Warehouse procedure for duty-free goods: diversion en route and corroborated evidence sustained penalty liability.

Duty-free goods cleared to an EOU had to be moved under the prescribed warehouse procedure, and the consignor remained responsible for ensuring delivery to the consignee's warehouse. On the evidence of transporter statements, the consignee representative's statement, and surrounding circumstances, the consignments were found not to have reached the factory premises and to have been diverted at intermediary points. The later retraction of one statement was not accepted because it was corroborated by other material, and the contrary precedents cited were treated as inapplicable on their facts. The record also supported knowledge of the diversion, so penalty liability was upheld.

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Issues: Whether the appellant was liable to penalty for clearance of duty-free goods to an EOU where the goods were diverted en route and re-warehousing proof was not duly established.

Analysis: The goods were required to move under the prescribed warehouse procedure, and the consignor remained responsible for ensuring delivery to the consignee's warehouse. The evidence relied upon included transporter statements, the consignee representative's statement, and the surrounding circumstances showing that the consignments did not reach the factory premises but were diverted at intermediary points. The appellant's reliance on contrary decisions was rejected on the basis that those cases did not involve comparable evidence of knowledge or diversion, and the later retraction of one statement was found unpersuasive in view of corroboration from other material. The record also supported the finding that the appellant was aware of the diversion and continued the clearances.

Conclusion: The appellant was liable to penalty, and the penalty was upheld.

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