2015 (10) TMI 2128 - HC - Customs

Warehousing of goods for more than one year - Imported capital goods for installation of Power Plant exempted from Customs Duty till 15th January, 2017 Extension of time limit preferred for goods retained in warehouse under Section 61 - Provisional mega power status certificate is given on 16th January, 2012 Held That - Warehoused goods in private warehouse with permission of Respondents under Section 58 is exempted from payment of customs duty; there is valid period of exemption upto 15th January, 2017 - Respondents directed not to seize the warehoused goods till the next date of hearing.

Summary

Issues:
1. Validity of exemption from customs duty on imported capital goods for a Mega Power Plant.
2. Extension of time limit for retaining goods in warehouse under Section 61 of the Customs Act, 1962.
3. Application for stay against coercive action by respondent authorities for seizure of warehoused goods.

Analysis:
1. The petitioner argued that they are establishing a Mega Power Plant and have imported exempted capital goods under a government notification. The exemption was initially for 36 months but extended to 60 months. The goods were kept in a private warehouse under Section 58 of the Customs Act since July 2011. The petitioner applied for extension beyond one year under Section 61(1)(b) read with proviso (i)(B) of the Act. The last application was dated 22nd October 2013. The petitioner sought stay against coercive action for seizure of goods at the warehouse.

2. The court considered the Central Government notification of March 17, 2012, the validity of exemption until January 15, 2017, and the provisions of the Customs Act, 1962 including Sections 58 and 61. The court found a prima facie case in favor of the petitioner. The balance of convenience favored the petitioner, noting that irreparable loss would occur without the stay. The goods in the private warehouse were exempted from customs duty until January 15, 2017. The court directed the respondents not to seize the warehoused goods until the next hearing.

3. The court granted the stay as prayed for in the Interlocutory Application, ensuring that the warehoused goods at Tori Warehouse in Jharkhand were protected from seizure. Both the Interlocutory Application and the writ petition were adjourned to March 10, 2015, for further proceedings.