9911796707
TMI Blog2007 (11) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... goods could be sold to recover the customs duty. Meanwhile, the petitioner, acting under Section 63(2) of the Act, sought to put the goods to sale by way of auction. After four failed attempts at getting the minimum value price fixed by the customs authorities, the goods were finally sold by auction with the consent of the customs authorities on 31st August, 2004. The amount recovered by way of auction was Rs. 41,44,555/-. According to the petitioner, he spent an amount of Rs. 2,05,329/- on the auction and this was deducted by him from the sum recovered in the auction. 2. On the basis that M/s. Kushang Apparels had imported CTV kits valued at Rs. 1,23,63,259/- (CIF) and filed 6 inward bills of entry on 9th February, 2001, the customs authorities determined the customs duty payable at Rs.67,17,916/-. The said goods were warehoused after execution of the necessary bonds on 1st March, 2001. The goods were not however cleared by M/s. Kushang Apparels within the warehousing period and nor was any extension sought. The customs department issued notices to M/s. Kushang Apparels on 16th April, 2004 under Section 72(1) of the Act calling upon it to pay the customs duty. A reminder was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a bank guarantee of Rs. 27,47,146/- to facilitate the clearance of the goods. Thereafter the CBEC by the impugned letter dated 17th February, 2005 rejected the Petitioner's contention in its letter dated 29th December, 2004 in view of the judgment of the Supreme Court in Kesoram Rayon v. Collector of Customs - 1996 (86) E.L.T. 464 (S.C.). This is the first impugned letter. 7. The Petitioner wrote to the Commissioner of Customs on 18th February, 2005 informing her that the cargo had been delivered to M/s. Reliable Overseas and that the Petitioner was awaiting the final decision in the matter. The Petitioner wrote a reminder to the customs department on 24th February, 2005 requesting that the customs department should pass a speaking order to enable the Petitioner to avail the remedy by way of an appeal. The customs department by its letter dated 4th March, 2005 reiterated that the auction sale held by the Petitioner pursuant to Section 63 of the Act was not acceptable. Accordingly, the Petitioner was once again asked to deposit the remaining amount of Rs. 27,47,146/-. It was further pointed out that if the amount was not so deposited forthwith the bank guarantee furnished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uing the matter of non-payment of customs duty to the department or warehousing charges to it by the importer M/s. Kushang Apparels. It is also not disputed that the petitioner initiated proceedings to have the goods sold by way of auction under Section 63(2) of the Act in order to first appropriate the warehousing charges from the sale proceeds. Section 63 reads as under: Section 63. - Payment of rent and warehouse charges. - (1) The owner of any warehoused goods shall pay to the warehouse-keeper rent and ware-house charges at the rates fixed under any law for the time being in force or where no rates are so fixed, at such rates as may be fixed by the Commissioner of Customs. (2) If any rent or warehouse charges are not paid within ten days from the date when they became due, the warehouse keeper may, after notice to the owner of the warehoused goods and with the permission of the proper officer cause to be sold (any transfer of the warehoused goods notwithstanding) such sufficient portion of the goods as the warehouse-keeper may Select. 14. It appears that between March 2002 to December 2003 three auctions and one tender sale were attempted but the bid amount was less t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er officer may demand, and the owner of such goods shall forthwith pay, the full amount of duly chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods. (2) If an owner fails to pay any amount demanded under subsection (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. Section 72 comes into play when goods are sought to be improperly removed from the warehouse. In the event of such improper removal the owner of the goods can be asked to 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. 16. It appears that on the facts of the present case the occasion to invoke Section 72(1)(d) would arise only if the goods in respect of which a bond has been executed has not been cleared for home consumption. In such event, the owner of the goods can be asked to pay the entire duty. This ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it takes precedence over recovery of customs duty which is relatable to Section 150(2)(e) of the Act. Viewed from this angle, the right of the petitioner here to recover the warehousing charges from the sale proceeds appears superior to the right of the Revenue to recover customs duty. 19. The reliance placed by learned counsel for the Revenue on the judgment of the Supreme Court in Kesoram Rayon is misplaced. There was no discussion in the said judgment about the recovery of the warehousing charges. The issue involved the liability of the importer in terms of Section 72 of the Act. It was held by the Supreme Court as under: (para 13 pg 471) "13. Goods which are not removed from a warehouse within the permissible period are treated as goods improperly removed from the warehouse. Such improper removal takes place when the goods remain in the ware house beyond the permitted period or its permitted extension. The importer of the goods may be called upon to pay customs duty on them and, necessarily, it would be payable at the rate applicable on the date of their deemed removal from the warehouse, that is, the date on which the permitted period or its permitted extension cam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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