Customs Act, 1962: ss.61, 63, 72 and 150 – Imposition of custom duty – Auction of warehoused goods in case importer/owner of imported goods fails to seek release of such goods – Whether calculation of the custom duty would be assessed as on the date of the deemed removal of goods from the warehouse in terms of s.61 or on the date of sale for the reason that the importer has failed to seek clearance of the goods imported – Held: In view of the Circular issued by the Central Board of Excise & Customs dated 28 th November, 2001, the custom duty is to be calculated on the sale price and not on the duty as is payable on the date of deemed expiration of permitted period of warehouse – Such Circular of the Board is binding on the Revenue – Therefore, the custom duty has to be paid on the basis of sale proceeds realised from the sale of the goods kept in a warehouse and not on the basis of the custom duty payable at the time of filing the Bill of Entry or on the date of expiry of permitted period of warehouse.
Disposing of the appeal, the Court
HELD: 1. *Kesoram is a case where the importer claimed levy of custom duty on goods which remained in bonded warehouse beyond the permitted period claiming that the duty as is applicable on the date the goods were sought to be removed for home consumption, will be chargeable. This Court found that the goods can be kept in a warehouse in terms of the period specified under Section 61 of the Act and, therefore, Section 68 and Section 15(1)(b) apply only when the goods were cleared from the warehouse within the permitted period or with permitted extension and not beyond the permitted period or permitted extension. The present case is not a case of levy of custom duty on the importer. The importer has not sought the release of goods within the permitted period of warehouse. Therefore, the judgment in *Kesoram will not be applicable in respect of the goods to be auctioned on account of failure to seek the release of imported goods by the importer though after the permission from the proper officer. [Para 14-15][867-G-H; 868-A-C] *Kesoram Rayon v. Collector of Customs, Calcutta (1996) 5 SCC 576 : [1996] 5 Suppl. SCR 77 – Held inapplicable.
2. The purpose of Section 63 is to ensure that the warehouse-keeper recovers the rent or warehouse charges from the importer. Section 150 deals with the distribution of sale proceeds if the goods other than the confiscated goods are sold under any provision of the Act. The Central Board of Excise & Customs had issued a clarification on 28 th November, 2001 keeping in view divergence of practice with regard to apportionment of sale proceeds from disposal/sale of unclaimed/uncleared goods under Section 150 of the Act. It was communicated that the custom duty shall be determined by backward calculation considering the sale proceeds of unclaimed/uncleared goods as the cum-duty price. For calculation of duty, total sale proceeds without allowing any deduction towards sales expenses or any other charge is to be taken as cum-duty price. In view of the Circular issued by the Central Board of Excise & Customs, the custom duty is to be calculated on the sale price and not on the duty as is payable on the date of deemed expiration of permitted period of warehouse. Such Circular of the Board is binding on the Revenue. Therefore, the custom duty has to be paid on the basis of sale proceeds realised from the sale of the goods kept in a warehouse and not on the basis of the custom duty payable at the time of filing the Bill of Entry or on the date of expiry of permitted period of warehouse. [Paras 16-18] [868-D-H]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.