TaxTMI 
TaxTMI 
2018 (10) TMI 1334
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....ithout payment of duty for the purpose of export/sales exclusively from its duty free shop under Section 58 of the Customs Act, 1962. 3. Duty concession has been extended to "Duty Free Shops" in terms of the policy and relevant circulars of the Government, as such sales result in inflow of foreign exchange into the country. 4. The imported goods for such sales are permitted to be stored in their private custom bonded warehouse at Guindy and are dispatched to the dutyfree shop which is the point of sale to replenish the stock for such sales at the duty free shop in the airport. 5. Both storage at the custom bonded warehouses and at the point of sale at the duty-free shop are duty-free. Only, if the imported consignments are otherwise cleared into the Domestic Tariff Area (DTA) from the warehouse, they are liable to customs duty. 6. On 3.12.2005, torrential rain flooded the city of Chennai as a result of which the petitioner's custom bonded warehouse at Guindy, Chennai was inundated with flood water resulting in loss to the goods stored therein. Notices were given to the respondent and the insurer immediately by the petitioner. 7. By an interim report dated 20.2.200....
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.... goods or his employee. 16. According to the 1st respondent, the petitioner was guilty of negligence, therefore the demand for duty and interest thereon is not contrary to Section 22 (1) (c) of the Customs Act, 1962. 17. They further contended that demand for interest is justified in the light of the decision of the Honourable Supreme Court in Prathiba Processors versus Union of India 1996 (88) ELT 12 and the decision of the Supreme Court in Jayanthi T Krishna and Co. 2000 (119) ELT 4. 18. It has been further contended that in terms of the license obtained for the warehouse under Section 58 of the Customs Act, 1962, the petitioner has executed a bond binding themselves under section 59 and has agreed to observe all the provisions of the Act and the Rules and Regulations in respect of such goods and to for duty and interest on imported goods. Since the imported goods were not cleared for the purpose for which the permission was allowed, the petitioner was not only liable to pay duty but also interest thereon. 19. Thus, according to the respondents, the petitioner was liable to pay the aforesaid duty of Rs. 35,35,220/- and also interest thereon. 20. It is further conte....
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....between the insurance company and the petitioner have been referred to. 29. It was under these circumstances on 16.9.2006, the petitioner requested for remission of duty on account of natural calamity viz., flood resulting in loss of the imported goods in the warehouse. 30. The first respondent by letter dated 14.11.2006 simply informed the petitioner that the request for remission of duty cannot be considered under the customs rules. Thereafter, the petitioner sent on its letter to the respondent on 16.11.2006, 24.11.2006 and on 5.12.2006 for abatement of duty. 31. By letter dated 6.1.2007 bearing reference F.No.S.Nisc. 19/2004 (AIR-Bonds), the petitioner was informed that Section 22 of the Customs Act, 1962 allows abatement of duty in case of imported goods have been damaged before clearance for home consumption on account of any accident not due to any wilful act, negligence or default of the owner or his employer or agent. 32. It was further clarified by the 1st respondent that in this case, the goods have been damaged due to floods caused by the rains on 3.12.2005. Flooding according to the 1st respondent inside the premises were created due to poor maintenance ....
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....oportion to the duty chargeable on the goods before the damage or deterioration which the value of the damaged or deteriorated good bears to the value of the goods before the damage or deterioration. (3) For the purpose of this Section, the value of damaged or deteriorated goods may be ascertained by either of the following methods at the option of the owner:- (a) the value of such goods may be ascertained by the proper officer, or (b) such goods may be sold by the proper officer by public auction or by tender, or with the consent of the owner in any other manner, and the gross sale proceeds shall be deemed to be the value of such goods. Remission of duty on lost destroyed or abandoned goods:- (1) Without prejudice to the provisions of Section 13, where it is shown to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs that any imported goods have been lost otherwise than as a result of pilferage or destroyed, at any time before clearance for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall remit the duty on such goods. (2) The owner of any imported goods may, at any time before....
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....e satisfaction of the Assistant Collector that the goods had been damaged and that such damage was not on account of wilful act, negligence or default of the owner, his employees or agent. Once an importer makes a report of damage to his goods to the Customs, sub-section (1) of section 22 requires that the damaged goods "shall" chargeable to duty in accordance with the provisions of sub-section (2). 45. It is thus clear as follows: (a) "Wilful act, negligence or default of the owner, his employees or agent" is an exception for grant of abatement to damaged or deteriorated goods under Section 22 of the Act . (b) Pilferage of goods is an exception for granting remission of duty on goods lost or destroyed before clearance for home consumption within http://www.judis.nic.in the purview of 46. Recently, the Hon'ble Supreme Court in Mangalore Refinery & Petrochemicals Ltd. v. Commissioner 2015 (323) E.L.T. 433 (S.C.). held that "Where goods which are imported are lost, pilfered or destroyed, no import duty is leviable thereon until they are out of customs and come into the hands of the importer. It is clear therefore, that it is only at this stage that th....
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....ties functioning under the Act must, as are in duty bound, protect the interest of the Revenue by levying and collecting the duty in accordance with law-no less and also no more - It is no part of their duty to deprive any assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue .They must act reasonably and fairly". 57. In absence of home clearance of the imported goods into the Domestic Tariff Area, the clamour to appropriate of amount paid towards duty even on the abated value pales out. If the respondents had acted fairly, the revenue would have been entitled to appropriate the duty on abated value. However, by their conduct allowed the goods to be destroyed and thereby exempting the petitioner from payment of duty. 58. Respondents ought to have suo motto taken steps to refund the amount as the petitioner became entitled for remission of duty under Section 23 of the Customs Act, 1962, as no duty was payable. Interest also cannot be demanded under the circumstances. 59. Therefore, the amount of Rs. 35,35,220/- paid on 09.11.2017 by the petitioner, is directed to be refunded together with interest to the pe....