2003 (11) TMI 157 - AT - Central Excise

Summary

Issues:
1. Duty demand under Section 72 of the Customs Act when goods are stolen in the warehouse.

Analysis:
The case involved four appeals by M/s. Interface Connectronics Pvt. Ltd., Bangalore, concerning the duty demand under Section 72 of the Customs Act when goods were stolen from the warehouse. The Deputy Commissioner of Customs issued show cause notices proposing duty, interest, rent, and penalties for goods stolen before the bonding period expired. The Commissioner (Appeals) confirmed duty and interest but set aside the penalty. The main argument by the appellants was that duty cannot be demanded under Section 72 in this scenario, citing Section 23 for remission of duty for lost or destroyed imported goods and emphasizing the liability on the Public Bonded Warehouse, not the importer.

The Revenue contended that warehousing provisions apply, making the appellants liable for duty as per the bond executed for unaccounted goods. They referred to precedents like Pashupathi Overseas v. CCE, Madras and S.K. Pattnaik v. State of Orissa to support the importer's duty payment responsibility. The Revenue also cited the decision in Bharat Earth Movers Ltd. v. Collector of Customs, Madras, regarding refund claims for pilferage not covered by Section 23 of the Customs Act.

The judgment analyzed the arguments and legal precedents presented by both parties. The appellants argued that the goods were "lost" due to theft, entitling them to remission under Section 23. They referenced the Delhi High Court's decision and subsequent interpretations of "lost" to include theft-induced loss. The judgment highlighted the Calcutta High Court's ruling that no customs duty can be levied on stolen goods, emphasizing that the liability does not continue for stolen goods as per Section 72. The judgment noted that Section 72 circumstances were not applicable, as the goods were stolen, and the appellants were not at fault for failure to account for the stolen goods. Relying on the Calcutta High Court's decision, the judgment concluded that no customs duty could be levied on stolen goods, leading to allowing the appeals with consequential relief, if any.