ORDER
Shri S.S. Sekhon, Member (T)
1. This appeal has been filed by an importer who had warehoused the two imported consignments under Customs “Bond” on 21.4.99., & 26.4.99. Duty of customs were demanded by notice dt. 23.11.2000 & 23.11.2000, as the goods were not cleared from the Warehouse in terms of section 68 or 69 of the Customs Act 1962, nor any extension of warehousing period in terms of proviso to section 61(1)(b) Customs Act 1962 was obtained. Therefore, the duties were confirmed as demanded, along with interest as applicable. A penalty of Rs. 16000/- under section 117 of the Customs Act 1962 was also imposed by the lower authorities by treating the case to be a case of ‘deemed improper removal’, as held by the Supreme court in the case of Kesoram Rayon (1996 (66)ECR201(SC)) The request to clear the goods from the warehouse at the applicable rate of duty, on the day of removal, made before the authorities was not accepted. It was found that the said request was made almost more than seven months from the lapse of warehousing period or such extended period.
2. When the matter came up for stay application hearing, it was submitted by the learned advocate that ‘Application made to the Commissioner and Chief Commissioner of Customs, Bangalore, for extension of Warehousing Period’ were still pending with those authorities, for a decision. The matter was adjourned, after adjournments, it was submitted that the matter is still not decided by the Chief Commissioner while the application made to the Commissioner has been replied by his office that they should meet the Dy.Commissioner concerned who vide his letter nos C.No. VIII/40/2/2001 CWC dated NIL signed on 29/1/2001, has intimated that the said request could not be considered. The matter, with consent of both sides was thereafter heard, after waiver of pre-deposit. After hearing both sides and considering the submissions made we find:-
a) There is no doubt that Kesoram Rayon (1996(86)ELT464SC) decision would be applicable to cases falling under section 72(1)(b), which reads as:-
“…(b) where any warehoused goods here not been removed from a warehouse at the expiration of the period during which such goods are permitted under section 61 to remain in a warehouse:
(c) …..
(d) …..
the proper officer may deemed, and the owner of such goods shall forthwith pay, the full amount of duty chargeable on account of such goods together with all penalties, rents and other charges payable in respect of such goods…..”.
(underlining supplied)
Thus, the law is very clear, the ‘full amount of duty chargeable can be demanded. However, this enabling provision, can be exercised, only after the expiration of the period, during which such goods are permitted to remain in the Warehouse under section 61. Section 61, permits extension of time, for retaining the goods in the Warehouse, which can be granted by the Commissioner or the Chief Commissioner. Therefore, while the law permits the issue of a demand, casting liability on the owner to pay, such demands, cannot be enforced, till the extension period of time, duty” under section 72(1)(6) can be determined, only on the date of expiry of the extension period as granted. In the present case, extension applications have been made, and are pending. The Dy. Commissioner therefore should have proceeded to confirm the demands only after ascertaining from the appropriate authorities, i.e. Commissioner and/or the Chief Commissioner about extension if any, and with the Importers/owners, whether they intend to/or have filed, any applications for extension. We find that the learned Advocate has relied upon the decision of the Bombay High Court in case of Sunil Jugal Kishore Gupta (1988(36)ELT75(Bang)), wherein the court had held “Application for extension of Bond period made after expiry of the permitted warehousing period – Extension admissible”. No contrary decision has been produced before us. Therefore, following this decision, we can conclude “The Commissioner or and the Chief Commissioner were under an obligation to consider the applications for extension, despite being belatedly made and the confirmation of the demand by the Dy.Commissioner was ‘pre-mature’, since it has been made before the extension application was considered as provided under law. Such demands made are required to be set aside.
(b) We find that the apex court in Kesoram Rayon Case (1996(86)ELT464(SC) in para 13 thereof, have laid down :
“…. The importer of the goods may be called upon to pay Customs Duty on them and, necessarily, it would be payable at the rate applicable on the date of their demand removal from the warehouse, that is, the date on which the permitted period or its permitted extension came to amend”.
Therefore, when this crucial date in this case has not come, full duty chargeable can not be determined. While determining the rate and duties applicable, one has also to keep the decision of Kiran Spinning Mills of the Apex Court (1999)113)ELT753)SC) para 6) also, in view. Wherein the taxable event incase of the warehouse goods has been stipulated.
(c) When no duty demands are not being upheld, the penalties under section 117 of Customs Act also are not required, the same are required to be set aside.
3. In view of our findings the appeals are allowed, as remanded, for redetermination of the duties, interest, penalties as applicable, as per law, Appeal disposed of accordingly.
(Pronounced in open court on 12/6/2001)