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Issues Involved: Challenge to demand notice u/s 72(1) of the Customs Act, 1962; Relinquishment of title to imported goods u/s 23(2) of the Act; Legal validity of demand notice; Failure to shift and sell goods as per court order.
Challenge to Demand Notice u/s 72(1) of the Customs Act, 1962: The petitioners, a registered Company, challenged the legality of a demand notice dated June 14, 1983, issued by the Assistant Collector of Customs, calling for duty payment u/s 72(1) of the Act and interest. The petitioners imported Polyster Filament Yarn, partially drawn as "POY", for manufacturing textile goods. Despite relinquishing title to damaged goods, the Assistant Collector demanded duty payment after the warehousing period expired, leading to the petition challenging the notice. Relinquishment of Title to Imported Goods u/s 23(2) of the Act: The petitioners, after a survey indicating considerable damage to the imported goods, relinquished their title to the remaining POY under Section 23(2) of the Act before an order for clearance for home consumption was made. The Assistant Collector's demand notice ignored this provision, leading to a dispute over duty payment. Legal Validity of Demand Notice: The Assistant Collector's demand notice, issued after the warehousing period expired, sought duty payment despite the petitioners' relinquishment of title to the goods. The petitioners argued that the demand was illegal as they had exercised their right u/s 23(2) and were not liable to pay duty. The Court found the demand unsustainable and lacking legal authority, quashing the notice. Failure to Shift and Sell Goods as per Court Order: Despite court orders to shift and sell the goods after relinquishment of title, the respondents failed to comply, leading to multiple motions and delays. The Court, noting the rapid deterioration of the goods, directed the respondents to shift the goods to another location and sell them as per the earlier order, emphasizing the need for timely compliance. Conclusion: The Court ruled in favor of the petitioners, quashing the demand notice u/s 72(1) of the Customs Act. The bond executed by the petitioners was canceled, and costs were awarded to the petitioners. The judgment highlighted the importance of legal provisions governing duty payment and the rights of importers under the Customs Act, emphasizing the need for compliance with court orders in a timely manner.
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