No Confiscation/Fine for Non-Bonded Goods storage in Bonded Warehouse with Customs Dept. Permission

Ganesh Benzoplast Limited Vs Commissioner of Customs (CESTAT Mumbai)

In the case of Ganesh Benzoplast Limited Vs. Commissioner of Customs (CESTAT Mumbai), the impugned order dated 08.01.2024 invoked Section 111(h) and 111(j) for confiscation of goods and imposition of redemption fine on the appellants. However, the provisions of Section 111(h) were found inapplicable as the appellants had obtained permission for their activities within the bonded area. Similarly, Section 111(j) did not apply as the goods were not prohibited for importation, and the appellants had obtained due permission from the customs department. Therefore, neither Section 112 nor Section 114AA nor Section 117 were applicable for penalties or fines. Consequently, the impugned order was set aside entirely, and the appeal was allowed in favor of the appellants.

FULL TEXT OF THE CESTAT MUMBAI ORDER

Briefly stated, the facts of the case are that the appellants herein were issued with a Public Bonded Warehousing License by the jurisdictional Customs authorities at Jawaharlal Nehru Custom House (JNCH), Nhava Sheva. In total, there were 79 public bonded storage tanks located in the premises of the said warehouse. The said license was issued to the appellants in terms of Section 57 of the Customs Act, 1962. The license has provided various conditions to be fulfilled/observed by the license holder, the appellants herein. On 01.02.2023, a team of officers from the Import Bond section, JNCH visited the warehouse of the appellants and upon verification of the warehouse and various records, they observed that non-bonded goods had been stored in the bonded tanks, whereas bonded tanks are meant for storage of only customs bonded goods; that the bonded goods covered under Bill of Entry (B/E) No. 6749977 dated 06.07.2023 had been stored in non-bonded tanks in the month of July’ 2023, which is a clear violation of Section 60 ibid read with Section 71 ibid; that due to absence of the technical staff at the warehouse, the software maintained by the appellants could not be verified to ascertain, whether it is having audit trail facility as prescribed in para 2(c) of Circular No.25/2016 dated 08.06.2016. On the basis of investigation, the officers found that the appellants had failed to comply with the provisions of the Customs Act, 1962; Public Warehouse Licensing Regulations, 2016 and Warehouse (Custody and Handling of goods) Regulations, 2016 as well as the licensing conditions. For carrying out detailed investigation and to stop any further violations of the licensing conditions, the license of public bonded warehouse issued to the appellants was suspended on 07.12.2023 by the department as per the provisions of Sub-section (2) of Section 58B ibid. On detailed investigation into the matter, the department had submitted the inquiry report, based on which the Principal Commissioner of Customs vide the Order-in-Original No. 201/2023-24/COMMR/NS-I/Bond/JNCH dated 08.01.2024 (for short, referred herein as ‘the impugned order’), has adjudicated the matter and passed the following order:

“ORDER

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