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TMI Blog2010 (11) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer and A.P. Hegde, Superintendent, for the Department. [Order]. Appellant, a Government of India Undertaking was served with a notice under Section 72 of the Customs Act dated 10-3-2010 by which the Assistant Commissioner had called upon the appellant to deposit a sum of Rs. 60,88,233/- in the Customs Treasury and also ordered that action would be taken under the provisions of Section 72(2) of the Customs Act if the appellant failed to pay the amount of duty demanded in the said notice. On the said notice, the Assistant Commissioner passed the impugned order dated 10-6-2010 ordering detention of the goods equal to the value of the duty demanded and also a personal penalty of Rs. 10,000/- under Section 117 of the Customs Act upon the appellant by the impugned order. 2. The Stay Petition has been examined by me. The Assistant Commissioner of Customs (P) has ordered detention of the goods and sale of the said goods equal to the amount of custom duty payable by the appellant. Infact, pursuant to the said order in original, the customs authorities have separately kept aside the said goods and have sealed them and kept them in the Airport premises. Prima facie, based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... register in the Duty Free Shop commodity-wise and not with reference to the bond in the Chowgule Warehouse. Therefore, as per the terms of the licence, once the goods are transferred from the Chowgule Warehouse to the Duty Free Shop they lost their identity as to the distinctive bond number under which they were warehoused and goods were recorded in the stock register and maintained in the Duty Free Shop commodity-wise. Thus there is no requirement of maintaining a separate bond register or bond numbers after the goods are transferred to the Duty Free Shop. 4. Appellants have raised the following major grounds in their appeal against the impugned order. (a) The allegations made in the notice under Section 72 that the appellant has not got the warehousing period extended in receipt of the goods imported by them is not correct. The notice under Section 72 does not make a mention as to whether the goods pertain to the Chowgule Warehouse or in the Duty Free Shop and there is no indication in the said notice as to the period for which the extension has not been sought by the appellant. Therefore, the appellant has been left in the dark as to the nature of the allegations against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of the license the goods of a particular type are imported under various bond numbers but they lose their identity as to the bond numbers under which they have been imported and warehoused, once they are transferred to the Duty Free Shop, so the question of seeking extension of the bond till the goods are actually sold, does not arise because the terms of the license do not require or specify a bonding period for the goods which are transferred to the Duty Free Shop. Thus the notice under Section 72 and the order under appeal passed by the Assistant Commissioner are both illegal and unsustainable in law and are required to be set aside. (e) That the only argument put forth by the Assistant Commissioner is that the Duty Free Shop is licensed under Section 58 of the Customs Act and therefore the provision of Section 61(b) would apply to storage of the said goods in the Duty Free Shop till sale to the passengers. They have submitted that this finding is not sustainable in law and is an improper finding and erroneous in clear violation of the terms of the license and thus this reasoning given in the order under appeal is not valid in law and the entire order is required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be complied with. In the present case the requirement of Section 59 60 are complied with and insisted upon by the Customs Department only in respect of the goods which are stored in the Chowgule Warehouse in the Domestic Tariff Area. The said requirement is not insisted in respect of the goods in the Duty Free Shop since a separate bond is not executed in respect of the goods stored in the Duty Free Shop. Therefore, when the requirement of Section 61(1)(b) of the Customs Act are themselves not applicable the question of demanding duty by the Assistant Commissioner of Customs on the ground that extension of the bond has not been sought till the goods are sold in the Duty Free Shop does not arise. (i) That even the other requirement of a warehouse viz Section 62 of the customs Act has been done away with in respect of the Duty Free Shop as per the terms of the license. In fact the terms of the license make it very clear that the supervision of the Customs Department is limited to ensure that the goods are sold only to the arriving and departing passengers from the Duty free Shop. Therefore when the Department is well aware that the Duty Free Shop is a retail outlet a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly deviate from the accepted procedure as per the prescribed law and issue the notice under Section 72 and pass the above impugned order dated 10-6-2010 is not sustainable in law as no reason has been given for the said deviation. (m) In a similar case, the notice of demand of duty made in respect of the Duty Free Shop operated by the appellant at Mumbai Airport i.e. on the same reasoning that the extension of the bond has to be sought till the goods are actually sold in the Duty Free Shop, the matter had been taken up in appeal before the Commissioner (Appeals) and vide order dated 3-3-2006 the Commissioner (Appeals) has accepted the contention of the appellant that once the goods are transferred from the warehouse to the Duty Free Shop there was no requirement for the appellant to seek extension of the bond. This procedure was followed by the Customs Department in Mumbai on the same terms as prescribed on the terms of the license for operating the said Duty Free Shop in Goa. Therefore, the impugned order dated 10-6-2010 passed by the Assistant Commissioner of Customs is unsustainable in law. 5. I have examined the impugned order and submissions. 6. The Duty Free Shop is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. Therefore the Duty Free Shop is not in effect a bonded warehouse as understood in the Customs Law. The said Duty Free Shop may be licensed under Section 58 of the Customs Act since there was no other provision available under the Act for licensing the Duty Free Shop. However, the same requirement as in the case of the warehouse is absent in the case of the Duty Free Shop. 10. Further, the control over the warehoused goods under Section 62 of the Customs Act is also not applicable in the case of the Duty Free Shop. The said Section 62(2) which requires that no person shall enter a warehouse or remove the goods therefrom without the permission of the proper officer is not applicable to the Duty Free Shop since the goods are sold to the arriving and departing passengers at the Airport by the ITDC staff directly. Therefore, to say that there is a violation of Section 72(1)(b) is not correct. Moreover, the provisions of Section 62 are applicable only to the goods stored in the domestic tariff area i.e. Chowgule Warehouse where all the requirements of Section 62 are fulfilled. 11. The requirement of seeking extension of the warehousing period till the goods are sold in the Duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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