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TMI Blog1987 (1) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... agar Road and that of petitioner No. 2 at Fatehpura crossing, Nathdwara Road, at Udaipur, which have been declared as warehousing stations. The licences granted to the petitioners since March, 1978 had been renewed upto 1983. The petitioner applied for renewal of their licences for the year 1984. In the mean time, by order, dated 14.11.83, the Assistant Collector, Central Excise Division, Udaipur has appointed a public warehouse at Shreeji Industries, Pratap Nagar, Udaipur and on this ground in December, 1983, show cause notices have been issued to the petitioners as to why their licences may not be cancelled. Thereafter, without taking into consideration their replies, licence of petitioner No. 1 has been refused to be renewed and that of petitioner No. 2 has been renewed with the condition that no fresh arrivals be stored in the bonded warehouse. 3. The case of the petitioners is that the licences granted to them for private bonded warehouses cannot be cancelled or their renewal refused only on the ground that the public warehouses have now been constructed by the Warehousing Corporation of India. They have prayed for issue of a writ, direction or order directing the non-petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds may be deposited without payment of duty. Then, comes Section 58 providing for licensing of private warehouses. It reads as under:- "58. Licensing of private warehouses:- (1) At any warehousing station, the Assistant Collector of Customs may license private warehouses wherein dutiable goods imported by or on behalf of the licencee, or any other imported goods in respect of which facilities for deposit in a public warehouse are not available, may be deposited without payment of duty. (2) The Assistant Collector of Customs may cancel a licence granted under sub-section (1) - (a) by giving one month's notice in writing to the licensee; or (b) if the licensee has contravened any provision of this Act or the rules or regulations or committed breach of any of the conditions of the licence: Provided that before any licence is cancelled under Clause (b), the licensee shall be given a reasonable opportunity of being heard. (3) Pending an enquiry whether a licence granted under sub-section (1) should be cancelled under Clause (b) of sub-section (2), the Assistant Collector of Customs may suspend the licence." 5. Chapter VIII of the Act provides that importer of any dutiable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be exercised merely on the coming into existence of public warehouses at the warehousing station and the application for renewal will have to be considered on its merits, e.g. comparative facilities etc. 8. The Gujarat High Court observed :- "13. In those petitions where the private bonded warehouses are located, as they should, in the places declared to be warehousing stations where there are no public warehouses, the action of the authorities can be easily declared to be unauthorised when they call upon the petitioners of those petitions to stop the use of their private bonded warehouses for the above mentioned purposes and to have recourse to the public warehouses situated in some other place notified as another warehousing station where a public warehouse is appointed subsequently. We see no difficulty in quashing the orders of the authorities in this regard and even a bare look at the provisions of Section 9, 57 58 of the Act would show that the action of the authorities in cancelling those licences or refusing to renew those licences or refusing to issue space certificates during the pendency of the licence period are actions without authority of law. Declaration of a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facility for deposit in a bonded warehouse of imported goods without payment of duty. If this facility in that warehousing station is not available, the declaration of that place as a warehousing station becomes absolutely meaningless. At any rate it would defeat the object of that Act. 15. There had arisen a similar situation before the Madhya Pradesh High Court in the case of the Asbestos Cement Limited and anr. v. the Union of India and others : 1983 E.L.T. P. 883 (M.P.). The Division Bench consisting of the Chief Justice Mr. G.P. Singh and Justice B.C. Verma, speaking through the Chief Justice has dealt with the question very elaborately and we would conclude this question by referring to certain observations from paragraph 6 of the said reported judgment : ".... The availability of these facilities on a proper construction of Section 58, must be considered with reference to the particular warehousing station for which the application is made to licence a private warehouse. If an application for licensing a private warehouse can be rejected under Section 58 on the- consideration that facilities for deposit in a public warehouse at any warehousing station are available, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uts public warehouses are available." 10. Their Lordships then took into consideration the guidelines issued by the Board and observed :- "We, therefore, hold that it was not within the competence of the Board, if at all it intended so to do to lay down an unflexible and rigid direction that wherever a public warehouse is appointed, no private licence in a particular geographical area, shall be renewed or granted." 11. After further interpreting Section 58, they observed :- "We have already made it clear that every case is to be decided on its own merits in the light of all attending circumstances and while dealing with such applications the sine qua non in the availability of a facility to deposit goods without payment of duty. If that could be reasonably extended to an industry, then it will be within the province of the concerned authority not to grant or renew a licence to a private warehouse and we have also held that this being a question arising more on objective facts where an applicant for a licence for private warehouse can have many things to say, such a decision is not to be arrived at ex parte without affording an opportunity of some say to the applicant for su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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