2018 (7) TMI 190 - AT - Customs

Principles of natural justice - benefit of Advance License - case of appellant is that they were not supplied with the order of rejection of warehousing period extension so that the same could have been appealed against before the Hon ble Tribunal - whether the goods imported earlier and kept under bond which has expired could be extended the benefit of advance licences which has subsequently been issued by the licensing authority? - Held that - The matter is no more res integra in view of judgment in the case of U.K.Paint Industries vs. Commr. Of Customs 2013 (12) TMI 1247 - DELHI HIGH COURT , wherein the department has rejected the request for the release of imported goods against the licence on the ground that the advance licences was issued subsequent to the date of import and it cannot be used for goods imported earlier and on which customs duty is payable in terms of Section 72(1) - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Violation of natural justice in passing the impugned order
- Extension of warehousing period without opportunity of hearing
- Applicability of second demand notice for finalization of provisional assessment
- Challenge to the order of assessment passed by the Assistant Commissioner
- Errors in the impugned order by the Commissioner
- Rectification of defects in the first show cause notice
- Benefit of advance licenses for goods kept under expired bond

Violation of Natural Justice:
The appellant contended that the impugned order was passed in violation of natural justice as they were not provided with the rejection order of warehousing period extension, depriving them of the opportunity to appeal. They argued that extension of warehousing period is quasi-judicial and requires a hearing, citing legal precedents like Anand Laminates Ltd. and Pradeep Ullal vs. Commr. Of Customs.

Applicability of Second Demand Notice:
The appellant argued against the second demand notice for finalization of provisional assessment, stating that ex-bond clearance of warehouse goods constitutes a final assessment, making provisional assessment irrelevant. They relied on the decision in Priya Blue Industries Ltd. vs. Commissioner of Customs to support their position.

Challenge to Order of Assessment:
The appellant highlighted that the order of assessment by the Assistant Commissioner on the ex-bond bill of entry was not contested by the Revenue in appeal, emphasizing that it cannot be altered by another adjudication authority. They referenced the Supreme Court decision in Priya Blue Industries Ltd. to strengthen their argument.

Errors in Impugned Order:
The appellant raised objections to the errors in the impugned order, asserting that the demand notice invoked conditions of the bond incorrectly. They argued that the demand notice was based on erroneous grounds, overlooking communication confirming discharge of export obligations, and that rectifying defects in the first show cause notice through a second demand notice was unsustainable in law.

Benefit of Advance Licenses:
The main issue revolved around whether goods under an expired bond could benefit from advance licenses subsequently issued. The Tribunal referred to the judgment in U.K.Paint Industries vs. Commr. Of Customs, highlighting that duty and interest are chargeable only when duty is payable, and no interest is applicable when exemptions like advance licenses are in play. Citing legal precedents, the Tribunal allowed the appeal based on the established legal principles.

This detailed analysis of the judgment provides insights into the various issues raised by the parties and the Tribunal's reasoning behind its decision.