Warehoused import duty depends on the law and exemption notification in force on the date of actual clearance.

For warehoused imported raw materials and components, duty liability is determined by the customs law and exemption notification in force on the date of actual removal from the warehouse. The amended exemption notification of 5 June 1987 was treated as applicable to goods lying in bond when the prescribed conditions were satisfied, allowing clearance without payment of customs duty for supplies linked to aided projects. The note also records that the amendment permitted, in appropriate cases, use of the imported materials for other goods or transfer to an actual user, and that the petitioners' entitlement was recognised on clearance of the warehoused goods.

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Issues: Whether the petitioners were entitled to clear the imported raw materials and components without payment of customs duty when equivalent goods had already been supplied from existing stock for the intended manufacture, and whether the amended exemption notification applied to goods lying in bond at the time of clearance.

Analysis: The notification governing duty-free import of raw materials and components for supplies to aided projects was amended on 5 June 1987 to permit, in appropriate cases, use of the imported materials for other goods or their transfer to an actual user. The imported goods remained in a bonded warehouse, and under section 15 of the Customs Act, 1962, the duty applicable to warehoused goods is the duty and tariff valuation in force on the date of actual removal from the warehouse. In view of the amended notification and the petitioners' fulfilment of the prescribed conditions, the Court treated the later notification as governing clearance of the goods and found that the earlier controversy need not be decided.

Conclusion: The petitioners were entitled to clear the goods without payment of customs duty under the amended notification, and the Customs authorities were directed to clear the goods accordingly.

Final Conclusion: The exemption benefit was held available on the date of clearance of the warehoused goods, so the writ petition succeeded to the extent of duty-free clearance.

Ratio Decidendi: For warehoused imported goods, duty liability is determined by the law and exemption notification in force on the date of their actual removal from the warehouse, and an amended exemption notification may govern clearance when its conditions are satisfied.

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