Re-warehousing certificate failure and diversion of goods can fasten prima facie duty liability on the consignor and justify extended limitation.

Where goods cleared under a CT-3 or similar export-oriented re-warehousing procedure are not shown to have reached the consignee and no re-warehousing certificate is produced, duty can be fastened prima facie on the consignor. On the facts noted, the Tribunal treated admission of diversion, denial of receipt by the consignee, absence of transport documents, and lack of re-warehousing certificate as sufficient to establish prima facie diversion to the domestic market. Those same circumstances supported invocation of the extended limitation period because suppression and misdeclaration suggested an intention to evade duty. Full waiver of pre-deposit was declined; conditional stay was granted only on partial deposit.

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Issues: (i) whether, in the absence of the re-warehousing certificate, the duty liability for goods cleared under CT-3 certificate lay on the consignor and whether the diversion of goods to the domestic market had been established; (ii) whether the demand was barred by limitation; and (iii) whether the applicants had made out a case for waiver of pre-deposit.

Issue (i): whether, in the absence of the re-warehousing certificate, the duty liability for goods cleared under CT-3 certificate lay on the consignor and whether the diversion of goods to the domestic market had been established.

Analysis: The goods covered by the four invoices were found not to have reached the intended consignee. The record showed admission of diversion, denial of receipt by the consignee, absence of transport documents, and no re-warehousing certificate. In such a situation, the settled view applied that where goods cleared under the relevant export-oriented procedure are not re-warehoused, duty liability rests with the consignor. The diversion of the goods in the guise of clearance to another unit was therefore treated as established for the limited purpose of the stay application.

Conclusion: The issue was answered against the applicants and in favour of Revenue.

Issue (ii): whether the demand was barred by limitation.

Analysis: The diversion of duty-free goods, suppression of the actual movement of goods, and misdeclaration of clearances were treated as established prima facie. These circumstances indicated an intention to evade duty by fraudulent means, justifying invocation of the extended period.

Conclusion: The demand was held not to be barred by limitation.

Issue (iii): whether the applicants had made out a case for waiver of pre-deposit.

Analysis: In view of the strong prima facie case in favour of the Revenue and considering the financial hardship pleaded, the Tribunal directed partial pre-deposit of the disputed duties and dispensed with pre-deposit of the balance and the penalties on compliance within the stipulated time.

Conclusion: Full waiver of pre-deposit was declined and conditional stay was granted on partial deposit.

Final Conclusion: The order is an interim stay disposition that upholds a prima facie duty demand, rejects the limitation challenge, and grants protection from recovery only upon partial deposit.

Ratio Decidendi: Where goods cleared under export-oriented re-warehousing procedure are not shown to have reached the consignee and no re-warehousing certificate is produced, a prima facie duty liability can be fastened on the consignor and the extended period may be invoked when diversion and suppression are established.

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