Commissioner Of Customs Vs Baroda Rayons Corporation Ltd. (Gujarat High Court)
Gujarat High Court held that as the bonded period is expired, the importer is liable to pay the customs duty. Importer cannot re-export the goods under section 69 without payment of the customs duty.
Facts- The respondent is a public limited company engaged in a commercial production of Viscose Filament yarn. In the year 1995-96, the respondent imported plant and machinery – equipment under an Open General Licence (OGL) from Japan, Germany and Korea, after executing 21 bonds amounting to Rs.18,01,31,442/- and initially, it was stored at Bombay and later on shifted to the private bonded warehouse at Surat.
On the expiry of the warehousing period, the respondent sought an extension for six months on the ground of it was unable to clear the imported plants and machinery – equipment due to a financial crunch. When the 6th extension was sought from 01.01.1998 up to six months i.e. 30.06.1998, same was rejected and so also 6th, 7th, 8th, 9th and 10th extensions sought for.
On account of the equipment in the bonded warehouse not having been cleared after the expiry of the permitted extension warehousing period, the appellant was issued show cause notices, initially, 16 show cause notices resulting in 16 Orders in Original (For short ‘OIO’) came to be passed on 30.03.2001 which became the subject-matter of appeals which came to be adjudicated by the appellate authority and a common order dated 15.01.2001 came to be passed and rejected the same.
The request of the appellant to transfer the equipment namely bonded plant and machinery lying in the private bonded warehouse to inside factory premises at Surat was also rejected on the ground of a show cause notice issued having already been adjudicated.
After a period of 16 years, the respondent sought for extension of the warehousing period which came to be rejected on the ground that shows cause notice and the demand issued earlier had stood confirmed up to the level of the Tribunal.
Being aggrieved, an appeal came to be filed under Section 129 of the Customs Act, 1962 (‘the Act’) which has been allowed by the Tribunal by relying upon the circular dated 14.01.2003 by arriving at a conclusion that when the importer makes a request for re-export of the goods u/s. 69 of the Act, same should be allowed even if the bonding period has expired and demand notice has been issued or even the goods are put under auction. The Tribunal has also held that as goods are lying in the warehouse without being home consumption and therefore no customs duty shall be payable.
Conclusion- Held that the owner of the goods would be liable to pay full amount of duty with interest and penalty, as if the goods are to be cleared from home consumption. In the instant case, the owner of the goods has not complied with this statutory mandate.
Clause (b) of sub-section (1) of Section 72 clearly mandates where warehoused goods have not been removed from the warehouse at the expiry of the period, then proper officer would be empowered to demand and the owner of the goods would be liable to pay full amount of the duty chargeable on account of such goods together with interest, fine and penalty. In the instant case, the action relating to the impugned goods had been initiated and had reached finality. Thus, when liable to pay duty, penalty and interest had already arisen on the owner as per section 72(1)(b), we are of the considered view that section 69 would not be applicable.
Held that section 69 would be attracted prior to applicability of section 72 and not thereafter. In that view of the matter also, we are of the considered view that the Tribunal was not justified in holding that even though the duty was conferred by adjudication process, section 69 would be applicable and as such finding recorded by the Tribunal requires to be set aside.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
