Customs duty on bonded goods follows the exemption position on clearance date, making additional duty payable after withdrawal.

Imported goods cleared from a bonded warehouse after withdrawal of an exemption were held liable to additional customs duty because the duty position was determined by the law prevailing on the date of clearance, not merely the date of importation. The goods had been imported while the exemption operated, but by the time they were removed from bond the exemption had ceased, and customs duty became payable on clearance. The challenge therefore failed, and the impugned orders sustaining the levy were upheld.

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Issues: Whether additional duty of customs was chargeable on goods imported while exempt from such duty but cleared from bond after the exemption was withdrawn.

Analysis: The dispute concerned drug intermediates imported before the withdrawal of exemption and removed from a bonded warehouse afterwards. The governing principle applied was that where customs duty liability survives, the duty position is determined with reference to the date of clearance from the warehouse, and not merely the date of importation. Since the goods were not exempt from basic customs duty and the exemption from additional duty had ceased by the time of clearance, the duty became payable when the goods were removed from the warehouse.

Conclusion: Additional duty was rightly levied, and the challenge by the assessee failed.

Final Conclusion: The impugned orders were sustained, and the appeals stood dismissed.

Ratio Decidendi: Where imported goods are cleared from a bonded warehouse after withdrawal of the exemption, customs duty liability is governed by the law and exemption position prevailing on the date of clearance.

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