1999 (12) TMI 280 - AT - Customs

Importer's Right to Relinquish Title to Goods After Warehousing Period | Precedent Support | No Home Consumption Order

The judgment affirmed the importer's right to relinquish title to imported goods under Section 23(2) even after the warehousing period expires, as long as ... Remission of duty - Warehoused goods Issues:The judgment deals with the issue of relinquishing title to imported goods after the expiry of the warehousing period and the applicability of Section 23(2) of the Act in such cases.Issue 1: Relinquishment of TitleThe respondent imported polyester yarn and sought to relinquish the title to the goods after the warehousing period expired. The Assistant Collector contended that since the period had lapsed, the goods should be treated as cleared for home consumption. However, the Collector (Appeals) upheld the importer's right to relinquish title citing the Bombay High Court's judgment in Mafatlal Fine Spinning & Manufacturing Co. Ltd. v. Union of India. The department challenged this decision.Issue 2: Applicability of Section 23(2)The department argued that since the importer's request for extending the bond period was denied, the goods should be considered cleared for home consumption after the warehousing period. The judgment distinguishes the facts from the Bombay High Court case, emphasizing that until an order for home consumption is passed, the importer retains the right to relinquish title u/s 23(2).Judgment Summary:The judgment clarifies that the importer's right to relinquish title under Section 23(2) remains even after the warehousing period expires, as long as no order for home consumption is issued. The Court's interpretation in the Mafatlal case supports this view. In the present case, where no order for home consumption was passed despite the expiry of the bond period, the department's claim that the goods were cleared for home consumption is unfounded. The Collector (Appeals) correctly noted that the goods were taken over by the department through auction, indicating the transfer of title. Consequently, the appeal is dismissed, affirming the importer's right to relinquish title under Section 23(2) until a clearance order for home consumption is issued.