Tribunal rules duty cannot be imposed on warehouse for goods not manufactured. Order demanding duties set aside.

The tribunal held that duty cannot be imposed on the appellant, a bonded warehouse, as they were not the manufacturer or producer of the goods in question. The impugned order demanding duties on shortages and excesses found during an audit was deemed unsustainable and set aside. The appellant's appeal was allowed, providing for consequential relief if necessary.

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Issues:
Demand of duties on shortages and excesses found during investigation.

Analysis:
The appellant, a bonded warehouse with a company, faced a demand for duties on shortages and excesses discovered during an audit. The appellant paid duties upon clearance of goods from refineries and stored them in the warehouse. Shortages and excesses were adjusted daily from the stock, leading to a show cause notice for duty demand covering December 1994 to March 1999. The matter underwent adjudication twice, with the demands being confirmed both times. The appellant contended that being a public sector undertaking, the demands were unsustainable due to the extended period of limitation, citing a relevant tribunal case. Additionally, the appellant argued that as they were not the manufacturer or producer of the goods, duty should be demanded from the refineries, relying on a Supreme Court case precedent.

The appellant's counsel emphasized that duty should be demanded from the manufacturers or producers of goods, not from the appellant who is a registered dealer and not involved in clandestine procurement without duty payment. Following this principle, the tribunal held that duty cannot be imposed on the appellant since they were not the manufacturer or producer of the goods. Therefore, the impugned order demanding duties from the appellant was deemed unsustainable and set aside, with the appeal allowed and providing for consequential relief if necessary.

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