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2009 (1) TMI 692 - AT - CustomsRemission of duty - Damaged goods - relinquishment of title to the goods - Appeal to Appellate Tribunal - Words and Phrases - interpretation of statute - Held that - the fact that the accident happened in this case, has to be appreciated - It is a fact that the goods have become totally useless. Therefore, the goods have been destroyed before their clearance for home consumption. Hence, a careful reading of Section 23, shows that the section would be applicable even for the goods, which have become unusable on account of any accident. Section 23 is clearly applicable to the impugned goods - in terms of Section 68, when there is relinquishment of title to the goods imported before their clearance, no duty can be demanded. Appeal allowed.
Issues:
1. Remission of duty under Section 23 of the Customs Act for imported goods damaged due to rain. 2. Applicability of Section 23 versus Section 22 in the case of damaged goods. 3. Jurisdiction of the authority to confirm duty demand. 4. Relinquishment of title to goods under Section 68 of the Customs Act. Issue 1: Remission of Duty under Section 23: The case involved an appeal against the demand for duty on imported networking equipment damaged due to heavy rain. The appellants, an STPI Unit under the EOU Scheme, imported goods free of duty under a specific Notification. The goods were substantially damaged due to water seepage from heavy rain, rendering them unfit for use. The appellants sought remission of duty under Section 23 of the Customs Act, which allows remission for lost or destroyed goods. The lower authorities did not accept the claim, leading to the appeal. Issue 2: Applicability of Section 23 versus Section 22: The advocate for the appellants argued that the damaged goods should be considered as destroyed under Section 23, entitling them to remission of duty. The contention was that the goods had become unusable due to unavoidable circumstances, fulfilling the conditions of Section 23. The Commissioner (Appeals) had differentiated between goods lost, destroyed, or abandoned under Section 23 and damaged goods under Section 22. However, the Tribunal disagreed, stating that the damaged goods should be treated as destroyed before clearance for home consumption, making Section 23 applicable. Issue 3: Jurisdiction of the Authority for Duty Demand: The duty demand confirmed by the lower authority was challenged on the grounds of jurisdiction. The advocate argued that the lower authority did not have the jurisdiction to confirm a duty demand of the magnitude imposed in this case. Citing a CBEC Circular, it was contended that cases involving duty amounts exceeding a certain threshold should be adjudicated by higher-ranking officials. The Tribunal noted this argument in the appeal. Issue 4: Relinquishment of Title to Goods under Section 68: Another aspect of the case involved the appellants' attempt to relinquish their title to the damaged goods under Section 68 of the Customs Act. The Assistant Commissioner rejected this request, leading to a subsequent appeal before the Commissioner (Appeals). The Tribunal ultimately held that the appellants were entitled to remission under Section 23, making the appeal regarding the relinquishment of title infructuous. In conclusion, the Tribunal allowed the appeal, granting relief to the appellants based on the applicability of Section 23 for remission of duty on the damaged imported goods. The case highlighted the distinction between lost, destroyed, and damaged goods under the Customs Act, emphasizing the importance of fulfilling statutory conditions for duty remission.
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