9911796707
TMI Blog1994 (10) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness of manufacturing of tin containers under the name and style of Tin Manufacturing Company of India, having its factory at Mohan Nagar in the district of Ghaziabad. The petitioner manufactures tin containers from Tin Plates Waste/ Waste (hereinafter referred to as TPWW). The containers are manufactured from MS plates but the MS sheets are of very inferior quality in comparison to TPWW. The petitioner is registered with the D.G.T. D as an industrial undertaking manufacturing metal containers and agricultural implements. In the manufacture of metal containers generally tin plates Taste/Waste are used as raw materials and for agricultural implements MS plates or MS sheets (defective) are used for the same. 3.The petitioner placed an order for import of 500 metric tons of tin plates waste of Maxican origin on M/s. MILL Exports Inc.. Perrine Avenue, New Jersey 08638 U.S.A., through their local contact M/s. M.S. Puri and Company, New Delhi. The price for tin plates etc. was agreed to be paid @ 270/- U.S. Dollar per metric ton F.O.B. Maxican Port. An L/C bearing No. M-1-835/27, dated 13-3-1987 was opened with Bank of Maharashtra, New Delhi in favour of the suppliers. It was agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed unless `no objection' is obtained from Group A.C." Later on the goods were warehoused at the Mohan Nagar warehouse, Ghaziabad (Annexure 4A to the petition). 5.By its letter dated 1-12-1987, the petitioner requested the Asstt. Collector to allow him ex-bonding of the goods after reassessing them as petitioner required them for home consumption. The goods were not released (Annexure-5 to the petition) On 5-12-1987, the petitioner approached the Collector Customs requesting him to release the goods on provisional assessment or convert the bill as goods for home consumption in view of the pendency of the dispute and bonding to be taken under Section 49 of the Customs Act, 1962 (Annexure 6 to the petition). But the Collector Customs ordered on 29-12-1987 that the goods be confiscated under Section 111(m) of the Customs Act, 1962 and gave an option to the petitioner under Section 125 of the Act to redeem the goods on payment of redemption fine of Rs. 10 lacs. A penalty of Rs. 1 lakh was also imposed on the petitioner under Section 112 of the Act. (Annexure-7 to the petition). The petitioner informed the Collector that it intended to file appeal as per its letter dated 3-1-1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -bonding of the goods on payment of duty (Annexure 13 to the writ petition). Again on 9-4-1990, the petitioner reiterated its same request (Annexure 14 to the petition). 8.The respondents by the letter dated 9-11-1990 informed the petitioner that it had to pay the duty according to present rate of duty under Section 15(b) of the Act. It was also directed to file ex-bond Bills of Entry, failing which action under Section 72(2) would be initiated against it. (Annexure 15 to the petition). The petitioner challenged the directions contained in the letter dated 9-4-1990 (Annexure 15) by Writ Petition No. 580 of 1990 before this Court. The recovery proceedings were stayed as per amended order dated 23-5-1990 (Annexure 16 to the petition). 9.The petitioner approached the Warehousing Corporation to release the goods whereupon, the Manager Warehouse, Sahibabad, Ghaziabad has issued a letter dated 22-5-1990 calling upon the petitioner to pay Rs. 4,11,612.50 paisa as warehousing charges, on payment of which, the goods would be released (Annexure 17 to the petition). 10.The petitioner has urged that the goods imported by it were never taken out of the customs area. They remained througho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r always in favour of Asstt. Collector, Customs as the ownership of the goods goes to the importer only on payment of customs duty and warehousing charges in full and all these points are very clearly mentioned in the warrant issued in favour of the petitioner for the consignment deposited by them. The goods as such were deposited by the petitioner only and not by the customs authorities vide the letters of request filed (CA 1 and CA 2). The petitioner did not approach the Warehousing Corporation with proper documents i.e. green Bill of Entry duly discharged by Asstt. Collector, Customs inasmuch as the petitioner approached the Warehousing Manager, vide its letter dated 18-5-1990 (Annexure-CA 3). The customs authorities have clearly mentioned in their letter dated 2-7-1990 that at no point of time the goods were confiscated by them (Annexure-CA 5). The petitioner had pledged the goods with the Bank of Maharashtra obviously claiming ownership of the goods (Annexure-CA 6). It is incorrect to say that the goods were not warehoused by the petitioner and Section 63 of the Act is accordingly not attracted. As the goods were deposited by the petitioner, he is liable to pay all the warehou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vit, it has also been alleged that the petitioner applied for release of the goods, which had been detained by the customs authorities. It was required to fill up the proforma but the customs authorities decided to detain the goods and did not release them. The goods were warehoused under the orders of the Asstt. Collector. It is wrong to say that the warrant for warehousing was filled by the petitioner and the goods were deposited by the petitioner and not by the customs authorities. As the goods were confiscated by the respondents, the title in them did not pass to the petitioner hence deposit in the warehouse could not be termed as one done by the petitioner. Unless the green bills are cleared by the Asstt. Collector, they could not be produced before the Manager, Central Warehousing Corporation by the petitioner. But soon after the dispute raised by the customs authorities was settled, the petitioner approached the Asstt. Collector and Warehousing Corporation for delivery of goods to it. 17.Since the goods were not released by the customs authorities due to dispute about the customs duty, the Asstt. Collector Customs himself deposited the goods. It was clearly mentioned in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble; but such goods shall not be deemed to be warehoused goods for the purposes of this Act, and accordingly the provisions of Chapter IX shall not apply to such goods." 22.The said section casts a liability on the parties, namely, on the importer to make an application which should be done without any loss of valuable time. Then the Assistant Collector, Customs, was bound to record his satisfaction that the goods cannot be cleared within a reasonable time hence the goods may, pending clearance, be permitted to be stored in a public warehouse ....." This is a statutory duty which has not been carried out by the Assistant Collector despite initial application dated 5-12-1987 and with a request again on 3-1-1988 to do the needful. However, the goods were kept in a warehouse initially at Bombay, later on shifted to Ghaziabad, and the proceedings went on. The petitioner was under a reasonable belief that its application u/s 49 must have been allowed as it has not been rejected so far. It proceeded with its right to file an appeal and get favourable orders on its claims. The aforesaid section confers a right on the importer that such goods shall not be deemed to be warehoused for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detention of goods, vide Annexure-1 to the Supplementary Affidavit of Shri R.R. Goel. So it appears that throughout the petitioner has been harassed initially but it has got justice from higher authorities. 26.In a desperate bid in his counter-affidavit filed by Shri U.C. Sharma dated 11-7-1990 in paragraph 9 it has been averred by the respondents that the customs authorities have clearly mentioned in their letter dated 2-7-1990 that at no point of time the goods were confiscated by them. In support of this averment C.A. 5 has been filed, which is clearly wrong on facts as mentioned above. The goods were confiscated by the Collector and later on they were released by the Board. We have already mentioned the documents which may be repeated, vide Annexures 7 and 10 to the writ petition. So on facts the respondents have given a wrong affidavit. 27.There is another complication created by the supplementary counter-affidavit filed by Shri V.K. Dikshit, Manager of the Central Warehousing Corporation, Surajapur district Ghaziabad on 3rd September 1990. In paragraph 3 of the said affidavit there is a mention of statement showing the datewise details of storage charges paid by the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a bond to be effective it must be accepted in writing. As per records it has not been done so far. But we refrain from giving a categorical finding on this point as we think that this matter also needs a threadbare analysis at the hands of the Asstt. Collector. However, it is made clear that unless at all the statutory requirements of Sec. 59 are complete, it will not be safe to say that the goods had been "warehoused" by the petitioner because Section 60 of the Act provides as under :- When the provisions of Section 59 or 59A have been complied"60. with in respect of any goods, the proper officer may make an order permitting the deposit of the goods in a warehouse." Therefore, here also some statutory obligations have to be discharged by the Asstt. Collector. Some of them are :- To ensure that all the formalities required under Section 59(i) or 59-A of the Act have been complied with : he should make an order (necessarily in writing) permitting(ii) the deposit of the goods in a warehouse. On the record there is no such evidence that the Asstt. Collector has examined as to whether both these conditions had been fulfilled and as to whether he had passed an order in writi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et result of the above discussion comes to this. That the petition succeeds and is allowed. The demand notice (Annexure-17 to the writ Petition) dated 22-5-1990 is quashed. As the goods have already been delivered to the petitioners under the orders of this Court on furnishing bank guarantee, there is no necessity to pass any order on prayer No. 2 to the writ petition. The Bank guarantee shall continue to operate till disposal of the case. The matter is remanded to the Assistant Collector, Customs, respondent No. 2 to decide the questions involve in this case afresh in the light of the observations contained in the body of the judgment. The learned Asstt. Collector shall first pass an order on the application under Section 49 dated 3-1-1988 (Annexure-9 to the petition). Thereafter he shall decide other matters involved in this case. 35.A copy of this judgment shall be produced before the Asstt. Collector, Customs, within a period of one month from today. He shall give adequate and reasonable opportunity of hearing to the parties, including right to file evidence. Thereafter he shall proceed to decide the matter afresh in accordance with law and in the light of the directions co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay in lieu of such confiscation a fine of Rs. 10,00,000/- and clear the goods, penalty of Rs. 1,00,000/- was also imposed under Section 112 of the Act. The learned counsel further urged that the order of confiscation was no doubt set aside by the Central Excise Gold (Control) Appellate Tribunal and the matter was remitted back for fresh adjudication and ultimately the show cause notice as also the adjudication proceedings were dropped as "there was neither the intent nor the knowledge either for misdeclaration in the description of the goods or for their undervaluation." But still the petitioner cannot be said to be the owner of the goods during the period the order of confiscation was in force and therefore, it was not liable to pay to the warehouse keeper any rent or warehouse charges for the period it was not the owner of the warehoused goods. Shri Tewari urged that the warehousing of the goods in the warehouse in question was not the warehousing for the purpose of Section 63 instead it was a warehousing within the meaning of Section 49 of the Act. According to the learned counsel for the petitioner. Section 63 of the Act is attracted only where the goods are proved to have be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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