Customs, Excise and Gold Tribunal - Calcutta
M/S Biecco Lawrie Ltd. vs Cc, Calcutta And Others on 9 August, 2001
Equivalent citations: 2002(79)ECC574, 2000ECR106(TRI.KOLKATA), 2002(139)ELT193(TRI-KOLKATA)
ORDER
Smt. Archana Wadhwa
1. The appellant is a Govt. of India Enterprise under the Ministry of Petroleum and Natural Gas. For the said purpose, the appellant has been permitted by the Govt. of India to carry on parallel marketing business of Superior Kerosene Oil (SKO). The business operation involves importing of SKO from oversees suppliers, storage in terminal tankages and selling to the different dealers/customers.
1.1 The appellant states that SKO on importion is not cleared for home consumption because of the nature of the goods and volume. On importation, SKO is unloaded/transferred from the Vessel to the private Terminal tankages. The said privati tankages located at the different terminals are licenced under the provision of Section 58 of the Customs Act, 1962 (hereinafter to be referred to as the Act) and necessary Bond is executed under Section 59 of the Act.
1.2 As stated heretobefore, because of the nature of the product and its volume, SKO after payment of Customs duties, as assessed on the Bill of Entry for home consumption, continues to be remained in the same tankage as per established practice because of non-availability of storage facility. The appellant reiterates that after payment of customs duties as assessed on the Bill of Entry for home consumption and clearance of the goods for home consumption, clearance of the goods for home consumption is permitted by the proper officer SKO cannot be stored in some other warehouse and remained in the same warehouse where the goods were originally stored. The transaction of SKO is made from the same storage tank. In other words, at the time of sale, duty paid SKO is drawn from the same tankage and supplied to the dealers/customers.
1.3 On 15.5.98 the appellant imported 5873.156 M.T. of SKO and warehoused the same in a private warehouse belonging to M/s. IBP at Budge Budge, being tank No. 1 under WR bill of entry no. 302 (OIL) dt. 19.5.98. At the time of importation, SKO did not attract any basic customs duty and was leviableto only countervailing duty @ 10% ad veloram.
1.4 On 20.5.98 and on 28.5.98, the appellants filed two ex-bond bills of entries for home consumption for a quantity of 5140.00 M.T. and 133.156 M.T. SKO. The said bill of entries filed be the appellant were duly assessed to countervailing duty @ 10% ad veloram, the said duty was paid by the appellants and the customs officers made an endorsement on the reverse of the said bill of entry to the officer in charge of the warehouse, to release the goods in question. Thereafter the officer in charge of the warehouse released the goods and endorsed on the reverse of the said bill of entry to that effect.
1.5 Inasmuch as SKO, by its very nature cannot be taken out from the storage bank to be stored elsewhere, the appellants wrote a letter dt. 28.5.98 to Asstt. Commissioner of Customs (Bond) intimating him that the duties leviable on the goods in question have been paid by them on the basis of the assessment made on the bills of entry for home consumption and the goods have been permitted clearance for home consumption. It was further requested that the nature of the imported goods was such that it could not be cleared from the said tank and stored elsewhere because of non-availability of storage tank outside, the goods after taking clearance for home consumption may be permitted to be stored in the same tank.
1.6 Thereafter the appellant had been clearing the goods from the storage tank, from time to time, on and from 28.5.98 and selling the same to various dealers/customers under the invoices issued by them as regd. dealer under the provision of rule 57 GG of the Central Excise Rules, 1944. The said tank no. 1 where the goods were stored was shown as a godown or a storage place in the appellants' registration application to its jurisdictional central excise officer, which was permitted to be stored there.
1.7 In the Budget of 1998-99, the basic and special customs duty was levied on SKO @ 30% and 2% ad veloram respectively. The customs officers took a view that the quantity stored in the storage tank of IBP and cleared after 2.6.98, w.e.f. which date basic and special customs duty was levied, have to be cleared on payment of such duties in terms of provisions of section 15(1)(b) of the Customs, Act, 1962.
1.8 On the above basis, a show cause notice was issued to the appellants alleging that the appellant had cleared 666 kilo Letres of SKO from the warehouse during the period from 1.6.98 midnight to 6.6.98 without payment of basic customs duty and additional customs duty and as such evaded the payment of duty of Rs. 12,78,116/-.
1.9 The above show cause notice culminated into the impugned order passed by the Commissioner of Customs, Customs House, Calcutta confirming the said demand of duty and also imposing personal penalty of Rs. 5,000/- on the appellant. Commissioner also ordered that the remaining quantity of SKO cleared by paying duty at the enhanced rete was appropriate. The said order of the Commissioner is impugned before us.
2. Shri K.K. Banerjee, ld. adv. appearing for the appellant submits that the issue required to be decided in the present appeal is as to whether the provisions of section 15(1)(b) of the Customs Act applicable to the facts of the instant case, where the goods already stands cleared from the customs charge, though they continue to remain in the warehouse in terms of the provisions of section 49 of the Act. It is the contention of the appellant that the ex-bond bill of entry filed by them was duly assessed by the customs officers and the duty paid accordingly at the rate applicable at the time of assessment. The goods were also permitted clearance by the perper customs officers. He submits that the provisions of section 15(1)(b) of the act are applicable only when the imported goods have been deposited in the warehouse and the customs duty has not been paid. It is in those circumstances that the actual date of removal from the warehouse, as used in section 15(1)(b) of the act becomes relevant. According to the ld. adv. in that situation the goods continue to remain under the control of the customs officers inasmuch as no order of clearance/removal have been made by them.
2.1 Shri Banerjee also submits that section 15(1)(b) lays down the date for determination of the rate of duty of imported goods. The expression 'imported goods' has been defined in section 2(25) of the act to mean any goods brought into India, but does not include goods which have been cleared for home consumption. The goods in the present case have been permitted clearance by the customs officers and out of charge order was passed. Inasmuch as section 2(25) of the act does not contemplate the actual clearance, the goods lying in storage tank clases to be imported goods on account of the factum that the same have been permitted clearance by the proper customs officers.
2.2 Shri Banerjee submits that the imported SKO was being sold by them to different dealers/customers who required modvatable invoices and for which purpose they had obtained a registration certificate as required under rule 174 read with rule 57GG of the Central Excise Rules, 1944. One of the pre-conditions for registration as a dealer was that a dealer must own a proper premises and arrangements for storage facility. Accordingly an application was made to the proper officer in form R-1, specifying the said tank no. 1 as a godown or storage place. The registration certificate was issued by the proper officer of central excise mentioning the said IBP's storage tank at Budge Budge (tank no. 1) as the godown of the regd. dealer. From this Shri Banerjee submits that it is evident that the imported goods were already cleared from the customs control and the said tank was only being used as a storage tank.
2.3 He also submits that an application to use the said tank in terms of section 49 of the Customs Act, 1962 was made to the Asstt. Commissioner. The said section 49 allows storage of the goods in a public warehouse or in a private warehouse, in case the same cannot be cleared within a reasonable time and such goods are not deemed to be warehoused goods for the purposes of the Customs Act.
2.4 Shri Banerjee relies upon the Orissa High Court's decision in the case of Orissa Cement Ltd. V. Suprnt. of Central Excise -1992 (61) ELT 256 and upon the Tribunal's decision in the case of Hindusthan Zinc Ltd. -1990 (49) ELT 419.
3. Countering the arguments Shri A.K. Chattopadhyay, ld. JDR appearing for the Revenue argued that the rate of duty as envisaged by the provisions of section 15(1)(b) of the act has been rightly applied by the adjudicating authority inasmuch as in respect of warehoused goods, the rate of duty prevailing on the actual date of removal of the goods from the warehouse has to be applied. He submits that the above issue is well settled by the various judgements of the Hon'ble Supreme and the various High Courts. In support of his submissions he draws the attention of the Bench to the following decisions:-
(i) 1996 (87) ELT A133 (SC)
(ii) 1999 (113) ELT 1183 (SC)
(iii) 1979 (4) ELT J 241 (SC)
(iv) 1990 (49) ELT 332 (SC) (V) 1996 (86) ELT A 164 (SC)
(vi) 1981 (8) ELT 414 (Bom)
(vii) 1981 (8) ELT 298 (Cal.) 3.1 Shri Chattopadhyay further distinguishes the judgement of the Hon'ble Orissa High Court as relied upon by the ld. adv. by submitting that in the case decided by the Hon'ble Orissa High Court, the imported goods were permitted to be deposited in the warehouse under the provision of section 49 which clearly provides that the goods so deposited shall not be deemed to be warehoused goods. In the instant case the appellants have never been allowed to deposit the goods under section 49.
3.2 Further referring to the Tribunal's decision in the case of Hindusthan Zinc Ltd. relied upon by the ld. adv. for the appellants, Shri Chattopadhyay submits that the Tribunal has categorically observed that any shortfall that may occur on account of removal of goods on a date subsequent to the date of payment of duty will not impinge upon the duty paid against the goods. Accordingly CEGAT had madeit clear in the said order that after the goods are removed from the warehouse on a date subsequent to the date of payment of duty, there may be a shortfall in duty and such further duty is required to be paid. As such he submits that the said decision of the Tribunal relied upon by the ld. adv. does not come to their rescue.
4. We have considered the submissions made from both the sides and have carefully gone through the impugned order passed by the Commissioner. There is no dispute about the fact that where the imported goods are allowed to be warehoused under section 48 of the Customs Act, 1962 and are subsequently cleared from the warehouse, the rate as applicable on the date of actual removal of the goods from the warehouse, is applicable. Even where the warehousing period is expired and the goods continue to be warehoused goods, the rate of duty as applicable on the date of actual clearance has to be applied. This is the ratio of all the decisions relied upon by the ld. JDR. However, the facts in the present case are not at all four corners with the facts of the cases referred to by the ld. JDR. We have carefully gone through the said decisions of the Hon'ble Supreme Court. In all the cases, though the ex-bond bill of entries were filed and they were assessed to duty, the duty was not paid by the importer and the goods were not permitted to be cleared by the customs officers. In the instant case not only the full duty stood paid by the appellants, but the customs officers also permitted clearance of the same as is evident from the endorsement made at the back of the bill of entries. As such the goods cannot be held to be any longer the warehoused goods and the same were allowed to be kept in the warehouse only on account of an application made by the appellants in terms of the provisions of section 49 of the act. It is seen that thereafter the appellants had been clearing the goods from the said storage tank no. 1, as and when required and the said storage tank was also considered to be their godown by their jurisdictional central excise authorities, when they issued them a dealers registration certificate. The above developments makes one thing clear that the said storage tank was not considered as a warehouse from the customs angle, but was being considered as a godown or a storing place by the central excise officers.
4.1 We find that the Tribunal's order in the case of Hindusthan Zinc Ltd. - 1990 (49) ELT 419 (T) covers the appellants' case. It was held in that case that where duty on the warehoused goods is paid and out of charge order for home consumption is made by the proper officer after section 68 is complied with goods, although removed in smaller lots have to be treated as cleared for home consumption. The Tribunal in para 5 of the said decision observed that once the duty on the warehoused goods have been paid and out of charge order for home consumption by the proper officer had been passed, it cannot be said that there was any duty which was outstanding. It was further observed by the Benches in para 6 as under:-
"It is observed that in this section it is enjoined that all the imported goods unloaded in customs area shall remain in the custody of such person as may be approved by the Collector of Customs until they are cleared for home consumption or are warehoused etc.. It is seen that the goods have to remain in the custody of the said approved person till the goods are cleared for home consumption. Obviously, the custodian of the goods is required to hold on the goods till these are cleared for home consumption. The same can be taken to be cleared for home consumption when requirements of section 47 have been complied with and the restraint on the goods is lifted for removal so far as the customs authorities are concerned. The wordings used in section 45 clearly show that the goods are not treated cleared for home consumption till the requirements for the said purpose under section 47 or section 68 are complied with and once these requirements are complied with the goods can be taken have been cleared for home consumption. In this view of the matter, therefore, also it has to be held that once after payment of duty and other charges an out of charge order for clearance of the goods for home consumption by proper officer had been passed after compliance of the provisions of section 68 the goods have to be treated as cleared for home consumption. So far as the applicability of the provisions of section 15 are concerned it may be stated that these provisions are machinery provisions which provide for the relevant date for the payment of duty in the case of the warehoused goods, the duty may be paid on a particular date and once the duty payable with reference to that date has been paid it has to be held that necessary duty for the purpose of clearance of the goods has been paid."
4.2 As such it is seen that when the entire duty required to be paid be the importer has been paid and an out of charge has been passed by the customs, nothing more remains to be paid by the importer. In this view, the question of actual date of removal and the consequent applicability of provision of section 15 (1) (b) becomes irrelevant.
4.3 To the same effect is the decision of the Orissa High Court in the case of Orissa Cement Ltd. Para 12 of the Hon'ble High Court's order is being reproduced below for better appreciation:-
12. The positive assertion of the petitioners in this case is that the goods in question after reaching the port at Paradeep were duty entered by presenting the bill of entry for home consumption under section 46 and the appropriate customs authority cleared the same for home consumption under section 47, much prior to the subsequent notification of the Govt. of India dt. 28th November, 1986, and this assertion of the petitioners has not been denied, inasmuch as no counter-affidavit has been filed. The argument of the ld. Standing Counsel for the Union Govt., however, is based upon the provision contained in section 15 of the Act. Undoubtedly, section 15 (1) (b) stipulates that the rate of duty and tariff valuation in force on the date on which the goods were actually removed from the warehouse. But if the imported goods are for home consumption and the importer of the said goods has made an entry thereof by presenting to the proper officer a bill of entry for home consumption and the proper officer has permitted clearance of the goods for home consumption, and the duty in respect of the same has already been, then storage of such imported goods in any warehouse is because of the fact that the customs authorities of being satisfied that the goods cannot be cleared within a reasonable time have permitted the goods to be stored in a warehouse, whether public or private, as provided under section 49 of the Act. Section 49 clearly indicates that such goods shall not be deemed to be warehoused goods for the purpose of the Act and accordingly the provisions of Chapter IX shall not apply to such goods.
4.3 We find that the facts of the instant case are identical to the facts before the Orissa High Court. As such we are satisfied that the demand of duty against the appellants is not justified and hence not sustainable.
4.4 The appellants have also relied upon to the Tribunal's decision in the case of NGEF Ltd. v. CC.(P) -1998 (27) RLT 700 (CEGAT) laying down that inasmuch as the special customs duty was not leviable at the time of importation of the goods, though levied before clearance for home consumption from the warehouse, the provisions of section 15 (1) (b) are not applicable and the special customs duty was not demandable. We find that the Commissioner in her impugned order has observed that there was basic duty at the time of importation, though the same was exempted by various notifications and the special duty was introduced by 1996-97 Budged and was not a new levy. As against the above the appellants have not placed the factual position on record. Accordingly we refrain from passing any orders on the said issue.
4.5 Inasmuch as the appeal has been allowed on the main submission of the appellant, we set aside the impugned order and allow the appeal with consequential relief to the appellants.
(Pronounced)