2015 (11) TMI 444 - AT - Customs

Relinquishment of title to the goods under Section 68 - the demand of duty in respect of time expired warehoused goods - Penalty u/s 117 - Held that - Apex Court certainly decided in the case 1996 (8) TMI 109 - SUPREME COURT OF INDIA that the Goods which are not removed from a warehouse within the permissible period are treated as goods improperly removed from the warehouse. Such improper removal takes place when the goods remain in the warehouse beyond the permitted period or its permitted extension. The importer of the goods may be called upon to pay Customs duty on them and, necessarily, it would be payable at the rate applicable on the date of their deemed removal from the warehouse, that is, the date on which the permitted period or its permitted extension came to an end . - first proviso to Section 68, which allowed relinquishment, was introduced on 14.5.2003, that is well after the expiry of warehousing periods in respect of all Bonds in the present case. plea that interest and penalty have been wrongly demanded under Section 47 and 117 is unacceptable. Mere quoting of another Section in the show cause notice when the appropriate Section has also been quoted does not make the confirmation of interest and penalty illegal. - Decided against assessee.

Issues Involved:
1. Demand of duty under Section 72(1) of the Customs Act, 1962.
2. Imposition of penalty under Section 117 of the Customs Act.
3. Rejection of request for relinquishment of title to the goods under Section 68.
4. Preliminary objections regarding procedural aspects of the notices and adjudication.

Issue-wise Detailed Analysis:

1. Demand of Duty under Section 72(1) of the Customs Act, 1962:
The appellant had stored goods in a private bonded warehouse, and the bond periods for these goods had expired. The Commissioner (Appeals) upheld the adjudicating authority's order confirming a demand of Rs. 3,61,21,722/- under Section 72(1) of the Customs Act for goods remaining in the warehouse beyond the expiry of the bond period. The appellant's request for re-export of the goods was not allowed, and the High Court rejected the permission to re-export on the grounds that Section 69 operates only within the validity of the bond period. The Tribunal found that the appellant was aware that duty becomes payable under Section 72(1) upon failure to clear goods within the warehousing period, and the department's letters asking for duty payment were valid notices under Section 72. The Tribunal rejected the appellant's argument that no proper demand notices were issued, stating that the demand for duty was justified as the goods were deemed improperly removed from the warehouse.

2. Imposition of Penalty under Section 117 of the Customs Act:
A penalty of Rs. 1 lakh was imposed under Section 117 of the Customs Act. The appellant argued that the show cause notice was issued under Section 124, which pertains to confiscation and penalty, whereas the demand was raised under Section 72, falling under Chapter IX. The Tribunal found that the body of the show cause notice clearly referred to duty payable under Section 72(1), and the mention of Section 124 in the caption did not invalidate the notice. The Tribunal upheld the penalty, stating that the appropriate sections were quoted in the show cause notice, and the confirmation of interest and penalty was legal.

3. Rejection of Request for Relinquishment of Title to the Goods under Section 68:
The appellant sought to relinquish the title to the goods under Section 68, arguing that they had exercised this right before an order for clearance for home consumption was made. The Tribunal noted that the High Court had already rejected the appellant's plea for re-export, and the goods were deemed improperly removed under Section 72. The Tribunal found that the provisions of Section 68 regarding relinquishment do not apply once the warehousing period has expired. The Tribunal relied on various judgments, including those of the High Courts and the Supreme Court, to conclude that the appellant could not relinquish the title to the goods after the expiry of the warehousing period.

4. Preliminary Objections Regarding Procedural Aspects of the Notices and Adjudication:
The appellant raised several preliminary objections, including the non-receipt of demand notices under Sections 72(1) and 72(2), the issuance of the show cause notice under Section 124, and the adjudication by the Deputy Commissioner despite the value of goods exceeding Rs. 2 lakhs. The Tribunal addressed these objections, stating that the department's letters asking for duty payment were valid notices under Section 72, the body of the show cause notice correctly referred to Section 72(1), and the value limits in Section 122 apply only to confiscation cases. The Tribunal rejected these objections, finding them to be technicalities without substance.

Conclusion:
The Tribunal confirmed the demand of duty and penalty, rejected the claim for relinquishment of the title to the goods, and dismissed the preliminary objections raised by the appellant. The appeal was disposed of, and the exact amount of duty corresponding to the time-expired bonds was to be worked out by the adjudicating authority. The miscellaneous application and stay application were also disposed of.

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