2019 (5) TMI 392 - AT - Customs

Rate of duty - warehoused goods - Filing of Bill-of-Entry for goods on importation - Section 46 of CA - whether for home consumption or for warehousing, a Bill-of-Entry has to be filed only under Section 46 ibid? - HELD THAT - From the conjoint reading of Section 14 and Section 46 of the Customs Act, 1962, it becomes clear that whether the Bill-of-Entry is filed for home consumption or for warehousing, the rate of exchange that would be applicable would be that which is in force on the date on which such Bill-of-Entry is presented. In case of warehousing, this would mean that the exchange rate at the Into-Bond stage in a Bill-of-Entry for warehousing filed under Section 46 ibid, will apply. There is also a provision in Section 59 (2) ibid., to permit the importer to execute a general bond on any such amount as the competent authority may approve, in respect of warehousing of goods to be imported within a specified period. For clearance of the warehoused goods for home consumption, the Bill-of-Entry required to be filed as per Section 68 (a) ibid will have to be done so by the transferee only. So also, the import duty, interest, fine and penalties that may be payable as per Section 68 (b) ibid would also be the liability of the transferee and not of the original owner of the goods. In this case, the appellant is the original owner of the goods and Shri. Ramesh Balasaheb Jagtap is the transferee. Hence, such import duty that is required to be calculated on the assessable value under Section 14 ibid is calculated with reference to the rate of exchange as in force on the date on which the Bill-of-Entry was filed under Section 46 (for Into-Bond warehousing). The rate of duty in case of goods cleared for a warehouse under Section 68 as per the provisions of Section 15 (b), will be that applicable on the date on which the Ex-Bond Bill-of-Entry for home consumption has been filed. The appellant cannot be saddled with the demand upheld in the impugned order - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Incorrect exchange rate declared in Warehouse Bill of Entry.
2. Demand of differential duty with interest.
3. Interpretation of Customs Act provisions regarding In-Bond sale.
4. Liability for payment of duty on transferred goods.
5. Applicability of exchange rate for Bill-of-Entry filing.
6. Dispute over duty liability between original owner and transferee.

Analysis:
1. The appellant declared the wrong exchange rate in the Warehouse Bill of Entry, resulting in a short collection of duty. A Show Cause Notice was issued proposing a demand for the differential duty along with interest. The Original Authority and Commissioner (Appeals) confirmed the demand, leading to the appeal.

2. The appellant argued that the In-Bond buyer, to whom the goods were transferred, should be liable for the duty payment. They contended that the duty should have been demanded from the buyer who filed the Ex-bond Bill-of-Entry for home consumption, not from the appellant who initially imported the goods.

3. The appellant highlighted provisions of the Customs Act related to In-Bond sale, emphasizing that once goods are transferred to another person, the transferee becomes the owner and is responsible for customs provisions. They argued that the duty liability rests on the person who presented the Ex-bond Bill-of-Entry.

4. The Tribunal examined Sections 14, 46, and 59 of the Customs Act concerning the valuation and filing of Bill-of-Entry for imported goods. It concluded that the correct exchange rate should have been adopted at the time of filing the Bill-of-Entry and that the liability for duty payment on transferred goods falls on the transferee.

5. The judgment clarified that the liability for differential duty due to the incorrect exchange rate should be borne by the transferee who filed the Ex-bond Bill-of-Entry for home consumption. The appellant, as the original owner, cannot be held responsible for the duty payment in such a scenario.

6. In light of the discussions and legal provisions, the Tribunal allowed the appeal, setting aside the demand upheld in the impugned order. The judgment emphasized that the differential duty should have been demanded from the transferee, not the appellant, based on the transfer of goods and the applicable provisions of the Customs Act.