APPLICABILITY OF PENALTY ON WAREHOUSED GOODS

[CS RAHUL AGARWAL]

In case of warehoused goods kept in warehouse for a period longer than permissible (more than 5 years in this case as it is 100% EOU) interest u/s 61 (2) read with NN. 28/2002 is payable for the delay along with duty.

My query is that whether penalty is also payable ? Whereas S. 59 (1) (c) provides for imposing penalty for violation of any provision of the custom act, does not clearance of goods within the permissible time in terms of S. 61(1) even though paying interest u/s 61(2) amounts to Violation of Act ?? I understand that in terms of S. 61 if the importer do not removes the warehoused goods within the permissible / extended time period, such person can remove goods by paying interest on delay period along with duty but there should not be violation of the act as the enabling proviso (2) of S. 61 provides for an option to hold the goods beyond the permissible period without triggering Violation Of Act. Please clarify the exact position.

AI Summary

Penalties on Warehoused Goods: Timely Extension May Avoid Charges Under Sections 59(1)(c) and 61 of Customs Act. A discussion in a forum addressed the applicability of penalties on warehoused goods kept beyond the permissible period, specifically over five years for a 100% Export-Oriented Unit (EOU). The query raised concerns about whether penalties apply if interest and duty are paid, referencing Sections 59(1)(c) and 61 of the Customs Act. A response clarified that if an extension application is not filed before the five-year period expires, penalties may be imposed. However, if an extension is sought timely, penalties might not be necessary. The original poster agreed with this interpretation.