Re-warehousing certificate non-production cannot sustain customs duty demand when imported goods were abandoned and auctioned.

Customs duty and interest could not be demanded merely because a re-warehousing certificate was not produced where the imported goods were not the contracted goods, were found unfit for use, and were abandoned after the importer promptly informed the department and followed the applicable discrepancy procedure. The goods were later seized in police proceedings and auctioned by order of the jurisdictional Magistrate, making re-warehousing impossible. In these circumstances, with the goods no longer available for warehousing and the importer having acted in line with departmental directions, the demand was held unsustainable and was set aside.

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Issues: Whether customs duty and interest could be demanded on imported goods where the goods received were different from the goods ordered, were found unfit for use, were abandoned by the importer, and were subsequently seized and auctioned, so that the importer could not produce a re-warehousing certificate.

Analysis: The imported goods were not the contracted goods but a different consignment found on examination to be unfit for use in the appellant's manufacture. The appellant promptly informed the Department, sought guidance, and acted in accordance with the departmental directions and the circular procedure applicable to discrepancy in imported goods. The goods were also seized in police proceedings and later auctioned by order of the jurisdictional Magistrate, making compliance with the re-warehousing condition impossible. In these circumstances, once the appellant had abandoned the goods and the goods were no longer available for warehousing, duty could not be fastened merely for non-production of a re-warehousing certificate.

Conclusion: The demand of customs duty and interest was unsustainable and was set aside; the appeal was allowed.

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