TMI Blog2006 (4) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... ded warehouse vide bond No. CW-20-4732 dated 26th December, 1995, CW-20-4733 dated 26th December, 1995 and CW-20-4842 dated 2nd January, 1996, we restrict the facts to the said imported goods only. The two bonds CW-20-4732 and CW-20-4733 had an expiry date of 25th December, 1996 and the bond CW-20-4842 was to expire on 1st January, 1997. The company made an application on 19th December, 1996 for extension of bond which came to be rejected and the communication was sent to the company on 13th January, 1997. The request for extension of bond period came to be rejected in terms of the 2(i)(iii) of the public notice No.102/96 dated 5th June, 1996. The company upon receipt of the communication dated 13th January, 1997 made representation to the Chief Commissioner of Customs (respondent No. 2) against their request for extension of bond period and it is the case of the company that no communication in respect of the said representation has been received by the company. 4. The company has set up the case that in the Export-Import Policy, 1997-2002, the Central Government extended the Export Promotion Capital Goods Scheme (EPCG Scheme) to Agro-based industries and as per the notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported goods lying in the bonded warehouse (deemed to have been improperly removed under Section 72 on the date of expiry of the bond period) and interest payable thereon. The calculation of duty and interest payable by the company seems to have been made on 5th February, 1998. 6. The company and its shareholder filed the present writ petition before this Court on 3rd April, 1998. The writ petition demonstrates clever drafting. In para 21, it is averred, at the time of assessment, respondent No. 3 however, on the reverse of the original Bill of Entry endorsed payment of interest by the petitioner No.1 at the rate of 20% per annum from the date of expiry of bond up to the date of noting the ex-bond Bill of Entry. The petitioners crave leave to refer to and rely upon the endorsement made on the reverse of the original ex-bond Bill of Entry when produced as the same are in possession of the respondents'. Based on the aforesaid pleading and relying upon the judgment of the Supreme Court in the case of Pratibha Processors v. Union of India [1996 (88) E.L.T. 12 (S.C.)], the petitioners approached this Court and prayed that the demand of interest in respect of three consignments was b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in the case of Kesoram Rayon v. Collector of Customs, Calcutta [1996 (86) E.L.T. 464 (S.C.)]. 11. Clauses (43) and (44) of Section 2 of the Customs Act define 'warehouse' and 'warehoused goods'. 'Warehouse' means a public warehouse appointed under Section 57 or a private warehouse licensed under Section 58. 'Warehoused goods' means the goods deposited in a warehouse. 12. Section 12 is a charging section and provides for levy of customs duty on the dutiable goods. 13. Section 15 provides for date of determination of rate of duty and tariff valuation of imported goods. Under clause (b) of Section 15(1) in the case of goods cleared from a warehouse under Section 68, the rate of duty and tariff valuation is as on the date on which the bill of entry for home consumption in respect of such goods is presented under that section. 14. Sections 57 and 58 deal with appointing of public warehouses and licensing of private warehouses respectively. Section 59 provides for execution of the bond by the importer of goods which have been entered for warehousing. Section 61 provides for the period for which goods may remain in warehouse. 15. Insofar as the goods in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warehoused goods is payable for the period subsequent to the permissible period up to their clearance. The goods are improperly removed from the warehouse under the terms of sub-section (1) of Section 72 if they are removed without clearance under Section 71 [clause (a)]; if they are taken as samples but without payment of duty [clause (c)]; if a warehousing bond has been executed in respect of the goods under Section 59 but they are not satisfactorily accounted for [clause (d)]; and if they have not been removed from the warehouse on the expiration of the permitted period or its permitted extension [clause (b)]. In all such cases the Customs Officer is empowered to demand, and the importer shall pay, the full amount of duty chargeable on the goods and interest, penalties, rent and other charges thereon. The Supreme Court emphasized 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 beyond the permitted period or its permitted extension. The importer of the goods may be called upon to pay customs duty on them and, nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot payable. In challenging the demand of interest, the petitioners has misrepresented that the duty was not payable by virtue of notification dated 1st April, 1997 and the licence issued to the company under EPCG scheme and endorsement made thereon of zero duty. 21. Having noticed the facts above, we have no hesitation in holding that the provisions of Section 68 and consequently of Section 15(1)(b) have no application since the goods were not cleared from the warehouse within the bond period. Admittedly, no extension was granted. By reason of goods having remained in the warehouse beyond 25th December, 1996 insofar as two consignments were concerned and beyond 1st January, 1997 with regard to the third consignment, the goods shall be deemed to have been improperly removed from the warehouse under Section 72 and the Proper Officer was justified in calling upon the company to pay the customs duty on them as may be payable at the rate applicable at the rate on the date on which the bond period expired. As a matter of fact, there is no challenge to the demand made under Section 72 on 26th September, 1997 calling upon the company to pay full amount of duty chargeable on account of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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