Court Upholds CWC's Right to Pre-Amendment Warehousing Charges Under Section 68 of Customs Act, No Refund for Appellant

The court dismissed the appeal, upholding the validity of the Central Warehousing Corporation's (CWC) demand for warehousing charges up to the date of the amendment to Section 68 of the Customs Act, 1962. The appellant was not entitled to a refund for amounts paid before the amendment. The court recognized CWC's vested right to recover rent for the pre-amendment period and noted that the appellant's acceptance of the order-in-original validated the charges. The decision to grant relief prospectively was not contested by the revenue, and thus, the court did not address that aspect.

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Issues Involved:

1. Legality of warehousing charges/rent demanded by CWC for the period before and after the amendment to Section 68 of the Customs Act, 1962.
2. Retrospective application of the amendment to Section 68 of the Customs Act, 1962.
3. Validity of the demand for warehousing charges by CWC despite the amendment.

Summary:

Issue 1: Legality of Warehousing Charges/Rent by CWC

The appellant filed a writ petition for the return of Rs. 13,04,464/- paid as warehousing charges/rent, insurance, and GST, arguing these were illegally collected. The learned single bench noted that under the pre-amended Section 68, rent was payable for warehoused goods, but this provision was deleted effective 14.05.2016 by the Finance Act, 2016. The court held that CWC was justified in demanding rent for the period before the amendment and the appellant was entitled to a refund for the period after the amendment.

Issue 2: Retrospective Application of the Amendment

The appellant contended that the amendment to Section 68 should be applied retrospectively, arguing that the substitution of the provision means the old rule ceases to exist and the new rule takes its place from the time the original section was enacted. The appellant argued that the amendment did not take away any substantive right nor imposed any penal consequences, thus should be retrospective.

Issue 3: Validity of Demand for Warehousing Charges by CWC

The court held that the appellant, having accepted the order-in-original and paid the demanded amounts, cannot claim a waiver of warehousing charges. The appellant's guilt in diverting goods meant for export justified the detention and warehousing charges. The court noted that the vested right of CWC to demand rent, existing before the amendment, was valid. The learned single bench's decision to grant relief prospectively was not contested by the revenue, and thus the court refrained from expressing an opinion on that aspect.

Conclusion:

The appeal was dismissed, affirming that CWC's demand for warehousing charges up to the date of the amendment was valid and the amount paid by the appellant need not be refunded. The court emphasized that the appellant's acceptance of the order-in-original and the vested right of CWC to recover rent justified the charges demanded for the period before the amendment.

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