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TMI Blog2024 (9) TMI 1614X X X X Extracts X X X X X X X X Extracts X X X X ..... ers. He pointed out that there was a fire in the warehouse and certain goods were lost. The appellant paid the duty involved in respect of such goods. However a show cause notice was issued seeking to demand interest and penalty in terms of the Warehousing (Custody and Handling of Goods) Regulation 2016. He pointed out that the appellant had voluntarily paid the duty involved in the goods lost while they were being warehoused. 2.1 Learned counsel pointed out that the impugned order is illegally as the same has been passed without any jurisdiction and any authority of law. He pointed out that section 28(1) of Customs Act, 1962 empowers the officers to issue a notice for duty and interest within a period of two years provided the proper offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel argued that word removal or removed has great significance in the context of goods stored in a warehouse. He pointed out that removal of goods in contravention of section 71 is a serious offence under Customs Act, 1962 while the burning of goods due to accident cannot be treated as any offence or deemed removal unless there are specific provisions in law. 2.3 Learned counsel further argued that impugned order has erred in holding that since the title of goods was relinquished by the importer and the application for remission of duty under Section 23 was not allowed as the appellant did not request the competent authority for the said remission. Learned counsel pointed out that there is no relinquishment to the title of the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riots, fire, theft, skillful pilferage and commercial crime, in favour of the President of India, for a sum equivalent to the amount of duty involved on the dutiable goods proposed o be stored in the public warehouse at any point of time; (b) provide an undertaking binding himself to pay any duties, interest, fine and penalties payable in respect of warehoused goods under sub-section (3) of section 73A or under the Warehouse (Custody and Handling of Goods) Regulations, 2016; (c) provide an undertaking indemnifying the Principal Commissioner of Customs or Commissioner of Customs, as the case may be, from any liability arising on account of loss suffered in respect of warehoused goods due to accident, damage, deterioration, destruction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellants towards the Custom duty. He argued that demand of interest and imposition of penalties under Regulation 12 is contrary to law. 3. Learned authorized representative relies on the impugned order. 4. We have considered the rival submissions. We find that the facts are not in dispute. The appellants are a custom warehousing station where goods are stored by importers/ exporter before they are exported or cleared from the bonded warehouse. There was a fire in the warehouse resulting in loss of certain goods. The custom duty amount on the goods lost came to Rs. 2,76,52,609/- which was paid by the appellants. The proceedings in the instant case are for recovery of interest on the said amount amounting to Rs. 93,43,881/-. The cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocedures as warehouse keeper" Section 73 A of the Customs Act, 1962 reads as follows: 73A. Custody and removal of warehoused goods. - "(1) All warehoused goods shall remain in the custody of the person who has been granted a licence under section 57 or section 58 or section 58A until they are cleared for home consumption or are transferred to another warehouse or are exported or removed as otherwise provided under this Act. (2) The responsibilities of the person referred to in sub-section (1) who has custody of the warehoused goods shall be such as may be prescribed. (3) Where any warehoused goods are removed in contravention of section 71, the licensee shall be liable to pay duty, interest, fine and penalties without prejudice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 as in the instant case as there was no illicit physical removal of warehoused goods from the warehouse. 6. The lower authorities have also sought to invoke regulation 4(c) of the Custom Warehousing Regulation, 2016. The said regulation provide for the warehouse keeper to give an undertaking indemnifying the Principal Commissioner of Customs or Commissioner of Customs, as the case may be from any loss arising on account of loss suffered in respect of warehoused goods due to accident, damage, destruction, deterioration or any other unnatural cause during the receipt, delivery, storage despite or handling. It is seen that the said undertaking is to protect the Commissioner of Customs from any liability arising on account of such laws suffer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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