2009 (4) TMI 167 - AT - Customs

Warehoused goods rate of duty - . The goods were bonded in the Customs House on 18-1-93. The bond expired on 17-2-93; however, the goods were cleared from the bonded warehouse only on 2-9-94 on payment of duty at the rate prevalent on that date viz. 65% CVD 20% which worked to Rs. 3,17,039/-. Show cause notice dt. 4-3-95 was issued to the appellants proposing levy of duty at the rate applicable on the date of the expiry of the bond period i.e. on 17-2-93 held that - duty liability had been rightly discharged in terms of Section 15(1)(b) of the Customs Act, 1962 - in a case where clearance is made under Section 68 pursuant to a Bill of Entry duly assessed, the relevant date would be the date of payment of duty.

Summary

Issues:
1. Determination of duty rate for goods cleared from a bonded warehouse after the expiry of the warehousing period.
2. Applicability of Section 15(1)(b) of the Customs Act, 1962 in determining the rate of duty for such clearances.

Analysis:
1. The case involved manufacturers of aromatic chemicals importing "Ortho Tertiary Butyl Cyclohexnol" for manufacturing Ylanate Ortho. The goods were bonded in the Customs House but cleared after the bond expiry. The dispute was regarding the duty rate applicable, with the lower authorities upholding a demand based on the rate at the bond expiry. The Tribunal examined the Supreme Court's judgment in Kesoram Rayon and distinguished it, emphasizing the relevance of Section 15(1)(b) for goods cleared under Section 68 after the warehousing period.

2. The Tribunal referenced the decision in Raymond Synthetics v. CC, Allahabad, highlighting that for clearances under Section 68 post-warehousing period, the duty rate is determined at the date of payment. Additionally, the Tribunal cited CBS Gramophone Records & Tapes (India) Ltd. v. CC, emphasizing that the duty rate for goods removed after warehousing should be based on the rate at the actual removal date. The Tribunal differentiated the facts of the present case from Kesoram Rayon, where goods were not cleared under Section 68, leading to a different duty rate determination.

3. Ultimately, the Tribunal accepted the appellants' argument, holding that duty liability was discharged correctly under Section 15(1)(b) of the Customs Act, 1962. Relying on the precedents of CBS Gramophone Records & Tapes and Raymond Synthetics Ltd., the Tribunal set aside the impugned order and allowed the appeal, emphasizing the importance of the specific provisions governing the determination of duty rates for goods cleared post-warehousing period under Section 68.