ORDER
Jeet Ram Kait, Member (T)
1. This appeal is directed against the Order-in-Appeal No. C. Cus. 1508/97, dt. 18-12-97, by which the ld. Commissioner (Appeals), has rejected their appeal on the ground that there is wilful negligence on their part inasmuch as, while getting the goods bonded in a public bonded warehouse in normal conditions they, could have opted for a warehouse where the control temperature ambiance was available and could have saved the goods from deterioration. It was in this background, the ld. Commissioner (Appeals) had not extended the benefit keeping in view the provisions as contained in Section 22(1)(c) of the Customs Act.
2. Ld. Consultant, Shri. M.S. Kumaraswamy submits that they had cleared 20 drums of Styrene Monomer from the warehouse and found that the goods have deteriorated within a period of hardly a month from the date of warehousing of the goods, which was on 1-6-95. The first consignment was cleared on 11-7-95. On 7-3-96, the appellants informed the department that the goods have deteriorated and they would like to abandon the remaining 60 drums of Styrene Monomer, as it was not possible to use. They wrote another letter on 1-8-96 that they would like to surrender the goods to the department. This was also not permitted by the department. He further submitted that they are entitled to get the benefit under Section 22(2) of the Customs Act, 1962 and according to this Section, the value and duty has to be re-determined keeping in view the damage and value of the deteriorated goods because of damage or deterioration. He also invited our attention to the Board’s Circular No. 52/98-Cus., dt. 27-7-98. By this circular, the Dept. of Revenue has accepted the fact that the deterioration can happen when the goods are stored in the Govt. warehouses and the department has given instructions to the authorities that where goods continue to lie in the warehouse after the expiry of warehousing period should be specially taken up for scrutiny by the audit parties and other checks in order to guard against deterioration, substitution or any other unlawful removal.
3. Heard Ld. DR, Shri. P. Devaludu, who submits that it was in the knowledge of the importer that the imported goods required storage in a controlled temperature atmosphere. There was no provision to store the goods in any of the warehouses and they should have cleared the goods by making the payment of the duty on the value, which was shown at the time of importation. Not only they knew at the warehousing of the goods that the imported goods require particular temperature even after they came to know about the damaged goods after the removal of 20 drums of first consignment on 11-7-95. They kept mum for more than 8 months and it was only on 7-3-96, they wrote to the department and blamed the department for deterioration of the imported goods that the goods have not been stored at a particular temperature by the Customs authorities. Their letter dt. 1-8-96, asking the customs authorities to shift the goods from the bonded warehouse to the customs godown for which they were ready to bear the transportation charges is also of no consequence as the customs department had asked for the duty on the goods, where the bonding period was expired and goods deteriorated because of wilful negligence on the part of the appellant/assessee. It clearly shows that the appellants were aware that the condition under which the goods were required to be stored. Therefore, the ld. Commissioner held that they had not informed the department that such a damage was possible and they were aware of the fact that quality of Styrene Monomer would get damaged during storage in normal condition. The findings of the ld. Commissioner that getting the goods bonded in a public bonded warehouse in normal conditions shows wilful negligence of the appellant/assessee. He has rightly held that no benefit can be extended to them in view of the provisions of Section 22(1)(c) of the Customs Act.
4. We have considered the rival submissions and from the order of the ld. Commissioner, we find that at the time of bonding, the appellants were aware that the imported goods required storage in a controlled temperature atmosphere. It was, therefore, incumbent, upon them to take precaution of selecting a bonded warehouse where the control, temperature ambiance was available. Under the law, they even had the opportunity to get their own storage area bonded for this purpose if it had facility of a cold storage. We are also in agreement with the finding of the ld. Commissioner that at the time of bonding, they did not take these precautions. Nor did they inform the Department that such a damage was possible. Further, they were aware of quality of Styrene Monomer getting damaged during storage in normal conditions, getting the goods bonded in a public bonded warehouse in normal conditions shows wilful negligence on the part of the appellant/assessee. In view of the above position, no benefit can, therefore, be extended to them in view of the provisions of Section 22(2) of the Customs Act. As regards the plea that under Section 22(1)(c), the value should be re-determined keeping in view the damage on the goods, we do not agree with the argument made by the ld. Counsel inasmuch as, Section 22(2) would be applicable after they cross the threshold under Section 22(1)(c) of the Customs Act, ibid. We, therefore, do not find any infirmity in the order of the Commissioner (Appeals) and the same is affirmed. The appeal is, therefore, rejected. Ordered accordingly.