Customs duty on warehoused goods cannot rest on destination change alone when the goods reach another bonded warehouse station.

Customs duty could not be demanded merely because warehoused HSD was transferred from one destination to another without intimation, where the goods were in fact received at a declared bonded warehouse station at Port Blair; the demand on the quantity actually received was therefore deleted. The short-received quantity was not separately adjudicated and was remanded to the jurisdictional adjudicating authority for decision in accordance with law.

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Issues: (i) Whether customs duty was demandable merely because the destination of warehoused imported petroleum product was changed from Budge Budge to Port Blair without intimation to the department. (ii) Whether the quantity short received at Port Blair required separate adjudication.

Issue (i): Whether customs duty was demandable merely because the destination of warehoused imported petroleum product was changed from Budge Budge to Port Blair without intimation to the department.

Analysis: The imported HSD had been removed under bond for transfer to another warehouse. The goods were in fact received at Port Blair, which was also a declared bonded warehouse station. The change of destination, by itself, did not justify a customs duty demand on the quantity actually received there.

Conclusion: No customs duty was demandable on the quantity of oil received at Port Blair, and the demand on that count was set aside in favour of the assessee.

Issue (ii): Whether the quantity short received at Port Blair required separate adjudication.

Analysis: The record showed a shortage of 33.97 MT on receipt at Port Blair, and that aspect had not been separately considered by the adjudicating authority.

Conclusion: The short-received quantity was remanded to the jurisdictional adjudicating authority for decision in accordance with law.

Final Conclusion: The duty demand was deleted for the quantity actually received at Port Blair, while the shortage issue was sent back for fresh adjudication.

Ratio Decidendi: Customs duty cannot be demanded merely because the destination of warehoused goods is changed, when the goods are received at another declared bonded warehouse station; any shortage must be separately adjudicated.

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