ORDER
JH Jogelkar, Member (T)
1. The appellants are a Public Sector Undertaking and have produced the requisite clearance from the Committee of Secretaries.
2. On hearing both sides on the stay application, the appeal itself was taken up for disposal.
3. M/s. Air India Ltd, the appellants, have a private bonded warehouse. On periodical stock taking, it appeared that they had excess of articles in bond totally valued at Rs. 17,21,150/-. Show cause notice was issued alleging contravention of the provisions of Sections 45,46,59 & 60. It was claimed that this contravention would render the goods to confiscation under Sec.111(o) of the Customs Act, 1962. The show cause notice also proposed imposition of penalty. Before the Commissioner, it was pleaded that these goods were sent out and had been received back during 1998. Because of the failure of the computer system, the accounting was not properly done. The Commissioner did not find merit in this plea and ordered confiscation of the goods but allowed redemption on payment of fine of Rs. Tow lakhs and also imposed penalty of Rs. 3 lakhs. Hence the appeal.
4. The same grounds as are in the appeal memorandum were made before the Commissioner. It was claimed that such a strict view was not warranted because the appellants are a Govt.of India Undertaking. It was claimed that until the Customs checking the stock, the appellants themselves did not know that they had excess stock.
5. We have carefully considered the submissions.
6. The responsibility of maintaining proper accountal of the goods is on the person who is licensed to maintain a warehouse. Where any goods are not duly accounted for, the Customs have the power to demand duty in terms of Section 72(1)(d). The situation here is not of shortage but of excess stock. When the goods were removed from the bond for supply to outstation, no doubt, the appellant had filed proper documentation. When the goods were received back also they were required to file an application in terms of Sec.46 of the Act. If the appellants have not filed such Bs/E, then the goods would become liable to confiscation under Sec.111(d) of the Act. Where the documents have been filed but the entries in the ware housing registers are not made, then perhaps penalty under a General provision such as S117 may be attracted. But judging from the wording under Sec.111(o), we find that it was wrongly invoked in the present case.
7. It was appropriate for the ld.Commissioner to have permitted the appellants to reconcile their accounts placing on record the relevant documents showing re-importation of the goods. Then only the clear picture would emerge and if on this exercise the appellants are not able to explain the excess then the presumption would arise that these goods were clandestinely imported and would become liable to confiscation.
8. We do not find that the present proceedings were properly conducted. The appeal succeeds and is allowed without prejudice to the right of the Customs to take appropriate action in terms of the law against the appellants.
(Dictated in Court)