2007 (12) TMI 117 - AT - Customs

Appellant, Software Technology Park (STP) - certain bonded goods have become obsolete & they wouldn t be further useful for developments of software - appellants hadn t applied for extension of warehousing period - even though they are obsolete, are still in bonded premises, they haven t yet been cleared - it is on record that the bonded premises licence is valid till 4-5-09 - so, in terms of the Circular 7/05, the warehousing period automatically gets extended demand & interest are premature

Summary

Issues:
Appeal against duty liability, interest, and penalty imposed on a Software Technology Park (STP) unit for certain bonded goods becoming obsolete and not applying for extension of warehousing period.

Analysis:
The appeal was filed against the Order-in-Appeal passed by the Commissioner of Customs (Appeal) Bangalore, confirming duty liability, interest, and imposing a penalty on the STP unit. The appellants had paid the duty liability and interest but contested the penalty. The advocate for the appellant argued that the warehousing period automatically extends as per Board's Circular No. 7/2005-Cus. until the expiry of the warehousing license in 2009. He cited relevant case laws supporting the extension of warehousing period and non-demand of duty until the expiry of the period.

The Departmental Representative reiterated the impugned order, but upon careful consideration, the Tribunal found that the goods, although obsolete, were still in the bonded premises and had not been cleared. The warehousing license was valid until 2009, and as per the Board's Circular, the warehousing period automatically extended. The Tribunal noted that the duty demand and penalty imposition were premature. The appellants had paid the duty under pressure from Departmental officials, and the penalty imposed was almost equal to the duty amount, leading to the appeal. The Tribunal, based on the Circular and relevant case laws, allowed the appeal, setting aside the Order-in-Appeal and providing consequential relief to the appellants.

In conclusion, the Tribunal held that the duty demand was premature, and the penalty imposition was unjustified. The decision was based on the validity of the warehousing license until 2009, the goods still being in the bonded premises, and the automatic extension of the warehousing period as per the Board's Circular. The appeal was allowed, providing relief to the appellants by overturning the impugned Order-in-Appeal.