Warehoused goods exemption turns on the date of warehouse removal, not entry into territorial waters

For warehoused imported goods, the applicable customs duty rate and any exemption depend on the law in force on the date of removal from the warehouse under the Customs Act, 1962. Where an exemption notification is withdrawn before ex-bond clearance, the importer cannot claim the earlier exemption merely because the goods had entered territorial waters while it was still in force. The court therefore upheld the levy of auxiliary customs duty on brass scrap removed after withdrawal of the exemption.

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Issues: Whether brass scrap cleared from warehouse after withdrawal of the exemption notifications was entitled to exemption from auxiliary customs duty on the footing that the goods had entered territorial waters while the notification was in force.

Analysis: The liability to customs duty and the applicable rate depended on the statutory scheme governing warehoused goods, particularly Section 15 of the Customs Act, 1962. The court accepted the respondents' contention that for goods removed from a warehouse, the relevant date is the date of removal from the warehouse and not the date on which the goods crossed the customs barrier or entered territorial waters. The exemption granted under Notification No. 136/82 dated 11.05.1982 had been withdrawn by Notification No. 254/82 dated 16.11.1982 before the goods were removed from the warehouse. The petitioner could not therefore claim the benefit of the withdrawn exemption for the ex-bond clearance.

Conclusion: The petitioner was not entitled to exemption from auxiliary customs duty, and the levy was upheld.

Ratio Decidendi: For warehoused imported goods, the applicable rate of customs duty and the availability of exemption are determined by the law in force on the date of removal from the warehouse under Section 15 of the Customs Act, 1962, not by the date the goods first entered territorial waters.

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