IN THE HIGH COURT OF KERALA AT ERNAKULAM
Co.Appeal.No. 1 of 2003()
1. THE OFFICIAL LIQUIDATOR,
... Petitioner
Vs
1. THE COMMISSIONER OF CUSTOMS CUSTOM HOUSE
... Respondent
For Petitioner :SRI.CHACKO GEORGE (SR.)
For Respondent :SMT.I. SHEELA DEVI, ADDL.CGSC
The Hon'ble MR. Justice J.B.KOSHY
The Hon'ble MR. Justice THOMAS P.JOSEPH
Dated :07/11/2008
O R D E R
J.B.KOSHY & THOMAS P. JOSEPH, JJ.
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Company Appeal Nos.1 and 2 of 2003
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Dated 7th November, 2008
JUDGMENT
Koshy,J.
A company named M/s.Toshiba Anand Batteries Ltd. was
ordered to be wound up by the Company Court by order dated 5.11.1996
in Company Petition No.1 of 1996 after reference made by the Board For
Industrial And Financial Reconstruction (BIF), under section 20 of the
Sick Industrial Companies (Special Provisions) Act, 1987. While the
company was functioning, it imported two consignments of zinc callots –
20 MT and 23 MT respectively, agrregating to 43 MT, from Peru. The
goods were discharged by steamer lines in Cochin Port and taken into
custody by the Cochin Port Trust. The goods were bonded in customs
approved private bonded warehouse. Therefore, customs duty need be
paid only at the time of clearance from the bonded warehouse. Before
the company cleared the materials from the warehouse, the company
closed its operations. The bonded periods expired and no steps were
taken to renew the bonds. Therefore Customs Department sold the two
consignments of bonded materials, on different dates, for an aggregate
sale value of Rs.18,75,000/= and it was retained by the customs
authorities. The Official Liquidator filed CA.No.490/97 for transfer of the
above amount of Rs.18,75,000/= to himself as part of the assets of the
Co.A.1 & 2/2003 2
company. The Assistant Collector of Customs preferred a claim of
Rs.1,08,03,735/= for customs duty and allied charges due from the
company on various consignments of goods imported by the company
including the 43 MT zinc callots above referred to. The Official
Liquidator admitted the Assistant Commissioner’s claim to the extent
of Rs.77,73,662/= and rejected the claim in respect of two items,
aggregating to Rs.30,30,073/= as 43 MT imported zinc callots were
sold by the customs authority and 50 MT zinc callots were in the
custody of the Sub Court, Cochin and it was not taken possession by
the Official Liquidator. The Company Court dismissed
CA.No.490/1997. Once the goods were sold in auction as abandoned
when the goods were not cleared from the bonded warehouse, owner
cannot claim any right of the proceeds of the sale and after
abandoning the items and not clearing within the bonded period, the
owner cannot claim for the goods or its value. Therefore, we agree
with the company court in dismissing C.A.No.490/97. But, the
Company Court allowed the claim of the customs department to the
tune of Rs.13,61,099/= more than the amount admitted by the Official
Liquidator which represents the duty on the above goods. We are of
the opinion that after appropriating the value of the goods, the
customs authorities cannot claim any customs duty. In this
connection, we refer to section 23(2) of the Customs Act and decision
of the Bombay High Court in Mafatlal Fine Spinning &
Manufacturing Co. Ltd. v. Union of India and others (1987 (27)
E.L.T 19 (Bom.)). Therefore, the Company Court ought not have
Co.A.1 & 2/2003 3
allowed the claim of duty in respect of the same. The Official
Liquidator has allowed the claim of customs authorities to the tune of
Rs.77,73,662/-. In any event, duty of the abandoned goods which was
not cleared from the bonded warehouse cannot be claimed as customs
authorities sold the goods as it was not cleared from the bonded
warehouse within the time allowed and treated it as abandoned goods
and appropriated its proceeds. Thereafter, it is not justified for
claiming customs duty on that goods (43 MT of zinc callots) than that
was allowed by the Official Liquidator. With regard to 50 MT zinc
callots in the custody of Cochin Sub Court, claim can be filed only
after disposal of the case pending in the Sub Court as ownership of
the goods in question is still in dispute. Company court went wrong
in allowing the claim of the customs authorities to the extent of
Rs.13,61,099/= regarding the duty on 43 MT of zinc callots sold by
them and 50 MT of zinc callots now under custody of the sub court.
In the above circumstances, we dismiss Co.A.No.1 of 2003
and allow Co.A.No.2 of 2003.
J.B.KOSHY
JUDGE
THOMAS P. JOSEPH
JUDGE
tks