2003 (1) TMI 120 - HC - Customs

Customs duty remission granted for goods destroyed before clearance. Refund ordered.

MOUNT SHIVALIK BREWERIES LTD. Versus UNION OF INDIA

The Court held that the petitioner was entitled to remission of Customs duty paid on goods destroyed in a fire before clearance from the bonded warehouse. ... Remission of duty Issues involved: Whether the petitioner is entitled to remission of Customs duty paid on goods destroyed in fire before clearance from bonded warehouse.Background: The petitioner imported Brewery Hops in 1975, paid Customs duty, but the goods were destroyed in a fire before clearance from the bonded warehouse.Customs Authorities' Decision: The Assistant Collector and the Appellate Collector rejected the petitioner's claim for duty remission, citing non-compliance with Customs Act sections.Central Government's Decision: The Revision Bench dismissed the revision petition, stating that remission of duty was not admissible due to no total destruction of the goods.Petitioner's Argument: The petitioner argued that since the goods were not cleared for home consumption, Section 23 of the Act applied for duty remission.Respondents' Argument: The respondents contended that once an out of charge certificate was issued, Customs had no jurisdiction over the goods during the fire incident.Court's Interpretation: The Court analyzed Section 23 of the Act, emphasizing the distinction between 'an order for clearance' and 'clearance for home consumption.'Court's Decision: The Court held that until physical delivery to the importer, goods remain in Customs custody, and duty remission applies if goods are lost or destroyed before physical clearance for home consumption.Conclusion: The writ petition was allowed, directing the refund of Customs duty paid by the petitioner, emphasizing the entitlement to remission under Section 23 of the Act.