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TMI Blog2015 (11) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appeal was also filed. These applications are also taken up along with the main appeal. 2. The appellant and their Associate companies stored goods imported by them in their Private bonded warehouse at Vashi. On 21.6.2001 they requested for extension of 28 time expired bonds which had expired between 16.7.1996 and 29.6.2001 along with a request to transfer these goods to their 100% EOU at Aurangabad. Later, on 6.9.2001 the request was modified for extension of bond in respect of 25 bonds and their re-export instead of transferring to EOU. The duty involved in respect of 25 bonds is stated to be Rs. 3.46 Crores. Another revised request was made on 23.10.2001 for bond extension and re-export in respect of 16 bonds (expired between June 2000 and May 2001) involving duty of Rs. 2.1crores plus interest. As the 100% EOU at Aurangabad was given permission in 2000 and all the bonds had expired prior to that, the request was not considered. Appellants were directed to clear the goods on payment of Customs dues vide department's letter dt. 30.1.2002. The appellants request for re-export of the goods under Section 69 vide Shipping Bill dt. 25.7.2002 was not allowed. 2.1 The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 71(1) & 72(2) was received in respect of only one Bond bearing No. GB/VIL/I-33 dt. 15.6.2004. He also objected that the show cause notice was issued under Section 124 which falls under Chapter XIV of the Act and contemplates SCN only for confiscation and penalty, whereas in the SCN issued, duties have been demanded under Section 72 falling under Chapter IX, which is beyond the scope of Section 124 of the Act. Further, the demand of interest under Section 47 can be raised only on filing of ex-bond Bills of Entries and in any case Section 47 too does not fall under Chapter XIV. Penalty is provided in Section 72(1) which is also under chapter IX and therefore no show cause notice can be issued under Section 124 invoking provisions of Chapter IX. Therefore SCN under Section 124 falling under Chapter XIV cannot demand penalty. He added that there is no demand of penalty under the notice issued for demand of duty issued in respect of one Bond. Lastly, adjudication on relinquishment under Section 68 falling under Chapter IX cannot be conducted under a show cause notice issued under Section 124 of the Act. 4.1. On merits it was emphasised that the show cause notice under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004 (163) ELT 303 (Kar.) in which the Karnataka High Court held that once steps had been taken to auction the goods, question of relinquishment of the goods does not arise. But in their case notices were never served under Section 72 and therefore, the question of department having taken steps to auction the goods did not arise at all. Further he relied on the i2 Technology Software Pvt. Ltd. (supra) which held that there is no prohibition on relinquishment of the title to the goods after expiry of warehouse period. According to him the Department cannot rely on PSI Data System Vs. CC, Bangalore 2004 (163) ELT 302 (Kar.) because it was held that relinquishment of title is not permissible once the Customs authorities determine the duty. He contended that in the instant case for want of notice under Section 72(1), it cannot be said that duties have been determined Lastly, he stated that notices under Section 72(1) and 72(2) of the Act were issued for the first time on 27.5.2013 and received by the appellants on 11.6.2013 after the impugned order-in-appeal dt. 18.3.2013. Therefore, the entire false case of the department stands exposed. 4.4. On interest he stated that Section 47 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the bonded warehouse. He referred to the case of PSI Data Systems (supra) which held that abandonment/relinquishment of title of goods under Section 23(2) after lapse of many years is not allowed. In the case of Commissioner Vs. Decorative Laminates (I) Pvt. Ltd.(supra) it was held that the expression at any time before clearance for home consumption in Section 23 means permitted time period of warehousing and not any period after expiry of warehousing period. In this case, the decisions of Videocon International Ltd. (supra) and i2 Technology Software Pvt. Ltd. (supra) were brought to the knowledge of the Karnataka High Court. Finally, he referred to the case of Allied Fibres Ltd. Vs. Commissioner of Customs, Mumbai 2014 (309) E.L.T. 535 (Tri. Mumbai) wherein after considering all judgments it was held that once the warehousing period has expired the goods are deemed to be improperly removed and the appellants are required to pay duty under Section 72(1) irrespective of the fact that the appellant wanted to abandon or relinquish the title to the goods. 6. We have considered the submissions made by both sides. There are some preliminary objections raised by the appellant whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value of goods is less than Rs. 2 lakhs in terms of Section 122, as it stood before 28-05-2012. We observe that the value limits prescribed in Section 122 apply only to cases where goods are to be confiscated. A plain reading of Section 122 shows that the limitations clearly do not apply to cases where penalty is to be imposed and in the case at hand only penalty is proposed and not confiscation. 6.3 Another issue raised is that adjudication of relinquishment cannot be conducted under Section 124 of the Act. We find that the body and the final para of the SCN involve demand of duty under Section 72(1) and consideration of request of relinquishment under Section 68. And this is precisely what has been done. We find this objection frivolous. 7. To facilitate the examination of the issue on merits, the relevant provisions which are also referred in various judgments cited by both sides are reproduced for convenience of discussion. SECTION 23. Remission of duty on lost, destroyed or abandonedgoods. (2) The owner of any imported goods may, at any time before an order for clearance of goods for home consumption under section 47 or an order for permitting the deposit of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oused goods are removed from a warehouse in contravention of section 71; (b) where any warehoused goods have not been removed from a warehouse at the expiration of the period during which such goods are permitted under section 61 to remain in a warehouse; (c) where any warehoused goods have been taken under section 64 as samples without payment of duty; (d) where any goods in respect of which a bond has been executed under section 59 and which have not been cleared for home consumption or exportation are not duly accounted for to the satisfaction of the proper officer, the proper officer may demand, and the owner of such goods shall forthwith pay, the full amount of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods (2) If any owner fails to pay any amount demanded under sub-section (1), the proper officer may, without prejudice to any other remedy, cause to be detained and sold, after notice to the owner (any transfer of the goods notwithstanding) such sufficient portion of his goods, if any, in the warehouse, as the said officer may select. The central issue to be decided is whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade. The argument is that in terms of the definitions of warehouse and warehouse goods in Sections 2 (43) and 2(44) respectively, read with the provisions of Section 68, it is clear that the goods remain warehouse goods even after the expiry of the period prescribed under Section 61. As such, since no order for clearance for home consumption was made in respect of the warehoused goods, they are entitled to relinquish the title to the goods in terms of the first proviso to Section 68. We find that the arguments raised by the Ld. Counsel now were also raised by them in Writ Petition 2238/2002 filed in the Mumbai High Court when they sought to re-export the warehoused goods in terms of Section 69 of the Act. The Hon'ble High Court held that This contention canvassed,, is devoid of any substance in view of the specific provision made in Section 72(b) of the Act to meet this contingency Section 72 (b) specifically lays down that where an warehoused goods have not been removed form warehouse at the expiration of the period during which such godos are permitted to remain warehouse under Section 61 of the Act, then the proper officer may demand, and on such demand the owner of duty c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Pvt. Ltd. (Supra) before arriving at its decision, therefore the reliance placed by the Ld. Counsel on the latter judgment ( i2 Technology) does not help the cause of the appellant. 7.3. The Ld. AR also relied on the judgment of the Karnataka High Court in the case of PSI System (supra) which held that the relinquishment of title of goods is not permissible after a lapse of number of years. In the present case we note that although the warehousing period expired in the years 1996 to 2001, the request for relinquishment came in the year 2009 i.e. after 8 years, that too when the judgment in the case of i2 Technology Software was delivered. It certainly appears that the appellant have tried to delay the payment of duties on some pretext or the other. As we have noted above, the judgments in the case of Videocon (supra), Decorative Laminate (supra) and PSI System (supra) have sealed their fate. The Tribunal in the case of Allied Fibers Ltd. (supra) also took this view. 7.4. The Ld. Counsel strongly argued that the judgment in the case of Kesoram Rayon Vs. Collector (supra) did not decide the issue at hand. It only decided the date which is to be considered as relevant for determi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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