Custom, Excise & Service Tax Tribunal
Pradip Port Trust vs Commissioner Of Central Excise Customs ... on 16 February, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No. C/304/06
(Arising out of Order-in-Original No. JC/Hoqrs.-BBSR-I/CUS/04/2005 dated 17.02.2005 passed by the Commissioner of Central Excise & Customs, Bhubaneswar-I
FOR APPROVAL AND SIGNATURE
DR. D.M.MISRA, HONBLE (JUDICIAL) MEMBER
HONBLE SHRI H.K.THAKUR, MEMBER (TECHNICAL)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
Pradip Port Trust
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise Customs & S. Tax, BBSR-I
Respondent (s)
Appearance:
Shri A.K. Jana, Adv. & S.K. Omar Sarif, Adv for the appellant (s) Shri A Kumar, AC (AR) for the Revenue (s) CORAM:
DR. D.M.MISRA, HONBLE (JUDICIAL) MEMBER Honble Shri H.K.Thakur, Member(Technical) Date of Hearing: 16.02.16 Date of Pronouncement:
ORDER No.FO/A/75308/16 Per Shri H.K.Thakur This appeal has been filed by the appellant against OIA No. 17/CUS/BBSR-I/2006 dt 27/7/2006 passed by Commissioner (A) Bhubaneswer upholding OIO No JC/HQRS-BBSR-I/CUS/04/2005 dt 17/02/2005 under which a demand of Rs. 17,41,843/- was confirmed, alongwith interest, and an equivalent penalty was also imposed under Sec 114 A. read with Section- 117 of the Customs Act 1962.
2. Sh. Ashok Kumar Jena (Advocate) & Sh. S.K. Omar Sarif (Advocate) appeared on behalf of the appellant. Sh. A.K Jena argued that M/s MESCO Steel imported 28502.1 MT of LAM Coke of Chinese origin in the month of June 1999 and the same was complete by unloaded on 27/6/1999. That out of total quantity imported 25,506.6 MT was cleared from the docks by M/s MESCO by filing 8 bills of entry on payment of duty. Remaining quality of 3001.5 MT, inclusive of 1.5 MT of excess dischared cargo, was not cleared by the appellant. That on 9/12/99 importer requested AC, Customs to extend time for filing Bill of entry under Sec 48 of the Customs Act 1962. That the request was allowed & four bills of entry were filed & noted for further processing. That importer M/s MESCO Steel did not pay duty of Rs. 17,41,843/- for 1001.5 MT of CAM Coke assessed under Bill of entry 242/Imp/99-00 dt 16/12/99 & BIE No. 243/Imp/99-00 dt 16/12/91 as the same quantity was not available. That importer M/s MESCO vide letter dt 1/4/2000 intimated that the entire quantity pertaining to these bills of entry has been washed away in cyclone and refused to pay duty. That appellant was issued a SCN dt 14/8/2003 under Section 45(3) read with Sec 48 of the Customs Act 1962 demanding duty, interest and for imposing penalty. The show cause notice dt 14/8/2003 was confirmed by the Adjudicating authority & upheld by the first appellate authority.
2.1 Learned Advocate. Appearing on behalf of the appellant strongly argued that a super cyclone hit Pardip Port on 29-30/10/99 and the LAM Coke now not accounted for was washed away. That on 31/1/2000 M/s MESCO surrendered the plat allotted to them in the port area by the appellant. Learned Advocate also made the bench go through Permit No. 99 dt 25/8/99 given to the importer for storage of imported coke. It is appellants case that as per the condition of this permit & the provisions contained in Section 42 & 43 of the Major Port Trust Act 1963, appellant is not responsible for any duty payment for the imported goods whose custody is given to the importer inside the Customs area Appellant requested for filing written submission in two weeks but no such written submission are available on record.
3. Sh. A. Kumar AC (AR) appearing on behalf of the Revenue argued that as per Sec 45 (3) of the Customs Act 1962 custodian is responsible for the goods till the same are cleared on payment of duty by the importer. That for non account al of goods the same have to be treated as pilfered from the custody of the appellant and appropriate duty has been correctly demanded & confirmed by the lower authorities. Learned AR thus strongly defended the order passed by the first appellate authority.
4. Heard both sides & perused the case records. The issue involved in these proceedings is whether duty can be demanded from the appellant for certain quantity of imported LAM coke not accounted for in the Customs area and in the custody of the appellant. The goods after unloading were lying in the port trust area. The observations made by the first appellate authority on the issue are contained in Para. 6 of the OIA dt 8/8/2006 which is reproduced below:-
6. I find that M/S PPT has been interalia declared as a Customs port in terms of clause (a) of Section 7 of Custom Act 62 under notification no. 62/94-Cus(NT)dt. 21.11.94 as amended for unloading of imported goods. M/S PPT has been authorized and appointed as custodian and all imported goods unloaded in port remain their custody till these are cleared for home consumption or are warehoused or transhippeas provided in the law. The PPT having the custodian after taking over the imported goods from the carrier, arrange its proper storage and safety and allow clearance to the importers only after they fulfill all the Customs formalities, pay up requisite duties and other charges/ fees and discharge various other obligations before their goods are allowed entry into the country and the Customs have given permission for clearance out of Custom area. The custodian is required to execute a bond equal to the average duty involved on the goods likely to be stored. Till physical clearance is taken by the importer, the goods remain under the custody of the Port Trust authorities and therefore the importer may not have any control over the said goods. The appellants have stated that in view of the provisions as enumerated under Section 42 & 43 of the Major Port Trust Act 63 and as per the conditions of the licenses granted to M/S MESCO by them the goods stored in open spaces, stack yark, sheds or other places shall remain at the risk of M/S MESCO and therefore they were not responsible for any pilferage. The appellants had otherwise admitted about the pilferage but they claimed that for such pilferage M/S MESCO were responsible. I have gone through the provisions enunciated under Section 42 & 43 of the Major Port Trust Act 63 and it appears to me that by granting the license for allotment of open yard within the Customs bonded area to store the imported goods, the appellants had made a contracts with M/S MESCO in terms of the provisions enunciated under both the said sections. It is nowhere mentioned that the custodian, M/S PPT is only responsible for the goods stored in covered places, and has no responsibility for the goods which are stored in the open. Since the main crux of M/S PPT s argument hinges in this fact it appears that no such distinction of open and closed space exists, and hence this argument is untenable. Thus liability arising out of a contract made between custodian and the importer would have to be derived upon in the light of the contractual stipulations, by themselves and in the light of such contract, the custodian cannot be exonerated from his responsibility under the Customs Act. Sections 23 (1) of the Customs Act 62 excludes from its purview goods pilfered before clearance for home consumption. In this case there was no proof that the imported goods have been lost or destroyed. Section 45 (2) of the Customs Act 62 provides that the person having custody of any imported goods in a Customs area whether under the provisions of sub section (1) or under any law for the time being in force- (a) shall keep a record of such goods and send a copy there of to the proper officer (b) shall not permit such goods to be removed from the Customs area or otherwise dealt with except under and in accordance with the permission in writing of the proper office. In accordance with the progision of section 48 of the Customs Act 62 it was the responsibility of the custodian of the goods to inform the Custom department on monthly basis by sending the list of all imported goods which are lying uncleared / unclaimed for more than 45 days. The Customs department vide letter dt 24.11.99 asked the appellant to furnish the complete information as regards to actual quantity of goods lying inside the port area and position and status of goods. In response to the above letter the appellant expressed their inability to furnish such information. It is also seen that till 16.12.99 i.e the date of filing of bills of entry neither the appellant nor the importer i.e M/S MESCO intimated about loss of cargo for any reason including super cyclone which took place on 28/29 October99 . the bills of entry were filed on 16.12.99 for clearance of entire remaining quantities without stating anything about so called loss or destruction by the importer. Thus the importer was fully satisfied that the entire remaining quantities of 3001.5 MT. were lying in the port area without any destruction or loss in super cyclone. The appellant being custodian of the goods had not established that the imported goods have been lost or destroyed. The importer submitted bills of entry on 16.12.99 for 30001.5 mt. of LAM Coke and these bills of entry were assessed provisionally to duty on 17.12.99. Since the importer was fully satisfied about existence of 30001.5 mt. of LAM Coke in port area as on 16.12.99, he submitted bills of entry for home consumption and thus it appears that the pilferage took place after the order of clearance of the goods was made by the proper officer of Customs, but before the physical clearance of the goods from the port area. 4.1 Sec 45 of the Customs Act 1962 is very relevant, so for as the responsibilities / duties of the custodian of imported goods are concerned and is reproduced below:-
Sec 45. Restrictions on custody and removal of imported goods. - (1) Save as otherwise provided in any law for the time being in force, all imported goods, unloaded in a customs area shall remain in the custody of such person as may be approved by the 1[Commissioner of Customs] unti8l they are cleared for home consumption or are warehoused or are transshipped in accordance with the provisions of Chapter VIII.
(2) The person having custody of any imported goods in a customs area, whether under the provisions if sub-section (1) or under any law for the time being in force,-
(a) Shall keep a record of such goods and send a copy thereof to the proper officer;
(b) Shall not permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer.
(3) Notwithstanding anything contained in any law for the time being in force, if any imported goods are pilfered after unloading thereof in a customs area while in the custody of a person referred to in sub-section (1), that person shall be liable to pay duty on such goods at the rate prevailing on the date of delivery of an import manifest or, as the case may be, an import report to the proper officer under section 30 for the arrival of the conveyance in which the said goods were carried.
5. There is no evidence brought on record by the appellant that any insurance survey was done by any agency or whether any remission of duty under Sec 23 of the Customs Act 1962 was claimed by the appellant. Imported goods lying in the Customs area in the custody of the appellant can only be cleared on payment of duty and can not be handed over to an importer by taking shelter of Sec 42 & 43 of the Major Port Trust Act 1963. The observations made by the first appellate authority that there is no evidence on record that the goods, for which duty has been demanded are lost or destroyed. Accordingly the quantity not accounted for by the custodian has to be treated as pilfered under Sec 23 of the Customs Act 1962 and Custodian is responsible for paying duty on such unaccounted imported goods under Sec 45 (3) of the Customs Act 1962. Accordingly, we find no reason to interfere with the orders passed by the first appellant authority & the same is required to be upheld.
6. In view of the above observations appeal filed by the appellant is dismissed by upholding OIA dt 8/8/2006 passed by the first appellate authority.
(Pronounced in the open court on.)
(D.M.MISRA) (H.K. THAKUR) JUDICIAL MEMBER Member (Technical)
Tushar kumar
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Appeal No.C/304/06