Mohanamurali JUDGMENT ( Order of the Court was made by Huluvadi G. Ramesh, J. ) Being aggrieved o .....

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required for production. Hence, taking into consideration of both the factors, the Appellant Company decided to bond the imported goods as per the provisions of Customs Act, 1962, in Customs Bonded Warehouse without payment of duty pending clearance. 2.2 As the Appellant Company was put to several crisis, they were constrained to approach the Board for Industrial and Financial Reconstruction (BIFR) to declare it as a Sick Company under the Sick Industrial Companies (Special Provisions) Act, 199 .....

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nance and Company Affairs, Department of Revenue, the respondents granted permission to re-export the imported goods. Accordingly, out of 200 containers, 139 containers were re-exported in the year 2005. Thereafter, by order dated 28.05.2007, the warehouse license was extended upto 24.03.2008. 2.4 While so, the second respondent issued a notice dated 25.03.2008 under Section 72(1) of the Customs Act, demanding payment of duty and interest on the warehoused goods. On the failure of the appellant .....

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Thereafter, BIFR proceedings came to an end and the appellant Company was declared as a Sick Industrial Undertaking. The Appellant Company has continuously taken efforts to find suitable buyer for exporting their goods, which have become obsolete. In the mean while, they came to know that the respondents were taking steps to auction the goods and hence, they filed a writ petition in WP.No.736 of 2012, which was disposed of by order dated 11.01.2012 by permitting the appellant to submit a repres .....

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or the Appellant submits that the appellant made strenuous efforts to re-export the imported goods and out of 200 containers, 139 containers were re-exported in the year 2005 itself and thereafter, they have taken vigorous steps to re-export the goods lying in the balance containers and the same could not be achieved due to lack of permission from the respondents, despite having prospective buyers. Learned senior counsel further submits that the Circular dated 14.01.2003 issued by the Government .....

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d 14.01.2003. However, without considering those aspects, the learned Single Judge dismissed the writ petition filed by the Appellant. 4. Per contra, learned counsel appearing for the respondents submits that more than fifteen years have lapsed from the date of issuance of bonding/warehousing permission, no tangible and legally acceptable action has been taken by the Appellant with reference to the goods in question. Learned counsel further submits that the Appellant has failed to discharge thei .....

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to a situation, where the goods had already been put to auction. 5. We have heard the rival submissions made on either side and perused the entire materials placed before this Court. 6. The facts made available herein would reveal that the Appellant Company had imported textile machineries along with auxiliary equipments consisting of 200 containers in the year 1996. Due to severe financial crisis, they have bonded the said containers in Customs Bonded Warehouse. However, they have taken strenu .....

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ot be re-exported for want of buyers. Thereafter, the Appellant sought for permission to re-export the goods lying in the remaining containers, which was rejected. In the mean while, the respondents conducted e-auction on 23.12.2011 with respect to the goods in question, but the same could not be materialized and hence, the sale proceedings were cancelled. In this regard, the highest bidders have initiated other proceedings, which culminated in dismissal. Be that as it may, questioning the rejec .....

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me Court in Union of India v. Shakti LPG Ltd, (2008) 4 SCC 496, it has been held that the applicability of the so-called Circular, dated 14.01.2003 was ruled out in the circumstances, where the goods were already put on for sale by way of e-auction. 8. Regarding the first ground, we are of the view that the Appellant has taken continuous steps to find out the suitable buyers for re-exporting their goods in question and they have also made several representations to the respondents seeking permis .....

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ods in question and one Sri Shiva Impex was declared as a highest bidder. However, the same was cancelled due to non-payment of post bid EMD/Security Deposit. Thereafter, the first respondent appears to have called for a fresh e-auction on 17.02.2012, which compelled the said Sri Shiva Impex to file WP.Nos.3765 and 3766/2012. Subsequently, both the writ petitions were dismissed by an order dated 09.12.2014. When such being the position, the goods in question were not put to auction and the obser .....

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n if the permitted period for bonding has expired and demand notice has been issued or it has been decided to put the goods under auction. Before permitting re-export in each such case, however, it will be necessary to extend the period of warehousing under Section 61 of the Customs Act to enable the importer to export the goods within the permitted period of warehousing. 3. Chief Commissioners are, therefore, requested to consider/decide such requests from the importers keeping in view the afor .....

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