2024 (4) TMI 338 - AT - Customs

Denial of relinquishment of title of part (balance) goods lying in the warehouse - HELD THAT - The Commissioner (Appeals) have erred by not taking notice of the subsequent amendments made in section 68 wherein proviso was inserted by Finance Act 2003 w.e.f. 14.05.2003 - The words of rent interest other charges and penalties appearing in the aforementioned proviso before penalties were omitted by Finance Act 2016 dt.14.05.2016. Upon careful reading of section 68 as amended by the provision for relinquishment of title to warehoused goods inserted w.e.f. 14.05.2003 and the subsequent amendment made in the year 2016 to remove other charges and fees from its provisions it is clear that the said proviso has extended the time available to the owner/importer of warehoused goods for relinquishment of title till or before an order for clearance of such goods for home consumption as mentioned in clause (c) of section 68 has been made by the proper officer. In the facts of the present case the relinquishment of title was made by the appellant well in time as permitted by the Statute as no order for clearance of goods for home consumption was made till that date - the issuance of SCN under section 72(1)(b) for warehoused goods cannot stop the time running and available to the owner to relinquish the title before the order for clearance of such goods for home consumption as stipulated in section 77 read with section 68 is made. The appellant has rightly relinquished the title to the goods during the pendency of the proceedings under section 72(1)(b) of the Act. It is further found that on the date of such relinquishment no case of any offence committed by the appellant under this Act or any other Act for the time being in force is made out in the facts and circumstances - the appellant is entitled to the benefit of relinquishment of title as provided under section 68 of the Customs Act read with proviso. It is further found that appellant has already been imposed penalty of Rs.20, 000/- under section 117 of the Act and the same has already been deposited vide CM No.109 dt.06.09.2019. The impugned order is set aside - appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the demand of duty by the appellant-importer, denial of relinquishment of title of part goods in warehouse, extension of warehousing period, imposition of penalty under section 117, and the interpretation of provisions related to relinquishment of title of warehoused goods.

Demand of Duty:
The appellant filed an appeal against the demand of Rs.1,61,70,808/- and denial of relinquishment of title of part goods in the warehouse. The Commissioner (Appeals) confirmed the duty demand, citing failure to make a relinquishment request before the bond expiry. Reference was made to legal precedents such as CC, Bangalore vs I2 Technologies Software Pvt Ltd and Kesoram Rayon vs CC, Calcutta. The appellant argued that the goods may be cleared after fulfilling conditions u/s 68(1) and that the right to relinquish title exists before clearance order. The Circular No.42/2003-Cus clarified the term 'interest' in section 68. The Tribunal held that the appellant rightly relinquished title before clearance order, entitling them to the benefit u/s 68.

Extension of Warehousing Period:
The appellant faced financial crunch leading to failure in clearing goods after the one-year warehousing period. Requests for extension were made due to financial hardships, but a penalty was imposed under section 117 for non-compliance. The appellant's plea for waiver of bank guarantee terms was rejected. Despite financial constraints, the appellant requested an extension and waiver of bank guarantee, citing ongoing financial difficulties and the COVID-19 pandemic. The Tribunal refrained from imposing further penalty, considering the appellant's financial situation and the penalty already paid.

Denial of Relinquishment of Title:
The appellant requested relinquishment of title of warehoused goods, but the Adjudicating Authority refused, deeming the goods as improperly removed u/s 72. The Commissioner (Appeals) upheld the denial, relying on legal precedents and the deemed removal provision. The Tribunal, however, analyzed subsequent amendments to section 68, inserting provisions for relinquishment of title. The appellant's timely relinquishment of title was deemed valid, absolving them from duty and interest liabilities. The Tribunal allowed the appeal, setting aside the impugned order and granting consequential benefits to the appellant.