TMI Blog2019 (2) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... goods deposited in the warehouse against pilferage, theft, fire accident and other natural calamities - Thus by not executing the bond as required as condition for warehousing license, appellants have violated the conditions of license issued under Section 58. Insurance policy - though the fire incident happened in the premises of Appellant on 08.05.2006, the Insurance Policy has been issued to them on 09.05.2006 effective from 01.05.2006 - Held that:- Even this insurance policy is in the name of Appellants and not in the name of Commissioner Customs as per the condition of license. If such an insurance policy as required in terms of conditions of license was executed by the Appellant, then there would have been no requirement of any remission. Section 23 of the Customs Act, 1962 is a general provision seeking to provide a generalized remedy of remission in case of loss of goods. However section 58 and 65 are specific provisions in relation to the private bonded warehouse etc. By prescribing the condition of insurance coverage to the extent of Custom Duty deferred in respect of the warehoused goods, the Appellants have been insulated from the losses that may occur on this accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in force in India. 2.1 Appellant works under STPI scheme and holds a Private Customs Bonded Warehouse License issued under Section 58 of the Customs Act, 1962. They have also been permitted to warehouse duty free goods under Section 60 of Customs Act, 1962 and undertake manufacture and other operations in respect of warehouse goods under Section 65. 2.2 A fire broke out in the appellant premises, intimation in respect of which was given to the range verbally at 1100 Hrs on 08.05.2006 and by a letter dated 08.05.2006 filed on 09.05.2006. Fire occurred at around 0330 Hrs on 08.05.2006, on the sixth floor of their premises at Erandwane. 2.3 They filed a claim for remission of duty in respect of warehoused goods under Section 68 of Customs Act, 1962 on the goods destroyed in fire on 31.08.2006 along with copy of panchnama dtd 08.05.2006 drawn by Police, FIR Copy, Copy of Fire Certificate dated 24.05.2006 issued by Pune Fire Brigade, Photograph of damaged goods, copy of insurance survey report dated 08.08.2006 issued by HDFC Chubb General Insurance Company along with list of damaged goods, Copy of Insurance Policy no FND000078000/00 dated 09.05.006 issued by HDFC General Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f lower authorities stating that- i. They are entitled to remission under Section 23 for the reason that the goods were damaged and had become unusable as a result of fire incident in their premises on 08.05.2006. The fact of fire and destruction has been certified by various agencies including, police, fire department, insurance surveyors and also the range superintendent. ii. The rely on following decisions in their claim for remission - a. Voltas Ltd [2003 (156) ELT 295 9T-Mum)] b. Mounts Shivalie Breweries Ltd [2003 (157) ELT 9 (Del) c. Winsome Yarn Ltd. [2001 (134) ELT 686 (TDel)] d. Ganeshwar Ltd [2002 (141) ELT 654 (T-Del)] e. Suryovonics Ltd [2003 (156) ELT 391 9TBang)] iii. By allowing the order of abatement under section 22(2) Deputy Commissioner has gone beyond the scope of Show Cause Notice which was issued for denying the remission under Section 22(2) 4.1 We have heard Shri T Viswanathan, Advocate for the Appellant and Ms. Vinita Sekhar, Additional Commissioner (Authorized Representative) for the Revenue. 4.2 Arguing for the appellants learned counsel submitted that the facts of the case clearly bring out that they were operating under sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout prejudice to the provisions of Section 13, where it is shown to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs that any imported goods have been lost (otherwise than as a result of pilferage) or destroyed, at any time before clearance for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall remit the duty on such goods. (2) The owner of any imported goods may, it any time before an order for clearance of goods for home consumption under Section 47 or an order for permitting the deposit of goods in a warehouse under Section 60 has been made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon. Provided that the owner of any such imported 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. 5.3 In the present case appellant is STPI unit and has been granted license under Section 58 65 of the Customs Act, 1962 for warehousing and for undertaking manufacture and other operations in respect of the wareh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained in so much of the waste or refuse as has arisen from the operations carried on in relation to the goods cleared for home consumption. 5.4 Both sections 58 and 65 stipulate that person depositing the goods in terms of the above section in private bonded warehouse or undertaking operations as specified by the said section, is bound by the conditions specified in the said licenses and also by the Bond executed under Section 59. One of the conditions prescribed by the license is that the appellants shall insure the goods deposited in the warehouse against pilferage, theft, fire accident and other natural calamities. Even CBEC Circular No 99/95-Cus states- (v) It may be ensured that the goods deposited in the warehouses are fully insured by the ware housekeeper against theft, pilferage, fire accidents, other natural calamities, risks against rioting, etc. at least for a value equal to the customs duty by a comprehensive insurance policy and drawn in favour of the Commissioner of Customs. Thus by not executing the bond as required as condition for warehousing license, appellants have violated the conditions of license issued under Section 58. 5.5 Now coming to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot seek benefit under Section 23 of the Customs Act. Therefore, demand of Customs duty on the imported raw materials which were destroyed in the fire as such or which were contained in the finished products destroyed is clearly sustainable in law and we hold accordingly. Similar view has been taken by the tribunal in case of Sandoz Pvt Ltd [2014 (308) ELT 617 (T-Mum)] 5.7 Further clear analysis of Section 23 will make it evident that the said section is applicable, only in case where order Section 47 for clearance of goods for home consumption or an order for deposit of the said goods in warehouse has not been made. Further remission is also not to be allowed in respect of the goods for which an offence under the customs Act, 1962 is committed. By not fulfilling the conditions of license issued under the Section 58 of the Customs Act, 1962 appellants have contravened the provisions to that extent and hence section 23 should not be applicable. 5.8 Appellants inn their appeal have relied upon certain decisions which are clearly distinguishable as they relate to destruction of goods prior to clearance from the port a\or prior to them being put to use. 5.9 Further appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants. After fire took place again the goods were not completely destroyed but damaged in the fire that took place in the fire incident. When the appellants have made use of the goods the goods would have definitely been used for fulfilling the export obligation that is dependent on the value of imported goods and duty saved. Assistant Commissioner has in the present case taken into account the damage caused by the fire to the imported bonded goods. Hence he has not even proposed to demand the entire duty on the value of goods as imported but has allowed appellants the option to claim abetment under section 22(2) of the Customs Act, 1962. He has also allowed the appellants to debond the said damaged goods by paying duty on the abetted/ depreciated value of the goods under Section22(2). The provisions of Section 22 of the Customs Act, 1962 are reproduced below: SECTION 22. Abatement of duty on damaged or deteriorated goods. (1) Where it is shown to the satisfaction of the 34 Assistant Commissioner of Customs or Deputy Commissioner of Customs (a) that any imported goods had been damaged or had deteriorated at any time before or during the unloading of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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