2023 (4) TMI 516 - HC - Customs

Release of warehoused goods seized by the DRI - Validity of amount collected in the name of rent, insurance and GST charges which are not payable by the appellant - whether this right of CWC to demand and collect rent from the date on which the goods were warehoused stands extinguished in its entirety after the amendment? - HELD THAT - Statutorily CWC was entitled to demand and collect rent. Having steered clear of this aspect, we once again need to examine the facts of the appellant s case. The order of adjudication dated 05.01.2018 imposing fine, duty and penalty was unconditionally accepted by the appellant. The corollary being that the appellant is guilty of having illegally diverted the goods in the local market without utilizing the goods imported under advance license for manufacture of product for export. The question would be whether such a person who has been found guilty of violating the terms and conditions of the advance license can seek for waiver or complete waiver of the warehousing charges. The appellant having accepted the order-in-original holding him guilty of violation of the terms and conditions of the advance license and the provisions of the Act and the goods having detained and kept in the custody of the warehouse from 2002, a vested right accrues in favour of CWC to recover the rent payable to them and therefore the demand made on the appellant by CWC, atleast up to the date when the provision was amended is valid and proper and the said amount already paid by the appellant need not be returned or refunded to the appellant. Appeal dismissed.

Summary

Issues Involved:

1. Legality of warehousing charges/rent demanded by CWC for the period before and after the amendment to Section 68 of the Customs Act, 1962.
2. Retrospective application of the amendment to Section 68 of the Customs Act, 1962.
3. Validity of the demand for warehousing charges by CWC despite the amendment.

Summary:

Issue 1: Legality of Warehousing Charges/Rent by CWC

The appellant filed a writ petition for the return of Rs. 13,04,464/- paid as warehousing charges/rent, insurance, and GST, arguing these were illegally collected. The learned single bench noted that under the pre-amended Section 68, rent was payable for warehoused goods, but this provision was deleted effective 14.05.2016 by the Finance Act, 2016. The court held that CWC was justified in demanding rent for the period before the amendment and the appellant was entitled to a refund for the period after the amendment.

Issue 2: Retrospective Application of the Amendment

The appellant contended that the amendment to Section 68 should be applied retrospectively, arguing that the substitution of the provision means the old rule ceases to exist and the new rule takes its place from the time the original section was enacted. The appellant argued that the amendment did not take away any substantive right nor imposed any penal consequences, thus should be retrospective.

Issue 3: Validity of Demand for Warehousing Charges by CWC

The court held that the appellant, having accepted the order-in-original and paid the demanded amounts, cannot claim a waiver of warehousing charges. The appellant's guilt in diverting goods meant for export justified the detention and warehousing charges. The court noted that the vested right of CWC to demand rent, existing before the amendment, was valid. The learned single bench's decision to grant relief prospectively was not contested by the revenue, and thus the court refrained from expressing an opinion on that aspect.

Conclusion:

The appeal was dismissed, affirming that CWC's demand for warehousing charges up to the date of the amendment was valid and the amount paid by the appellant need not be refunded. The court emphasized that the appellant's acceptance of the order-in-original and the vested right of CWC to recover rent justified the charges demanded for the period before the amendment.