Customs duty on warehoused goods arises at clearance for home consumption, so a later levy applies if then in force.

For warehoused imported goods, customs duty is attracted on the date they are cleared for home consumption and brought into the mass of goods in India; the earlier import or warehousing date is not the taxable event. Because the goods were cleared after special additional duty had come into force, the levy applied and the duty was correctly charged. A later decision on central excise did not displace the earlier Supreme Court authority governing warehoused imported goods under the customs regime, so the challenge based on that case was rejected and the levy was upheld.

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Issues: (i) Whether special additional duty of customs was leviable on warehoused goods cleared for home consumption after the duty came into force. (ii) Whether the later decision in Polyset Corporation displaced the earlier Supreme Court ruling in Kiran Spinning Mills on the point in issue.

Issue (i): Whether special additional duty of customs was leviable on warehoused goods cleared for home consumption after the duty came into force.

Analysis: For warehoused imported goods, the taxable event occurs when the goods are cleared from the warehouse and brought into the mass of goods in India. The relevant date is the date of clearance, not the date of initial import or warehousing. Since the goods were cleared in January and February 1999, after the levy had already come into force on 1-6-1998, the duty was chargeable.

Conclusion: The duty was correctly levied and the appellants were liable to pay it.

Issue (ii): Whether the later decision in Polyset Corporation displaced the earlier Supreme Court ruling in Kiran Spinning Mills on the point in issue.

Analysis: The later decision was rendered in the context of central excise and did not deal with the same question arising from warehoused imported goods under the customs regime. The direct authority on the issue remained the earlier Supreme Court ruling governing the taxable event for such goods.

Conclusion: The contention based on Polyset Corporation was rejected.

Final Conclusion: The impugned order was upheld and the appeals failed.

Ratio Decidendi: For warehoused imported goods, customs duty is attracted on the date of clearance from the warehouse, and a levy that is in force on that date applies notwithstanding that the goods were imported or warehoused earlier.

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