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2022 (2) TMI 801 - AT - CustomsRejection of request for extension of warehousing period and reexport in respect of 21 consignments of imported capital goods - rejection only on the ground that with reference to the bonded goods the SCN was issued and demand was confirmed and the same was upheld by the Tribunal - HELD THAT - Even though the demand was confirmed but the goods are still lying in the warehouse and not cleared there from the custom duty is payable only at the time of clearance from the warehouse for home consumption. So long the goods remained in the warehouse no custom duty required to be paid - In the present case the appellant s request is to allow the re-export of the bonded goods. When the bonded goods isexported without taking a clearance for home consumption no custom duty can be demanded on such re- export of the goods. On perusal of provision of Section 69 it is clear that warehouse goods are allowed to be exported from the warehouse without payment of duty. In the present case this fact is not under dispute that the goods which sought to be exported are indeed warehoused goods as the same are still lying in the Warehouse. As per this statutory provision even though the duty was otherwise confirmed by the adjudication process the same is payable only when the goods are cleared for home consumption but by virtue of Section 69 when the appellant seeks export of goods from the warehouse itself the same shall be allowed without payment of duty. As regard the provision under Section 72(1)(d) of the Customs Act, 1962 it indicates that where bonded warehoused goods have not been cleared from home consumption, the proper officer may demand the duty and the owner of such goods shall forthwith pay full amount of duty chargeable on account of such goods together with all penalties , rent, interest etc and if owners fails to pay the amount demanded under subsection(1) the proper officer may detain the said goods and thereafter sell them after notice to the owner in terms of Section 72(1) (d)ibid. In our view this provision applies firstly when the department wish to sell the goods by auction. Secondly, only in case when the appellant failed to clear the goods for home consumption. In the present case it is the appellant s request to allow the re-export of the goods therefore, in terms of the circular dated 14.01.2003 despite the provision under section 72(1)(d) the re-export is permissible without payment of duty. Therefore, there is no conflict between the board circular 03/2003-Cus dated 14.01.2003 and Section 72(1)(d) of the Customs Act, 1962 as the said section is applicable only in case when the goods are cleared for home consumption or in case the appellant do not intend to clear the goods and department proceed to sell the goods by auction. In the present case neither the goods were cleared for home consumption nor the department has initiated any action for sale of the goods. Therefore, in terms of the board circular 03/2003-Cus dated 14.01.2003 the appellant is entitled for re- export of the goods without payment of duty and consequently also entitled for extension of warehousing period - the re-export of the imported goods was allowed on payment of 2% differential duty. This benefit is alternatively available to the present appellant also. However, since the appellant sought to export the goods from warehouse itself, even the appellant is not required to pay 2% duty as it is already held that in the case of warehoused goods the export should be allowed without payment of duty. The appellant is allowed to re-export the warehoused goods without payment of duty/fine/penalty if any - the warehousing period of the imported goods shall also be extended for 6 Months or further period within which the goods are re-exported - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Rejection of application for extension of warehousing period and re-export of imported capital goods. 2. Confirmation of customs duty demand and penalties. 3. Applicability of Board Circulars and statutory provisions regarding re-export and warehousing period extensions. 4. Legal precedents and their relevance to the case. Issue-wise Detailed Analysis: 1. Rejection of Application for Extension of Warehousing Period and Re-export: The appellant's application for extending the warehousing period and re-exporting 21 consignments of imported capital goods was rejected by the Chief Commissioner of Customs. The appellant argued that the rejection was against Board Circular 03/2003-Cus dated 14.01.2003, which allows re-export of warehoused goods even after the bonding period has expired and demand notices have been issued. The appellant maintained that as the goods remained in the warehouse, re-export should not attract any duty. 2. Confirmation of Customs Duty Demand and Penalties: The department had issued 16 Show Cause Notices (SCNs) and confirmed a total customs duty amount of ?5,30,36,179/- along with penalties. Appeals against these orders were dismissed, and subsequent SCNs confirmed additional duties and penalties. The appellant's financial constraints and the status of the company as a sick industrial unit under SICA were highlighted, arguing that these factors should be considered for extending the warehousing period and permitting re-export. 3. Applicability of Board Circulars and Statutory Provisions: The appellant cited Section 69 of the Customs Act, 1962, which allows warehoused goods to be exported without payment of duty. They also referred to Board Circular 03/2003-Cus, which supports re-export of warehoused goods even if the bonding period has expired. The appellant argued that the Chief Commissioner has the power to extend the warehousing period as per Section 61 of the Customs Act, 1962, and that the adjudication process for demand confirmation was unwarranted as per Board Circular No. 13/96-Cus dated 28.02.1996. 4. Legal Precedents and Their Relevance: The appellant referenced several legal precedents, including judgments from the Gujarat High Court, Karnataka High Court, and various CESTAT decisions, which support the re-export of warehoused goods without payment of duty. The appellant also highlighted cases where re-export was allowed despite the expiry of the warehousing period and confirmed demand notices. The department's reliance on certain judgments was countered by the appellant, arguing that subsequent Board Circulars and higher court rulings favored their case. Tribunal's Findings: The Tribunal noted that the goods were still lying in the warehouse and had not been cleared for home consumption, meaning no customs duty was payable at that stage. The Tribunal emphasized that Section 69 of the Customs Act allows warehoused goods to be exported without payment of duty. The Tribunal also highlighted Board Circular 03/2003-Cus, which mandates extending the warehousing period to enable re-export of goods. The Tribunal found that the appellant's request for re-export should be allowed and the warehousing period extended accordingly. Conclusion: The Tribunal allowed the appellant to re-export the warehoused goods without payment of duty or penalties. The warehousing period was extended for six months or until the re-export was completed. The appeal was allowed in these terms, ensuring compliance with relevant statutory provisions and Board Circulars. Order: 1. The appellant is allowed to re-export the warehoused goods without payment of duty/fine/penalty. 2. The warehousing period of the imported goods is extended for six months or until the goods are re-exported. 3. The appeal is allowed on these terms.
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