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TMI Blog2018 (10) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... ic Notice - In the process, the goods lost their salvage value and later posed health hazard not only to the occupants of the petitioner’s bonded warehouse but also to the persons in the locality near the bonded warehouse. Under these circumstances, by an order of this court on 01.02.2003 the Court allowed destruction. Thus, the goods were never allowed to be cleared even on their abated value. In absence of home clearance of the imported goods into the Domestic Tariff Area, the clamour to appropriate of amount paid towards duty even on the abated value pales out. Remission of duty u/s 23 of CA - Held that:- Respondents ought to have suo motto taken steps to refund the amount as the petitioner became entitled for remission of duty under Section 23 of the Customs Act, 1962, as no duty was payable. Interest also cannot be demanded under the circumstances - Therefore, the amount of ₹ 35,35,220/- paid on 09.11.2017 by the petitioner, is directed to be refunded together with interest to the petitioner within six weeks from the date of this order subject to the petitioner satisfying that there is no unjust enrichment in terms of Section 27 of the Act. Petition are allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed due to the flooding of the water inside the warehouse. 8. The petitioner was asked to apply for remission of duty under Section 23 if the Customs Act, 1982, from the respondents. This request was however rejected by the first respondent by their letter dated 14.11.2006. 9. Under these circumstances, the surveyors by their letter dated 5.12.2006 requested the petitioner to apply for abatement of duty in terms of Section 22 of the Customs Act, 1962. 10. The first respondent by their letter dated 6.1.2007 rejected the request on the ground that the damaged caused to the bonded goods was due to floods caused by rains and therefore cannot be considered as loss on account of the accident and therefore, abatement of duty also could not be considered. 11. On 27.8.2007, the petitioner decided to pay the aforesaid duty. Under these circumstances, the petitioner thereafter paid duty on 27.08.2007 and by letter dated 12.11.2007 and 13.11.2007 requested the respondent for waiver of interest in terms of the relevant police No.10/2008 Board Circular dated 14.02.2006 12.On 26.11.2007, the insurer s surveyor requested the petitioner to obtain an order for release of the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g out a case for waiver of interest and duty when indeed the petitioner has undertaken to pay duty and interest in the event of failure to clear the goods as per the conditions of the bond. 21. The respondents have alluded to section 72 of the Customs act, 1962 which mandates that a proper officer may demand duty if the imported goods which have been bonded are not cleared for export. 22. They further submitted that in terms of sub-clause (d) of sub-section (1) of Section 72 of the Customs act, 1962 for which the aforesaid bond has been executed, the petitioner is liable to pay interest. Hence the demand for interest in terms of the impugned letter dated 18.3.2008 cannot be quashed. 23. As far as the applicability of the Board Circular No.10 of 2006-Cus dated 14.02.2006 it has been stated that waiver of interest is granted on merits of each case. In this case, since duty was payable, interest is also liable to be paid. Under these circumstances the respondents of requested for dismissal of the above petition on merits. 24. Heard the learned Senior Counsel and Additional Advocate General Mr.C.Mani Shankar for the petitioner and Mr.GM Syed Nurullah Sherrif, the learned Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the petitioner and therefore, damage caused by rains cannot be considered as an accident because accident generally happen in a flash and in this case the floods were allowed to swell without taking any to the pre-caution to divert the floodwaters elsewhere. 33. It was concluded that flood water was allowed to swell into the premises though they could have been avoided had there been proper rain water harvesting which was not an option but compulsory for all buildings in the city. 34. By the impugned letter dated 18.3.2008 the petitioner was directed to pay the interest after the first respondent communicated the decision of the second respondent by letter dated 22.01.2008. 35. It may be noted that in terms of Section 49 of the Customs Act, 1962, payment of duty on warehoused is postponed to the date of clearance for home consumption. Thus, unless the goods are cleared for home consumption, no duty is payable. 36. Section 22 allows abatement of duty on damaged or deteriorated goods while Section 23 of the Customs Act,1962 allows remission of duty on lost, destroyed or abandoned goods. The question is whether the petitioner was entitled to abatement of duty under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The owner of any imported goods may, at any time before an order for clearance of the goods for home consumption under Section 47 or an order for permitting the deposit of goods in a warehouse under Section 60 has been made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon. provided that the owner of any such imported goods shall not be allowed to relinquish his title to such goods regarding which an offence appears to have been committed under this Act or any other law for the time being in force. 38. In Indian Oil Corporation vs Collector of Customs 1985(21) ELT (T), the Tribunal referred to note on Clause 23 of the Customs Bill, 1962. It was observed that unlike Section 122(1) of the Sea Customs Act, 1878 under which remission of duty was permissible only if goods were lost or destroyed by unavoidable accident or delay, under Section 23 which replaced the previous section wherein remission of duty may be allowed in all cases where goods are lost or destroyed whatever may be the reasons. 39. The note on Clause 48 of the Finance Bill, 1983 read as follows: Clause 48 seeks to amend Section 23 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, that it is only at this stage that the quantity of the goods imported is to be looked at for the purposes of valuation . 47. The Court further held that customs duty whether at a specific rate or ad valorem is not leviable on goods that are pilfered, lost or destroyed until a bill of entry for home consumption is made or an order to warehouse the goods is made. 48. The Tribunal had earlier held that a demand of duty on transaction value would be leviable in spite of ocean loss . The Court held that it flies in the face of Section 23 of the Customs Act in particular, the general statutory scheme and Rules 4 and 9 of the Customs Valuation Rules. 49. In this case the goods were allowed to be destroyed by an order dated 01.02.2013 of this Court before clearance for home consumption as they were no longer fit for consumption as they posed health hazard to the occupants of the warehouse and to the people near the warehouse. 50. From the facts of the present case, it is clear that the imported goods were damaged after the rain water flooded the petitioner s warehouse. The surveyors report indicates that the goods had residual and salvage value at that time. 51. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to be refunded together with interest to the petitioner within six weeks from the date of this order subject to the petitioner satisfying that there is no unjust enrichment in terms of Section 27 of the Act. 60. There will no necessity for the petitioner to file a formal refund claim. It will suffice, if the petitioner files necessary certificate from a chartered accountant to substantiate the right to get refund of the amount within two weeks from the date of receipt of this order. 61. While scrutinizing and considering the question whether the petitioner is entitled to refund or not or whether the amount has to be credited into the consumer welfare fund, the 1st respondent or any other officer, shall observe the decision of the Hon ble Supreme Court in Unichem Laboratories Ltd., referred to supra and the decision of the Hon ble Supreme Court in Mafatlal Industries referred to supra. 62. Under these circumstances and in view of the above observation W.P.Nos. 10329 and 10330 of 2008 are allowed with consequential relief by way of refund of the amount paid by the petitioner, subject to the petitioner satisfying that there is no unjust enrichment if refund is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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