2002 (4) TMI 125 - AT - Customs

Summary

Issues: Rate of duty applicable to "Warehoused Goods"

Analysis:
The judgment dealt with the issue of the rate of duty applicable to "Warehoused Goods" in two appeals involving Central Public Sector Oil Companies. The Customs Commissioner had held that the new rate of duty, effective post the Budget day, would apply to goods cleared from warehouses after the Budget day. The appellants argued that once all formalities under Section 68 of the Customs Act were completed before the Budget day, the goods ceased to be warehoused goods and should not be subject to the new rate of duty. They contended that the out of charge order indicated the goods were no longer warehoused. The appellants cited legal precedents to support their argument that completion of conditions for clearance should be considered equivalent to actual removal. On the other hand, the Departmental Representative argued that "actually removed" as per Section 15(1)(b) required physical removal of goods. The Department relied on statutory language and a Supreme Court decision to support their stance.

The Tribunal analyzed Section 68 of the Customs Act, which outlines the requirements for clearing Warehoused Goods for home consumption. It was noted that once these requirements were fulfilled before the Budget day, the goods were considered out of customs charge. Legal precedents were cited, such as the Orissa Cement case and the Priyanka Overseas case, to support the view that completion of Section 68 requirements precluded further assessment based on revised rates post the completion date. The judgment highlighted that the rate of duty applicable to warehoused goods should be based on the date of payment of duty, as per a Larger Bench decision of CEGAT. The Tribunal concluded that once duty payment was made under Section 68 before the new rate of duty came into effect, no revised assessment could be imposed based on the date of physical removal post the new rate's implementation.

In light of the analysis, the Tribunal allowed both appeals, stating that the revised rate of duty introduced in the Budget post the completion of Section 68 requirements would not be applicable to the goods involved in the appeals. The decision emphasized that once duty payment was completed in accordance with Section 68 before the new rate's implementation, no further assessment based on the date of physical removal post the new rate's enforcement was permissible.