Warehousing procedure limits duty demand to the dispatching end when consignments are not received at the consignee warehouse.

Under the warehousing procedure in Chapter 7 of the Central Excise Rules, 1944, goods cleared under bond and despatched under AR 3A require a re-warehousing certificate from the consignee. Where consignments are not physically received or are short received, liability lies at the consignor and action must be taken at the dispatching end. As the consignments were admittedly not received at the Bathinda warehouse, the Commissioner in charge of that consignee warehouse could not assume jurisdiction to demand duty, interest, or penalty. The demand was therefore without jurisdiction and could not be sustained.

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Issues: Whether the Commissioner at Ludhiana had jurisdiction to demand duty, interest, and penalty from the Bathinda warehouse in respect of consignments not physically received under the warehousing procedure.

Analysis: The movements were covered by bond and the consignments were despatched under AR 3A without payment of duty. Under the warehousing scheme in Chapter 7 of the Central Excise Rules, 1944, the consignee is required to furnish a re-warehousing certificate showing receipt of goods. Liability in respect of consignments not received or short received falls on the consignor, and action lies at the dispatching end. Since the consignments in question were admittedly not physically received at the Bathinda warehouse, the jurisdiction to demand duty could not be assumed by the Commissioner having charge only over the consignee warehouse.

Conclusion: The demand of duty from the Bathinda warehouse, along with interest and penalty, was without jurisdiction and could not be sustained.

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