Warehouse clearance duty follows the removal date, making differential customs notices based on import date unsustainable.

For goods cleared from a bonded warehouse, the applicable customs duty is determined by the date of actual removal from the warehouse under Section 15(1)(b) of the Customs Act, read with the warehousing provisions. Show cause notices demanding differential duty on the basis of the higher rate prevailing on the date of import proceeded on a mistaken legal premise, because the goods had been removed after the duty-reducing notification and duty had been collected accordingly. The notices were therefore without jurisdiction and were quashed.

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Issues: Whether the show cause notices demanding differential customs duty on goods cleared from bond warehouse were jurisdiction where the duty was assessed by reference to the date of actual removal from the warehouse rather than the date of import.

Analysis: For goods cleared from a warehouse, the relevant date for determining the applicable rate of duty is the date of actual removal from the warehouse under Section 15(1)(b) of the Customs Act, 1962 read with the warehousing provisions. The notices proceeded on the assumption that the higher rate prevailing on the date of import controlled liability, although the goods had been cleared after the notification reducing duty and duty had been collected accordingly. The notices therefore rested on a mistaken legal premise and could not be sustained.

Conclusion: The show cause notices were without jurisdiction and were quashed, in favour of the petitioner.

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