ORDER
K. Sankararaman, Member (T)
1. This is a Stay Petition filed by the applicants praying for dispensing with the pre-deposit of duty in a sum of Rs. 51,142.70 demanded by the department as short-levied amount and granting of stay of operation of the order of the Collector (Appeals) dated 10-11-1988 confirming order of the Assistant Collector of Customs, Appraising Gr. IV dated 11-4-1988.
2. Shri S.K. Bagaria, learned Advocate appearing for the applicants gave the particulars of certain dates in the present case. Originally the appellants filed an into-Bond Bill of Entry on 5-11-1986. This was, however, substituted by an ex-bond Bill of Entry as they needed the goods urgently. The entry inwards for the vessel was granted on 14-11-1986. The goods were examined on 24-11-1986 by the Customs authorities. An order of assessment was passed by the Assistant Collector on 25-11-1986 and the goods were cleared by the appellants on 27-11-1986.
3. On 26-11-1986 the rate of duty on the goods in question had increased and the revised rate of duty meant an additional sum of Rs. 51,142.70 paise.
4. The Custom House has applied the provisions of Section 15(1)(b) for determining the rate of duty. Shri Bagaria referred to Sections 15(1)(a), (1)(b) and (1)(c) and also to the definition provisions under Section 2(43) for warehouse and Section 2(44) for ‘Warehoused goods’. Shri Bagaria stressed the point that warehoused goods means goods deposited in a warehouse. It is his contention that the said goods were never deposited in warehouse. The goods never left the docks and were cleared therefrom. The procedural formalities in regard to into-bond bill of entry and ex-bond bill of entry and the officers concerned for examination and allowing clearance does not affect the legal provisions which govern the rate of duty in terms of the sub-sections of Section 15. In view of the provisions of law referred to by him he argued that they have a strong prima facie case and he requested that the demand for duty may be stayed and the appeal heard on merits.
5. Replying to the arguments of the learned Counsel Shri P.C. Jain, the learned JDR referred to the endorsements on the into-bond bill of entry. He stated that the goods have been entered for warehousing and their clearance for home consumption can take place only after they are cleared for warehousing. He referred to the notings on the reverse of the into-bond bill of entry. The pass-out order is dated 27-11-1986. This would constitute the relevant date in terms of Section 15(1)(b) which is clearly applicable to the present case. In the circumstances, he contended that the department’s decision is correct and based on law and the department has a prima facie case. He accordingly opposed the request for stay.
6. The learned JDR also stated that the appellants have not indicated anything by way of their financial position to warrant consideration of the stay on grounds of undue hardship.
7. On this point, Shri Bagaria stated that in view of the prima facie strength of their case, they have not stressed the point. He, however, stated that the importers had already cleared the goods on the basis of the rate of duty indicated in the bill of entry and if the department were to recover the higher rate of duty, at this stage, they would not be in a position to recover the sum from their customers and thus they will be put to hardship.
8. We have given careful consideration to the arguments canvassed by both sides. It is an admitted position on both sides that as far as the procedure is concerned they have originally followed the into-bond bill of entry. At a later stage when the appellants wanted the goods to be cleared quickly they applied to the Custom House for permission to file into-bond bill of entry for Home Consumption. Though there is provision for amendment of the into-bond bill of entry by a bill of entry for Home Consumption they were advised that it may take time and accordingly they filed an ex-bond bill of entry. They made a request for waiver of physical warehousing subject to payment of all charges and on the explicit understanding that no remission of customs duty would be allowed under any circumstances. The Collector (Appeals) while upholding the order of the Assistant Collector had observed that as per the endorsements on the bill of entry, the goods were to be escorted as they were meant for being deposited in the warehouse. The Collector (Appeals) has finally observed that though the physical warehouse (sic) might have been waived by the Customs department on a special request of the importer, the facts remained that the goods moved first on a yellow B/E, then on a green B/E -both of which relate to warehouse. The goods were not cleared on a white B/E. The Collector (Appeals) has, therefore, concluded that since the goods were physically removed from warehouse on 27-11-1987 (sic) and the enhanced rate of duty came into effect on 26-11-1986 and the importers were required to pay higher rate of duty totalling Rs. 51,142.70 paise, as demanded by the Custom House. He had, therefore, held that the order passed by the Assistant Collector is correct in law and rejected the appeal.
9. We are inclined to accept the arguments advanced by the learned Counsel for the appellants that notwithstanding the colour and type of bill of entry or the officers who had handled the processing of the bill of entry and made endorsements thereon relating to warehousing and the passing out of Customs control, the moot point would be whether the goods were cleared from warehouse and whether the goods in question had attained the character of warehoused goods. On both these points the learned Counsel for the appellants has usefully referred to the definitions under Sections 2(42), 2(43) and 2(44). Warehouse would mean a Public Warehouse appointed under Section 57 or a Private Warehouse licensed under Section 58. It was the contention of the learned Counsel that the goods never left docks and were never deposited in a warehoue. The docks area has not been appointed as a Public Warehouse or licensed as a Private Warehouse. Warehoused goods under Section 2(44) would mean goods deposited in a warehouse. Since the subject goods were never deposited in a warehouse as required by these provisions they had not become warehoused goods and accordingly provisions of Section 68 and thereby 15(1)(b) would not come into play. We are satisfied that the appellants on the above reasoning for a strong prima facie case. We accordingly allow the Stay Petition.
10. As the appeal relates to the rate of duty to be applied for assessment of duty, which is dealt with by the Special Benches of the Tribunal, we direct the Registry to transfer this appeal to the Special Bench concerned at CEGAT, New Delhi.
11. The operative part of this order was pronounced in the Court on 18-9-1989.