2000 (8) TMI 96 - HC - Customs

Summary

Issues:
Claim for remission of duty under Section 23 of the Customs Act on the grounds of goods being destroyed before clearance for home consumption.

Analysis:
1. The assessee, a manufacturer of earth moving equipments, imported dumpers in knocked down condition. The goods were examined after clearance and found severely damaged, with the insurer paying a sum equivalent to the value of the goods. The assessee claimed remission of duty under Section 23 of the Customs Act despite receiving compensation. The claim was rejected by the Authorities, Appellate Authority, and Tribunal.

2. The contention was made that the term 'destroyed' in Section 23 should be interpreted as 'reduced to a useless form.' The assessee argued that severe damage rendered the parts useless for assembly. However, the Court held that the right to seek remission on duty for destroyed goods is limited to destruction before clearance for home consumption, which was not the case here.

3. The Court emphasized that the destruction of goods under Section 23(1) should be intimated to Customs before clearance for home consumption. Even though some packages were severely damaged, it was not proven to the Customs Officer that the goods were incapable of repair before clearance. The Court noted that the clearance for home consumption does not automatically bar a claim for remission but found that the assessee did not consider the goods destroyed when clearing them.

4. Section 23 of the Act mandates that the destruction of goods must occur before clearance for home consumption, with the Officer's satisfaction. The Court highlighted that damaged goods fall under Section 22, which requires following specific procedures not done by the assessee in this case. The Supreme Court precedent emphasized proving damage or destruction before clearance as a prerequisite for any claim of remission.

5. Ultimately, the Court ruled in favor of the Revenue, stating that the assessee failed to prove the goods were destroyed before clearance for home consumption. The Revenue was awarded costs, and the claim for remission of duty was dismissed due to the lack of evidence of destruction prior to clearance.