1985 (3) TMI 285 - AT - Customs

Tribunal rules duty not payable on missing goods; appellant advised to seek relief from Government

The Tribunal set aside the demand for duty on goods not warehoused but upheld the demand for duty on goods warehoused but not found during verification ... - Issues Involved:1. Demand for duty on goods warehoused.2. Procedural lapses and bona fides of the appellant.3. Confiscation proceedings under Section 111(f) of the Customs Act.4. Penalty imposition under Section 112 of the Customs Act.5. Demand for duty under Section 72(1)(a) and (d) of the Customs Act.6. Verification of goods and internal documentation.Detailed Analysis:1. Demand for Duty on Goods Warehoused:The appeal was directed against the order of the Additional Collector of Customs, Visakhapatnam, demanding duty of Rs. 14,88,872.71 on goods said to have been warehoused in the bonded warehouse of the appellant. The inspection revealed that certain goods were not in the bonded store-room but in an adjoining room, and some goods were taken out without proper clearance as stipulated under the Customs Act.2. Procedural Lapses and Bona Fides of the Appellant:The Additional Collector noted that the procedural lapses were not mala fide and decided not to cancel the appellant's licence or confiscate the goods. However, he confirmed the demand for payment of duty, rejecting the appellant's plea that internal documents could prove the goods were placed on board fishing trawlers.3. Confiscation Proceedings under Section 111(f) of the Customs Act:The Show Cause Notices issued to the appellant included a proposal for confiscation of dutiable goods attempted to be removed from the warehouse without the permission of the proper officer. The Additional Collector, however, did not proceed with confiscation, considering the procedural lapses not to be mala fide.4. Penalty Imposition under Section 112 of the Customs Act:The Show Cause Notices also proposed a penalty under Section 112 of the Act. The Additional Collector decided not to impose any penalty on the appellant, considering the procedural lapses as bona fide mistakes.5. Demand for Duty under Section 72(1)(a) and (d) of the Customs Act:The demand for duty was justified under Section 72(1)(a) and (d) of the Customs Act. Section 72(1)(a) allows duty to be demanded for goods removed from a warehouse in contravention of Section 71. Section 72(1)(d) allows duty to be demanded for goods not duly accounted for to the satisfaction of the proper officer.6. Verification of Goods and Internal Documentation:The appellant argued that internal documentation showed the goods were placed on board trawlers. The Senior Departmental Representative countered that the documents lacked the skipper's receipt, which was normally available. The Tribunal noted that goods not warehoused could not be treated as 'warehoused goods' for purposes of Section 72, and the demand for duty on such goods was set aside. For goods warehoused but not found during verification, the Tribunal upheld the demand for duty, as the appellant failed to provide prescribed documents proving export.Conclusion:The Tribunal set aside the demand for duty on goods not warehoused, as they could not be treated as 'warehoused goods.' However, it upheld the demand for duty on goods that were warehoused but not found during verification, as the appellant failed to provide necessary documentation. The Tribunal suggested that the appellant might seek relief from the Government of India, considering the goods were likely removed for fitting on fishing trawlers and not consumed domestically.