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TMI Blog2007 (2) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... may notice in brief the circumstances in which this controversy has arisen. The petitioner had imported the Retrofit Crate Cooler and was warehoused at Customs Warehouse of Central Warehousing Corporation at Udaipur in September 1996. 4. Since it was import of capital goods meant for home consumption in terms of Section 61(l)(b), the statutory period fixed within which the goods were required to be removed from warehousing was till the expiry of one year subjects I to extension of period for keeping it at the warehousing being granted by the competent authority. 5. Due to financial difficulties pleaded by the petitioner-company, M/s. J.K. Synthetics of which J.K. Cement Works is a unit, extension of time for ware housing machinery in question was sought and in the first instance extension was granted upto 31-12-1997. The second application for extension of time until 31st March, 1999 was made pointing out that the petitioner-company has been declared as a sick undertaking as a DIFR and the scheme for rehabilitation is under consideration. The said application for extension of period of warehousing upto 31st March, 1999 was rejected on 11-2-1999. On 25th May, 2001 the Superintend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the petitioner has already been expired whether it was Mill interested to pursue the application for permission to re-export the goods in question by asking to seek specific time limit for re-export and extension of warehousing period. 13. On 7-11-2003, the petitioner was required to furnish certain information in respect of his application for re-export of the machine. 14. On 10-11-2003, the petitioner requested for permission to re-export the machinery and for extension of time for warehousing upto 31st March, 2004. 15. On 21-11-2003, the Dy. Commissioner, Technical replied the petitioner's letter dated 10-11-2003 and asked for further information about the re-export application concerning the prospective buyer, agreement, expected price and whether the RBI permission/authorization has been obtained and whether the extension upto 31st December, 1999 has been granted to it. On 24th December, 2003 again information was expeditiously solicited from the petitioner in pursuance of earlier notice dated 31st November, 2003. 16. While pursuit of seeking permission to re-export the machine in was going on and was under consideration before the respondents, the petitioner moved a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ousing charges relinquish his title in goods in terms of provision, and if he does so, he is not liable to pay duty is clear mandate. It does not affect the validity of order passed under Section 72 but affects the owner's liability to pay duty on such goods owned by him. The title in respect of which has been relinquished is still lying in the warehousing. 21. It is contended, on the other hand, by the learned Counsel for the Revenue that once the goods are deemed to have been removed from the warehousing, under Section 72 the same cannot be considered as the goods lying in the warehousing notwithstanding the goods may not have been actually removed and may still be lying in the warehouse. The levy of duty being itself not under challenge, the petitioner is not entitled to avail the benefit of proviso to Section 68. 22. The reliance has been placed on the decision of the Supreme Court in Kesoram Rayon v. Collector of Customs, Calcutta, 1996 (86) E.L.T. 464 (S.C.) in support of the contention that over stay of the goods in warehousing beyond the extended period permitted for the purpose of such storage amounts to improper removal of goods and case being not covered by Section 61( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 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 duty accounted for to the satisfaction of the proper officer, the proper officer may demand, and the owner of such goods shall forth with 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." 26. A perusal of Section 72 goes to show that whereas clause (a) deals with actual removal of goods without proper authorization and duties become chargeable on goods actually removed clause (b) of Section 72(1) shows that duty is chargeable without, removal of goods from the warehouse but because of the over stay in the warehouse only. 27. With the aforesaid proviso inserted w.e.f. 14-5-2003, Section 68 reads as under :- "Section 68. Clearance of warehouse goods for home consumption. - The importer of any warehoused goods may clear them for home consumption if— (a) a bill of entry for home consumption in respect of such goods has been presented in the prescribed form; (b) the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r by the proper officer as well as exercise of the option by the owner of the goods. It is within the domain of the proper officer not to extend the period for retaining goods in warehouse and raise a demand under Section 72(1)(b) and it is in the domain of the owner of such goods that in such circumstances, he may mitigate his liability by relinquishing his title to the goods in favour of the Revenue upon payment of rent, interest and other charges and penalty as may be payable under the Act and then the proper officer can deal with such goods in the manner he likes for the purpose of effecting recoveries. But in such event law specially envisage that no duty is payable on such goods. 32. In such event, the property having vested in respondents is not available for effecting recoveries from the owner which is due in relation thereof in respect of rent, interest, other charges and penalty that is payable otherwise then relinquish in favour of revenue. Apparently, under proviso to Section 68 an option is given to the assessee to relinquish his ownership in favour of the revenue in lieu of duties payable thereon. The other liabilities remaining recoverable from him. 33. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for procedure for seeking an order of clearance of particular goods from warehouse for home consumption, Section 69 provides for procedure for clearance of goods from warehouse for the purpose of re-export. If the order passed under Section 72(1)(b) is considered as bar against the invoking provisions to Section 68 or invoking Section 68 itself, it shall obviously be barred in maintaining the application under Section 69. Apparently, the respondents were not considering the application under Section 69 to be not maintainable. The only condition for inviting application of proviso to Section 68 is that before the importer could exercise his option for relinquishing his title in the goods no order of clearance of such goods for home consumption had been made. Apparently, the other conditions implicit in such option is that the goods must still be in warehouse where from they can be cleared for the home consumption so that when the relinquishment is made the importer has also the option to seek clearance of such goods for home consumption. 36. We are, therefore, not impressed with the contention raised by the Revenue. In case where the order under Section 72(1)(b) has been made, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and statutory option made available to owner of imported goods before the same are authorized for removing the same for home consumption in respect of goods lying in ware house was not the issue before the Supreme Court. 39. Question of ambit and scope of proviso to Section 68 was not before Supreme Court, nor it could have been because the said proviso had not come into force at that time. The primary issue raised before the Supreme Court was about the rate at which the duty is to be levied under Section 72(1)(b). It was a case in which the goods have been over stayed in the warehouse and the duty has been levied under Section 72(1)(b). The proper officer has levied the duty at the rate it was chargeable on the date the extended period for keeping the goods had expired. Relying on Section 15(l)(b) the importer has contended that for invoking the rate of duty, date of actual removal is relevant and since on the date of actual removal exemption notification was in force, no rate was applicable to him. 40. While answering that question the Court said that the goods which are not removed from a warehouse within the permissible period are treated as goods improperly removed from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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