2008 (2) TMI 25 - SC - Customs

Untimely request by importer to re-export the warehoused goods & for the cancellation of the auction sale Circular 14.1.03 taking liberal view not applicable to grant permission of re-export if warehousing period has been expired & demand notices are issued even if surrender had been withdrawn

Issues Involved:
1. Extension of the warehousing period beyond the statutory limit.
2. Surrender and subsequent withdrawal of rights over the goods by the respondent.
3. Legality of the High Court's interference and its orders.
4. Applicability of circulars issued under Section 151-A of the Customs Act.
5. Nature of the High Court's order as a consent order.

Issue-wise Detailed Analysis:

1. Extension of the Warehousing Period Beyond the Statutory Limit:
The primary contention was whether the warehousing period could be extended beyond the one-year limit prescribed under Section 61(1)(b) of the Customs Act. The goods were warehoused initially for one year starting from 30th May 1996, with several extensions granted up to 31st January 2001. The appellant argued that these repeated extensions were not authorized by law, as the Act did not visualize such extensions beyond the statutory limit. The Supreme Court noted that the maximum permissible period had expired, and therefore, the goods vested in the Union of India under Section 72.

2. Surrender and Subsequent Withdrawal of Rights Over the Goods by the Respondent:
The respondent surrendered all rights to the goods via a letter dated 31st December 2004, citing the inability to implement the purpose for which the goods were imported. Although the respondent later attempted to withdraw this surrender, the Supreme Court held that the initial surrender was binding and could not be retracted. The Court emphasized that the respondent's subsequent actions did not alter the legal effect of the initial surrender.

3. Legality of the High Court's Interference and Its Orders:
The High Court had directed the Commissioner to consider the respondent's application for re-export of the goods, which was ultimately rejected by the Chief Commissioner on 3rd January 2006. The respondent's subsequent writ petitions and appeals were dismissed, including a Special Leave Petition by the Supreme Court on 3rd February 2006. The Supreme Court found that the High Court's interference was unjustified as all legal and factual issues had already been decided against the respondent in previous litigations.

4. Applicability of Circulars Issued Under Section 151-A of the Customs Act:
The respondent argued that several circulars issued by the Customs Department under Section 151-A authorized extensions of the warehousing period. Specifically, the circular dated 14th January 2003 allowed re-export of goods even if the warehousing period had expired. However, the Supreme Court noted that these circulars could not authorize deviations from the statutory provisions. The Court highlighted that the circular of 14th January 2003 did not apply in this case, as the goods had already been put to auction before the respondent's request for re-export.

5. Nature of the High Court's Order as a Consent Order:
The respondent claimed that the High Court's order dated 9th August 2006 was a consent order, which was later clarified by the High Court on 14th February 2007. The Supreme Court, however, found no evidence of consent from the Union of India or its counsel. The Court concluded that the High Court's order was not a consent order and thus did not bind the Union of India.

Conclusion:
The Supreme Court allowed both appeals, finding that the extensions of the warehousing period were unauthorized, the respondent's surrender of rights was binding, and the High Court's orders were unjustified. The Court also ruled that the circulars under Section 151-A did not override statutory provisions and that the High Court's order was not consensual. The appeals were allowed without any order as to costs.

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