2007 (7) TMI 536 - AT - Customs

Summary

Issues:
1. Rejection of applications for extension of bonds by the Customs department.
2. Rejection of applications for relinquishing title under the Customs Act.
3. Applicability of previous judgments and circulars in the case.
4. Duty liability for abandoned goods after the expiry of the bond period.

Analysis:

Issue 1:
The appellants, a pharmaceutical manufacturing company, appealed against the rejection of their applications for extension of bonds by the Commissioner of Customs (Appeals). The company faced challenges when foreign buyers delayed orders, causing goods to remain in the warehouse beyond one year. The Drug Controller granted permission for destruction of expired goods covered by the bonds, leading the appellants to relinquish their title to the goods.

Issue 2:
The Assistant Commissioner of Customs rejected the appellants' applications for relinquishing title under the Customs Act, demanding duty and interest. The Commissioner (Appeals) upheld this decision, citing a previous Supreme Court judgment. The appellants argued that the case was covered by the first proviso to Section 68 of the Customs Act, emphasizing their relinquishment of title before clearance for home consumption.

Issue 3:
The appellants' advocate argued that the previous Supreme Court judgment was not applicable, citing Board Circulars and other case laws. The Division Bench of the Tribunal in a similar case ruled that the importer could relinquish title even after the warehousing period expired, referencing Section 23(2) of the Customs Act. The authorities failed to consider relevant circulars and sections of the Customs Act in their decision-making process.

Issue 4:
The main issue revolved around the duty liability for abandoned goods after the bond period expiry. The Tribunal found discrepancies in the authorities' orders, noting that no clearance order for home consumption was issued. The Divisional Bench's decision supported the appellants' right to relinquish title even after the bond period expired, as per Section 68 of the Customs Act. Consequently, the impugned orders were set aside, and the appeal was allowed in favor of the appellants.