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2024 (6) TMI 1334 - AT - CustomsEntitlement for conversion of Ex- Bond Bill of Entry into Into-Bond Bill of Entry or not - Section 46 (5) of Customs Act - HELD THAT - In this case it is not disputed that initially the appellant has filed Bills of Entry for warehousing if the Bills of Entry has been filed for warehousing then Section 68 of the Act shall come into force for clearance of the said goods for home consumption. In terms of Section 68 the conditions are to satisfy that the duty interest and penalty should be paid and an order of clearance of such goods for home consumption has to be made by the proper officer - Admittedly in this case the appellant filed the Bills of Entry for home consumption but neither the duty was paid nor any order for clearance of such goods for home consumption was made by the proper officer and in the meantime the appellant filed an application for withdrawal of Ex-Bond Bills of Entry and reinstatement of Into Bond Bills of Entry. The provisions of Section 46 (5) of the Act are applicable in a case where Ex-Bond Bill of Entry Into Bond Bill of Entry or vice versa can be permitted if there is no revenue loss or there is no fraudulent intention - it is a fit case for consideration of the request made by the appellant on 08.10.2021 in the light of the provisions of Section 46 (5) of the Act. Admittedly on 08.10.2021 there is no change of rate of duty and till three months in terms of Section 61 (2) of the Act the appellant is not required to pay any interest. Admittedly for clearance of goods under Section 68 of the Act the provisions of Section 47 (2) are not attracted. We hold that the provisions of Section 47 of the Act are not applicable in the present case as the appellant has initially filed in to Bond Bills of Entry for warehousing. Section 68 of the Act is applicable in this case. As after filing Ex-Bond Bill of Entry on 21.09.2021 28.09.2021 the condition of Section 68 of the Act were not satisfied and as no assessment was done for clearance of goods in question therefore the application dated 08.10.2021 is required to be disposed off - Admittedly on 08.10.2021 there is no change in rate of duty and if the said application filed by the appellant would have been considered and disposed off on the same date in that case the appellant was entitled for withdrawal/cancellation of Ex-Bond Bill of Entry and reinstatement of Into Bond Bills of Entry. It is concluded that the application for withdrawal/cancellation of Ex-Bond Bill of Entry and reinstatement of Into-Bond Bill of Entry was required to be considered by the authorities below in terms of Section 46 ( 5) of the Act immediately i.e on the date of filing of the said application. Further on the said date i.e. 08.10.2021 there was no revenue loss and the interest of revenue has not been affected. Further no fraudulent act is proved against the appellant - the appellant is liable to pay duty on applicable rate at the time of clearance of goods for home consumption and required to pay interest if any in terms of Section 61 (2) of the Customs Act 1962. The duty is to be calculated accordingly and the same is liable to be paid along with interest if applicable at the time of clearance of goods and accordingly the liability of the appellant is to calculate. If any excess duty has been paid by the appellant the same is refundable to the appellant along with interest. Appeal disposed off.
Issues Involved:
1. Entitlement to conversion of Ex-Bond Bill of Entry into Into-Bond Bill of Entry under Section 46(5) of the Customs Act. 2. Consideration of revenue loss and fraudulent intention under Section 46(5). 3. Applicability of Section 68 and related provisions for clearance of warehoused goods. 4. Impact of delayed action by the authorities on the appellant's application. 5. Refund of excess duties and interest. Detailed Analysis: 1. Entitlement to Conversion of Ex-Bond Bill of Entry into Into-Bond Bill of Entry under Section 46(5) of the Customs Act: The appellant filed Bills of Entry for warehousing on 06.09.2021 and 20.09.2021 and subsequently filed Ex-Bond Bills of Entry for home consumption on 21.09.2021 and 28.09.2021. On 08.10.2021, the appellant sought to withdraw/cancel the Ex-Bond Bills of Entry and reinstate the Into-Bond Bills of Entry. Section 46(5) of the Customs Act allows substitution of a Bill of Entry for home consumption for a Bill of Entry for warehousing or vice versa, provided there is no revenue loss and no fraudulent intention. The appellant argued that there was no loss of revenue or fraudulent intention as the application was made before the reduction in duty rates effective from 14.10.2021. 2. Consideration of Revenue Loss and Fraudulent Intention under Section 46(5): The appellant contended that the conditions under Section 46(5) were met on the date of the application (08.10.2021), as there was no loss of revenue or interest. The appellant could not have anticipated the subsequent reduction in duty rates, and there was no fraudulent intention. The authorities, however, rejected the application citing potential revenue loss due to the subsequent reduction in duty rates. The Tribunal noted that on 08.10.2021, there was no change in the duty rate, and the application should have been considered promptly. 3. Applicability of Section 68 and Related Provisions for Clearance of Warehoused Goods: Section 68 of the Customs Act deals with the clearance of warehoused goods for home consumption, requiring the filing of a Bill of Entry for home consumption, payment of duty, interest, fine, and penalties, and an order for clearance by the proper officer. The Tribunal found that the appellant had filed Bills of Entry for warehousing initially, and the conditions under Section 68 were not met as no duty was paid, and no clearance order was issued. The application for withdrawal/cancellation of Ex-Bond Bills of Entry and reinstatement of Into-Bond Bills of Entry was thus valid under Section 46(5). 4. Impact of Delayed Action by the Authorities on the Appellant's Application: The Tribunal emphasized that the authorities' delay in acting on the appellant's application led to a situation where the reduced duty rates came into effect, resulting in a perceived revenue loss. The Tribunal held that the authorities could not benefit from their own delay and inaction. The application should have been considered and disposed of promptly on 08.10.2021, when there was no revenue loss. 5. Refund of Excess Duties and Interest: The Tribunal concluded that the appellant's application for withdrawal/cancellation of Ex-Bond Bills of Entry and reinstatement of Into-Bond Bills of Entry should be allowed. The duty should be calculated based on the applicable rate at the time of clearance of goods for home consumption, and any excess duty paid by the appellant should be refunded along with interest. The appellant is also liable to pay interest, if any, in terms of Section 61(2) of the Customs Act. Conclusion: The appeal is allowed, and the application for withdrawal/cancellation of Ex-Bond Bills of Entry and reinstatement of Into-Bond Bills of Entry filed on 08.10.2021 is accepted. The duty is to be calculated accordingly, and any excess duty paid by the appellant is to be refunded along with interest. The appeal is disposed of in these terms.
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