1986 (8) TMI 75 - HC - Customs

Court rules in favor of Bajaj Plastic Limited in warehouse facility dispute

The Court ruled in favor of M/s. Bajaj Plastic Limited in a writ petition challenging the withdrawal of the facility to store imported raw material in a ... Warehousing under Customs Act Issues:Challenge to withdrawal of facility to store imported raw material in private bonded warehouse under Customs Act.Analysis:The judgment pertains to a writ petition filed by M/s. Bajaj Plastic Limited challenging the withdrawal of the facility to store imported raw material in a private bonded warehouse within their factory premises. The petitioner's contention was that the withdrawal of this facility was ultra vires of the Customs Act. The Court examined the relevant provisions of the Act, including Sections 57, 58, and 69, which deal with the appointment of public warehouses, licensing of private warehouses, and clearance of goods from warehouses for home consumption or exportation. The Court highlighted the significance of defining terms like 'warehouse' and 'warehousing station' under the Act.The Court noted that the Maharashtra Industrial Development Corporation (M.I.D.C.) area, where the petitioner's factory was located, had been declared as a warehousing station. However, a public warehouse had been established in Nagpur city, which was declared as a separate warehousing station. The Court emphasized that the existence of a public warehouse at one warehousing station should not preclude the grant or renewal of licenses for private warehouses at another station where no public warehouse was appointed. The Court held that the policy decision to withdraw the facility based on the establishment of a public warehouse at a different station was contrary to the spirit of the Act.Referring to a previous judgment by the Madhya Pradesh High Court, the Court reiterated that the licensing authority cannot refuse or cancel a license for a private warehouse at a particular station if no public warehouse exists at that station. The Court emphasized that the discretion to grant licenses should align with the provisions and objectives of the Customs Act. The Court also rejected the argument that the public warehouse in Nagpur city should be considered as serving the M.I.D.C. area, emphasizing the distinct boundaries and definitions of the two areas.The Court quashed the communications withdrawing the facility and directed the respondents to reconsider the petitioner's application for renewal and storage limit expansion in accordance with the Court's interpretation of the Act. The judgment concluded by allowing the petition and making the rule absolute, with no order as to costs.