2014 (2) TMI 537 - HC - Customs

Permit of transit of liquor - Removal of goods from one warehouse to another - power of state excise authorities - Whether it was necessary for the petitioner to have obtained a permit under the Kerala Liquor Transit Rules, 1975 before transporting the goods. Since the Foreign Made Foreign Liquor was transported without a transport permit, an offence under Section 55(a) of the Abkari Act was made out. - Held that - The transport of goods from one bonded warehouse to another bonded warehouse is done under the proper control of Customs officials. In the present case, the transport of liquor was effected under proper documents as evident from paragraph 2 of the statement filed by the sixth respondent. The list of documents stated to have been seized from the driver of the vehicle includes all the necessary official documents issued by the Customs authorities in compliance with Sec. 67 of the Customs Act as well as the Goods Imported (Conditions of Transshipment) Regulations, 1995. The State Excise authorities therefore had no authority whatsoever to seize the said consignment and to register a case as done in the present case by Exts. P12 and P14. - Decided in favor of appellant / assessee and against the revenue.

Summary

Issues:
Transport of Imported Cargo under Bonded Trucking Facility; Seizure of consignment of liquor bottles; Necessity of transit permit under Kerala Liquor Transit Rules, 1975; Jurisdiction of State Excise Department over Bonded Cargo; Interpretation of Customs Act, 1962 and Liquor Transit Rules.

Analysis:

Issue 1: Transport of Imported Cargo under Bonded Trucking Facility
The petitioner, a Private Limited Company, obtained a license for transporting Imported Cargo under the terms of an agreement with the President of India. The movement of goods under the 'Bonded Trucking Facility' is governed by the Customs Act, 1962, and the Goods Imported (Conditions of Transshipment) Regulations, 1995. The petitioner had necessary permits and documents for transporting a consignment of liquor bottles, valued at Rs. 10,94,000, from one Airport to another. However, the consignment was seized by State Excise Officials, leading to legal proceedings.

Issue 2: Seizure of consignment of liquor bottles
The consignment of liquor bottles, transported by the petitioner, was seized by State Excise Officials at a check post, and the driver was taken into custody. The officials broke the Customs seals and registered a crime under the Abkari Act. Despite producing all documents, the goods were detained, and the driver was granted bail only after 21 days. The petitioner sought interim custody of the goods, which was denied, leading to the filing of writ petitions.

Issue 3: Necessity of transit permit under Kerala Liquor Transit Rules, 1975
State Excise Officials contended that a permit under the Kerala Liquor Transit Rules, 1975 was required for the transshipment of liquor, even between Customs areas of International Airports. The absence of such a permit led to the seizure of the consignment. However, the petitioner argued that the movement of Bonded Cargo under Customs regulations did not fall under the purview of State Liquor Transit Rules.

Issue 4: Jurisdiction of State Excise Department over Bonded Cargo
The State Excise Department claimed jurisdiction over the seized consignment, citing the necessity of permits under State Liquor Transit Rules. However, the petitioner argued that the movement of goods between bonded warehouses was under the control of Customs officials, and State Excise had no authority to interfere with such transport.

Issue 5: Interpretation of Customs Act, 1962 and Liquor Transit Rules
The judgment analyzed the provisions of the Customs Act, 1962, particularly Section 67 allowing the removal of goods from one warehouse to another under bond. It also examined Rule 3 of the Liquor Transit Rules, 1975, to determine the applicability of transit permits to goods in bonded warehouses. The judgment referenced a previous case to establish that Excise Officials lacked jurisdiction over goods in Customs custody.

The judgment concluded in favor of the petitioner, quashing the actions of the State Excise Officials, directing the release of the seized vehicle, discharging the bank guarantee, and leaving the claim for compensation open. The decision was based on the interpretation of relevant laws and regulations governing the transport of Bonded Cargo and the limited jurisdiction of State Excise over such movements.