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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 ..... nclude destruction of goods by way of fire or any other reason. There is no provision in the act or regulations to treat such destruction/ loss on account of fire, is deemed removal. In these circumstances, it is opined that no liability to pay duty or interest would arise under Section 71/73A of the Customs Act, 1962 as in the instant case as there was no illicit physical removal of warehoused goods from the warehouse. 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 suffered in respect of warehoused goods - In the instant case, the Commissioner has not shown any liability arising on account of such goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the limitation period of two years under Section 28(1) of the said Act. He further argued that in terms of Section 28(1), the notice can only be issued to the person chargeable with duty or interest. He argued that the appellant is not the importer and therefore, he cannot be held to be the person chargeable with duty or interest as provided under Section 28(1) of the Customs Act. Learned counsel further argued that section 73(A) is not applicable to the instant case. He pointed out that only when warehoused goods are removed in contravention of Section 71 the licensee becomes liable to pay duty interest, fine and penalties. He pointed out that in the instant case, the warehoused goods were not removed at all but were lost in fire and therefore, section 73(A) cannot be invoked to impose any duty, interest, fine or penalty. He pointed out that Revenue has failed to give any evidence that the goods were removed from the warehouse in contravention of section 71 of the Act. 2.2 Learned counsel further argued that the impugned order wrongly invokes deeming provision by treating the goods lost in fire as deemed removal. Learned counsel argued that word removal or removed has great signi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or any other unnatural cause during their receipt, delivery, storage, despatch or handling; and (d) appoint a person who has sufficient experience in warehousing operations and customs procedures as warehouse keeper Learned counsel argued that the impugned order has misinterpreted the provisions of regulation 4(c) in the present case. He pointed out that they had submitted undertaking as per conditions of the regulation to indemnify the Commissioner against any liability arising on account of loss suffered in respect of warehoused goods due to accident, damage, deterioration, destruction or any other natural cause. Learned counsel pointed out that no such liability arisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or any other unnatural cause during their receipt, delivery, storage, despatch or handling; and (d) appoint a person who has sufficient experience in warehousing operations and customs procedures 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such laws suffered in respect of warehoused goods. In the instant case, the Commissioner has not shown any liability arising on account of such goods. There is no liability of customs duty or interest on the Commissioner of Customs and therefore invocation of clause (c) of Regulation 4 is not warranted in the facts of the case. The impugned order also invokes clause (b) of Regulation 4 of the said regulations. It is seen that the said clause also invokes section 73 A of the Customs Act. As can be seen from above discussion section 73A applies only when the goods are physically removed from the warehouse improperly. Any loss arising on account of fire or any other natural cause cannot be treated as removal in terms of Section 73A and therefore, the provisions of clause (b) of Regulation 4 are also not applicable to the instant case. From the above discussion, it is apparent that provisions of Section 73A cannot be invoked to recover duty or interest or impose penalty in case where there is loss on account of fire within a bonded warehouse. The impugned order therefore cannot be sustained and is set aside. The appeal is consequently allowed. ( Order pronounced in the open court o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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