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of <h1>Challenge of Customs Duty on Damaged Gherkins Export - Tribunal Rules in Favor</h1> <h3>KOELEMAN INDIA PVT. LTD. Versus COMMISSIONER OF CUSTOMS, BANGALORE</h3> The appeal challenged the demand of duty under Section 72 of the Customs Act on processed 'GHERKINS' damaged during transportation for export. The ... Demand - Improper removal from warehouse Issues involved: The appeal challenges the demand of duty under Section 72 of the Customs Act on processed 'GHERKINS' that got damaged during transportation from a factory to the port of exportation.Details of the Judgment:Issue 1: Demand of Customs DutyThe appellants, a 100% E.O.U. manufacturing 'GHERKINS' for export, faced a demand for duty under Section 72 of the Customs Act due to damage during transportation. The appellants contested the demand, arguing that Section 72 does not apply to goods manufactured in India and that none of the situations specified in Section 72 had occurred in this case. The appellants maintained that the goods were properly accounted for as the accident occurred after the export order was given. The Revenue reiterated the points made in the Order-in-Original and the Order-in-Appeal.Issue 2: Interpretation of Section 72The Tribunal analyzed Section 72 of the Customs Act, which pertains to goods improperly removed from a warehouse. It noted that Section 72(1)(d) applies to goods in respect of which a bond has been executed and not cleared for home consumption or exportation, and are not duly accounted for to the satisfaction of the proper officer. The Tribunal observed that this section is applicable to imported and warehoused goods, whereas in this case, the goods were manufactured in a 100% E.O.U. out of imported goods. Therefore, Section 72 did not directly apply to the finished goods in question. Since the goods were damaged after the export order was issued and there was no diversion for home consumption, the demand for duty was deemed unsustainable. Consequently, the appeal was allowed with consequential relief.(Separate Judgment by Judge)No separate judgment was delivered by the judges in this case.This judgment by the Appellate Tribunal CESTAT, Bangalore, clarified the application of Section 72 of the Customs Act to goods damaged during transportation for export, ultimately ruling in favor of the appellants due to the specific circumstances of the case.
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