2013 (1) TMI 476 - AT - Customs

Non execution of Bond for goods stored in a warehouse - duty demand - Held that - There is no dispute of the fact that the respondent herein have satisfied with the conditions of the licence. Inasmuch as the appellant has adhered to the terms and conditions of the licence in respect of the duty free shop and they had removed the goods from the private bonded warehouse to the duty free shop within the bonded period for the private bonded warehouse, there is no violation of law committed by the respondent.

Summary

Issues:
- Interpretation of bond requirements for goods stored in a duty free shop and warehouse
- Validity of maintaining inventory bond-wise for duty free shop goods
- Compliance with terms and conditions of the licence for duty free shop

Interpretation of bond requirements for goods stored in a duty free shop and warehouse:
The case involved a dispute regarding the bond requirements for goods stored in a duty free shop and a warehouse. The respondent, a tourism development corporation, stored duty free goods in a warehouse and subsequently transferred them to the duty free shop. The revenue contended that the bond executed for the goods in the warehouse should remain valid until the goods are sold from the duty free shop. However, the lower appellate authority ruled in favor of the respondent, stating that since the goods were cleared from the warehouse within the bonded period and the duty free shop was also a bonded warehouse, no fresh bond was required for selling the goods from the duty free shop.

Validity of maintaining inventory bond-wise for duty free shop goods:
The revenue argued that even if goods are removed from one warehouse to another, the respondent should renew the warehousing period for the goods covered under a specific bond until they are sold. On the other hand, the respondent's counsel contended that maintaining inventory bond-wise applies only to private bonded warehouses, not duty free shops. They argued that as per the terms of the duty free shop licence, separate bonds for stored and sold goods were not required. The appellate tribunal upheld the lower authority's decision, stating that the terms and conditions of the licence for the duty free shop were adhered to by the respondent, and there was no violation of the law.

Compliance with terms and conditions of the licence for duty free shop:
The tribunal considered the specific terms and conditions of the licence for the duty free shop, which required the licensee to maintain a stock register for different categories of goods. As the respondent had fulfilled these conditions and had removed the goods from the private bonded warehouse to the duty free shop within the stipulated period, the tribunal found no legal violation on the respondent's part. Consequently, the tribunal upheld the lower appellate authority's decision, dismissing the appeal filed by the revenue and disposing of the stay application.