2010 (9) TMI 413 - AT - Customs

Interest on warehoused goods Provisional assessment, effect on date of warehousing - definition of warehoused goods which is only that in respect of goods deposited in the warehouse, the date of deposit in the warehouse would be relevant for the purpose of determination of date of warehousing Interest on warehoused goods Delay in clearance - importer should have taken the precaution of filing the application for extension after three months or at least after the bill of entry was assessed - interest will be payable from the date on which the bill of entry for warehousing was assessed and returned to the appellant

Issues Involved:
1. Validity of demand issued under Section 72 of the Customs Act.
2. Calculation of warehousing period and commencement date.
3. Liability to pay interest from the date of return of the finally assessed warehousing bill of entry.
4. Eligibility to file a bill of entry for a part quantity under a valid licence.

Issue-wise Detailed Analysis:

1. Validity of Demand Issued Under Section 72 of the Customs Act:
The department issued a demand under Section 72 of the Customs Act, arguing that the warehousing period started from the date the goods were legally kept in the warehouse. The appellant contended that the warehousing period should commence from the date the warehousing bill of entry was reassessed as per the appellate authority's direction. The Commissioner (Appeals) held that the warehousing period expired on 11-1-05, and since the appellant neither cleared the goods nor got the warehousing period extended, the goods were covered under Section 72(1)(b) from 12-1-05 onwards. Thus, the assessing officer's notice under Section 72(1) demanding duty, interest, and other charges was considered valid for this period.

2. Calculation of Warehousing Period and Commencement Date:
The appellant argued that the warehousing period should start from 13-6-05, the date on which the bill of entry was assessed provisionally. The Commissioner (Appeals) held that the goods were warehoused on 12-10-04, and the warehousing period expired on 11-1-05. The Tribunal upheld this view, stating that the date of deposit in the warehouse is relevant for determining the warehousing date. The Tribunal found that the appellant's argument that the warehousing period starts from the date of assessment would imply that goods could not be warehoused without assessment, which is not the case.

3. Liability to Pay Interest from the Date of Return of the Finally Assessed Warehousing Bill of Entry:
The Commissioner (Appeals) concluded that interest could not be demanded from 12-1-05 since the delay in assessment was not due to the appellant's fault. The Tribunal upheld this conclusion, stating that the interest would start accruing from the date the bill of entry for warehousing was finally assessed and returned to the appellant. The Tribunal cited the case of Kanchanjanga Pvt. Ltd. v. CC, where the court held that interest could not be charged if the delay was due to the customs authorities' inaction.

4. Eligibility to File a Bill of Entry for a Part Quantity Under a Valid Licence:
The Commissioner (Appeals) relied on the decision in KLJ Plastics Ltd. v. CCE, Chennai, which held that the DEEC scheme cannot override the provisions of the Customs Act regarding the expiry of the bond period. The Tribunal agreed, stating that once the bonding period expired, the goods had to be treated as improperly removed from the bonded warehouse, and the rate of duty applicable would be on the date of such improper removal. Since the bonding period expired on 13-6-05, the appellant could not claim the benefit of the advance licence for part clearance of goods.

Conclusion:
The Tribunal rejected the appeals filed by both the department and the appellant, upholding the Commissioner (Appeals) decisions on all issues. The Tribunal affirmed that the warehousing period commenced on 12-10-04, interest was payable from the date of final assessment, and the appellant could not utilize the advance licence for part clearance after the bond period expired.

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