2022 (11) TMI 170 - AT - Customs

Demand of customs duty - storage of goods outside the bonded warehouse - search was conducted - HELD THAT - Respondent on 16.02.2006 had initially obtained the permission for a private bonded warehouse on an area of 118.195 sq mtrs. Subsequently, when additional land was allotted to Respondent by the Gujarat Maritime Board, they filed the revised Ground Plan with the authorities and sought permission for the additional land to be included in their existing Private Bonded Warehouse Licence and registered Central Excise premises. After the last acquisition of land, respondent filed a revised ground plan for 67,411 sq. mtrs under cover of their letter dated 06.02.2009 with the Assistant Commissioner of Central Excise Bhavnagar for approval of necessary permission and pursuant to the said application, Respondent s premises were visited by the Jurisdictional officers for verification and site inspection on 17.06.2009 and on 3rd July 2009, the Deputy Commissioner granted his approval - in the present matter Commissioner of Central Excise, Bhavnagar vide letter dated 23.03.2010 also informed the DRI that party had applied for approval of additional premises on 06.02.2008 and after getting the verification report dated 17.06.2009 from the Range Superintendent, the Deputy Commissioner of Central Excise, City Division has approved the additional premises on 03.07.2009. The letter of licence issuing authority also clearly state that Warehouse -2 situated on the additional land of 17,415 sq. mtr. stands included in the PWB of respondent with effect from 06.02.2009 under Section 58 of the Customs Act 1962. Since the disputed goods were found within the registered and bonded PBW on the date of search, Ld. Commissioner correctly dropped the demand. There are no infirmity in the impugned order - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether duty-free materials found in Warehouse-2 were removed illegally from the bonded warehouse premises.
2. Validity of the permission granted for extension of the Public Bonded Warehouse (PBW).
3. Interpretation of the relevant provisions of the Customs Act, 1962 regarding the location of the disputed goods.
4. Admissibility of statements made by the directors of the respondent company as evidence.

Analysis:
Issue 1:
The Department filed an appeal against the Order-In-Original passed by the Commissioner, alleging that duty-free raw materials worth Rs. 10,62,68,989 were removed to Warehouse-2 without permission and statutory documents. The Commissioner confirmed a customs duty demand of Rs. 2,29,095 but dropped the demand of Rs. 10,62,68,989, stating that Warehouse-2 was part of the Public Bonded Warehouse (PBW) of the respondent. The Department argued that the goods were found outside the PBW. However, the Tribunal found that Warehouse-2 was included in the PBW from 06.02.2009, based on letters from the Jurisdictional officers, and upheld the impugned order, dismissing the appeal.

Issue 2:
The Department contended that the permission for extension of the PBW was not granted as the application did not specifically mention it. The Tribunal noted that the application dated 06.02.2009 requested approval for additional land, which was subsequently granted by the Deputy Commissioner. The Tribunal found that the necessary permission was indeed granted for the additional land, even if not explicitly mentioned in the application, based on the actions of the authorities and the subsequent approval letters.

Issue 3:
The key question was whether the duty-free materials found in Warehouse-2 were considered outside the bonded warehouse premises. The Tribunal reviewed the history of permissions granted for the PBW, including the revised ground plans and approval letters, concluding that Warehouse-2 was part of the PBW from 06.02.2009. As the disputed goods were found within the PBW during the search, the demand on these goods was deemed unsustainable.

Issue 4:
The Department relied on statements of the directors to argue against the extension of the PBW. However, the Tribunal found that the documentary evidence, including letters from the authorities and the license issuing authority's letter, clearly indicated the inclusion of Warehouse-2 in the PBW. The Tribunal upheld the impugned order based on these undisputed facts, dismissing the Revenue's appeal.

In conclusion, the Tribunal upheld the impugned order, finding no merit in the Revenue's appeal, as the duty-free materials found in Warehouse-2 were considered part of the PBW of the respondent, as established by the permissions granted and documentary evidence presented.