2008 (8) TMI 323 - AT - Customs

Remission of Customs Duty - loss, destruction or abandonment of the goods - Section 23 of the Customs Act - The goods imported in the instant case was clove. What is said to have been lost is the organic extraneous matter i.e. waste which the imported goods carried and for which the appellant have to blame themselves. It is clear that if the goods had not carried the extraneous matter beyond the prescribed limit and therefore adulterated and hazardous to the health of the people at large in view of the provisions of FFA, they would have been delivered the quantity of goods which they had imported. As the loss does not relate to loss of goods , the provisions of Section 23 are not attracted and the appellant was not entitled to remission of duty. Remission is not granted refund application rejected.

Summary

Issues:
Refund claim rejection based on loss of weight during customs clearance.

Analysis:
The appellant imported cloves and declared 200 MT of cloves. Samples found adulterated, extraneous matter segregated, resulting in a net weight of 190.405 MT. Fresh samples re-tested and found to meet standards. Goods cleared with a net weight of 188.236 MT. Appellant claimed refund of Rs.11,04,843 for the alleged loss of 11.746 MT. Customs rejected the claim, upheld by the appellate authority.

The appellant argued that they paid duty for 200 MT but received only 188.236 MT, justifying remission and refund. Citing precedents, appellant contended duty demand for the entire quantity was unjustified. The Department argued weight loss due to long storage, delay not attributable to customs, resolved only by High Court order.

The Tribunal observed no physical weighing of goods upon landing or receipt in the warehouse. Delay in clearance due to adulteration issue, extraneous matter segregation, and re-testing. Tribunal noted a further loss of weight of about 2.169 MT. Tribunal found no loss of imported goods, emphasizing the peculiar case of segregation of contaminated material. Weather conditions causing a variation in weight were deemed irrelevant.

Precedents cited by the appellant were deemed inapplicable. Tribunal clarified the distinction between the present case and the cases cited. Section 23 of the Customs Act on remission of duty due to loss, destruction, or abandonment of goods was discussed. The loss of organic extraneous matter, not the goods themselves, was the issue. As the loss was not related to the goods, Section 23 was deemed inapplicable, and remission was denied.

In conclusion, the Tribunal held that remission under Section 23 was not warranted in this case. The original authority's decision to reject the refund claim was upheld, and the appeal was rejected.