2004 (12) TMI 226 - AT - Customs

Foreign Trade Policy - extension of warehousing period - validity of EPCG licenses - EXIM Policy - HELD THAT - As both the EXIM Policy as well as Customs Notification No. 49/2000-Cus. specifically provide for the eventuality of an EPCG licence being issued, after an import but prior to clearance of the goods by the Customs, as is apparent from para 6.6 of the EXIM Policy and para 1 of the Notification which required EPCG licence lo be produced for debit by the proper officer of the Customs at the time of clearance. The expression cleared from the Customs and clearance appearing in the EXIM Policy and the Notification had to be constructed as referring to either the date of out of charge order passed under section of the Notification which requires EPCG licence to be produced for debit by the proper officer of the Customs at the time of clearance . In the present case neither of the two events had taken place as the goods had continued to remain where they were (and therefore had not been physically removed) and also, no out of charge order u/s 47 or section 68 had been passed by the proper officer permitting the importer to take charge cash away the goods. The lower authorities have failed to appreciate and take note of the Supreme Court's judgment in the case of Pratibha Processors v. Union of India, 1996 (10) TMI 88 - SUPREME COURT , wherein the Hon'ble Supreme Court, while dealing with a case where an Advance Licence had been produced after the expiry of the bond period, had not only upheld duty-free clearance but also held that no interest could be charged thereon. Board Circular No. 3/2003, completely changed the position with regard to the status of goods remaining in a Warehouse after the expiry of the Warehouse period. This Circular acknowledged that such goods continued to be Warehoused goods and even permitted Export of such goods without payment of duty u/s 69 of the Customs Act or an order had been issued by the Customs authorities demanding duty, interest and other charges on such goods upon expiry of the initial or extended period of warehousing. In view of the findings arrived at, the prayer for Export of the consignment without insisting on duty/interest could be effected as per the Board Circular No. 3/2000, dated 14-1-2003, ordered accordingly appeal disposed off.

Summary

Issues involved:
The issues involved in this case include the extension of warehousing period, validity of EPCG licenses, interpretation of EXIM Policy and Customs Notification, applicability of previous judgments, and the impact of Board Circular No. 3/2003.

Extension of Warehousing Period:
The appellants imported capital goods for setting up a refinery at Jamnagar and deposited them in a private Bonded Warehouse. The initial Warehousing period was valid till a certain date, and the request for extension was rejected by the department. Subsequently, demand notices were issued under Section 72 of the Customs Act 1962 for removal of goods on payment of duty and interest.

Validity of EPCG Licenses:
The appellants obtained EPCG licenses specifically covering the imported goods. The licenses referred to the goods by description and invoice numbers. The relevant EXIM Policy permitted issuance of EPCG licenses for goods not cleared from Customs, provided customs duty had not been paid.

Interpretation of EXIM Policy and Customs Notification:
The Customs Notification required goods to be covered by a valid EPCG license for duty benefits. The appellants claimed benefits as goods remained uncleared after the warehousing period. The lower authorities relied on a previous Tribunal decision, which the appellants contested based on differences in the present case.

Applicability of Previous Judgments:
The appellants argued that the case differed from previous decisions due to specific EPCG licenses issued and the mandatory nature of EPCG Scheme provisions. They highlighted discrepancies in the lower authorities' interpretation of the Supreme Court's judgment in a related case.

Impact of Board Circular No. 3/2003:
The Board Circular acknowledged the status of goods in a warehouse after the warehousing period. It allowed export without duty payment and addressed interest charges. The appellants sought permission to export goods for refurbishment without duty or interest payment, which was granted based on the Circular.

In conclusion, the Tribunal found that the goods were not cleared from Customs due to remaining in the warehouse without duty payment. The specific EPCG licenses and differences from previous cases supported the appellants' claim. The impact of the Board Circular allowed for export without duty or interest payment for refurbishment purposes. Therefore, the appeal was disposed of in favor of the appellants for export of the consignment without insisting on duty or interest, in accordance with Board Circular No. 3/2003.