1995 (2) TMI 181 - AT - Customs

Summary

Issues:
1. Claim for pro rata abatement in duty on imported damaged goods.
2. Interpretation of Section 22 of the Customs Act, 1962.
3. Applicability of specific provisions for warehoused goods.
4. Evidence and timing of damage to the imported goods.

Analysis:
1. The appeal concerned a claim for pro rata abatement in duty on imported seamless carbon steel tubes found damaged at the time of clearance after being warehoused. The claim was made under Section 22 of the Customs Act, 1962, which provides for rebate on proof of damaged imported goods. The Assistant Collector and Collector (Appeals) both denied the abatement, stating that the damage occurred prior to warehousing and was not due to the appellants' default or negligence.

2. Section 22 of the Customs Act, 1962, outlines provisions for abatement of duty on damaged or deteriorated goods. The section categorizes different scenarios for imported goods based on the timing and nature of damage. Specifically, Section 22(1)(a) covers goods damaged before or during unloading, Section 22(1)(b) covers goods damaged after unloading but before examination under Section 17, and Section 22(1)(c) covers warehoused goods damaged before clearance for home consumption due to accident.

3. The judgment emphasizes the specific provision under Section 22(1)(c) for warehoused goods, which requires damage to be on account of an accident not due to negligence, default, or wilful act of the owner. Warehoused goods are defined as goods deposited in a warehouse. The judgment highlights that once goods are warehoused, only the provisions specific to such goods apply for abatement. The judgment also refers to Section 64 of the Customs Act, which grants the owner rights to deal with warehoused goods.

4. The evidence presented in the case indicated that the damage to the imported goods was caused by the effect of sea water and chemicals during transportation and storage. However, the damage was not reported to customs authorities until after the goods were warehoused. The judgment concluded that since the damage to the warehoused goods did not meet the criteria under Section 22(1)(c) and was not reported before warehousing, the claim for abatement was rightfully denied by the lower authorities.

In conclusion, the judgment upheld the decision to reject the appellants' claim for abatement based on the specific provisions of the Customs Act regarding warehoused goods and the timing and nature of the damage to the imported goods.