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2024 (4) TMI 1043 - CESTAT MUMBAI100% EOU - Validity of EPCG Licenses - Cancellation of bonded warehouse licence, letter of permission (LOP) and registration - Duty liability u/s 28 - interest - ‘export promotion capital goods (EPCG)’ scheme in the Foreign Trade Police (FTP) - breach of the principles of natural justice - HELD THAT:- On a perusal of the scheme of Customs Act, 1962, we find that there is no provision whatsoever for the consequences of cancellation of a warehousing licence other than through section 58 of Customs Act, 1962 by giving one month notice in writing and opportunity to be heard. Therefore, notwithstanding the issue of letter of permission which was also the genesis of the private warehousing licence, provisions of Customs Act, 1962 do not envisage such deftailing of a scheme in Foreign Trade Policy with the self content and apprehensive provision for a warehousing in chapter IX of Customs Act, 1962 with the procedures formulated for implementation of such a scheme did prescribe the licencing of a private bonded warehouse for enabling operation as export oriented unit (EOU). Such a procedure cannot correct the existence and sanctity of a warehouse licenced under the provisions of chapter IX of Customs Act, 1962. Any termination of the said warehousing licence and its consequence, was necessarily follow the provisions embodied in the said chapter and cannot be said to be linked to a permission accorded under the Foreign Trade Policy (FTP). It may also be noted that the said appendix in the Handbook of Procedures cited in the impugned order had been put in a place solely for the purpose other than the effect of the exemptions in Income Tax Act, 1961. There is no statutory reference whatsoever but Customs Act, 1962 and therefore the procedure prescribed for a scheme under a policy cannot render an institution established and controlled under a statute to be subservient them too. It would, therefore, appear that the impugned order, fastening the consequences of payment of duty on goods that continued to be warehoused till 6th of April 2015 is not only contrary to the provisions of Customs Act, 1962 but also in breach of the principles of natural justice which prescribes consequences of termination of warehousing licence only after completion of the due process. Thus, we set aside the impugned order and, as the show cause notice had not been decided after due consideration of the legal provisions, the matter is remanded to the original authority for a fresh decision on the termination of warehousing licence and consequences thereof, if any, strictly in accordance with law.
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