TaxTMI 
TaxTMI 
2020 (2) TMI 705
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....ermitted by the Custom Department to be kept in warehouse for one year in terms of Section 59 of the Customs Act, 1962 - for short, 'Act' at ICD, Faridabad. The Bond period expired on 28th February, 2002 but the importer did not clear the imported goods and also did not pay the rent for the warehouse. The warehouse issued notices for the recovery of its dues failing which it will be constrained to sell the imported goods by public auction/tender sale. With the approval of custom authorities, the imported goods were put for sale through auction under Section 63(2) of the Act with a valuation of imported goods at Rs. 1,52,04,176/-. However, the goods could not be successfully sold. The valuation was reduced for the second auction held on 4th September, 2002 to Rs. 1,36,83,759/- and further reduced in the third auction held on 7th May, 2003 to Rs. 54,44,650/-. The highest bid of Rs. 35 lakhs alone was received. The auction was not confirmed. 3. Thereafter, tender sale was resorted to dispose of the goods in the warehouse. The valuation of the imported goods in the warehouse was fixed at Rs. 33 lakhs for which tenders were invited upto 3rd December, 2003. Later, the valuation was red....
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....nt of customs duty as computed by it." 6. The argument of the learned counsel for the Revenue is that the distribution of sale proceeds has to be in accordance with Section 150 of the Act as there is a specific provision concerning custom duty charges which will have precedence over recovery of warehouse charges under 150(2)(e) of the Act. 7. Before this Court, learned counsel for the appellants relied upon the judgment of this Court in Kesoram. This Court considered Section 15(1)(d) of the Act that if the goods which are not removed from a warehouse within the permissible period (in terms of Section 61) are treated as goods improperly removed from the warehouse. Such improper removal takes place when the goods remain in the warehouse beyond the permitted period or its permitted extension. The importer of the goods may be called upon to pay customs duty at the rate applicable on the date of their deemed removal from the warehouse. This Court held as under: "13. Goods which are not removed from a warehouse within the permissible period are treated as goods improperly removed from the warehouse. Such improper removal takes place when the goods remain in the warehouse beyond th....
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.... after notice to the owner of the warehoused goods and with the permission of the proper officer cause to be sold (any transfer of the warehoused goods notwithstanding) such sufficient portion of the goods as the warehouse-keeper may select. xx xx xx Section 71. Goods not to be taken out of warehouse except as provided by this Act. - No warehoused goods shall be taken out of a warehouse except on clearance for home consumption or export or for removal to another warehouse, or as otherwise provided by this Act. xx xx xx Section 150. Procedure for sale of goods and application of sale proceeds. - (1) Where any goods not being confiscated goods are to be sold under any provisions of this Act, they shall, after notice to the owner thereof, be sold by public auction or by tender or with the consent of the owner in any other manner. (2) The proceeds of any such sale shall be applied - (a) firstly to the payment of the expenses of the sale, (b) next to the payment of the freight and other charges, if any, payable in respect of the goods sold, to the carrier, if notice of such charges has been given to the person having custody of the goods, (c) next to the payment ....
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....ise and Customs. The Circular reads as under: "A reference was received from the Container Corporation of India (CONCOR) stating that there is a divergence of practice in Custom Houses with regard to apportionment of sale proceeds from disposal/sale of unclaimed/uncleared goods under section 150 of the Customs Act, 1962. It was reported that some Custom Houses determine the Customs duty payable on auctioned goods after deducting the sales expenses from the sale proceeds of the goods whereas other Custom Houses are determining duty on the basis of sale proceeds without allowing any deduction. 2. The matter has been examined. It is clarified that - (a) the Customs duty shall be determined by backward calculation considering the sale proceeds of unclaimed/un-cleared goods as the cum-duty price. For calculation of duty, total sale proceeds without allowing any deduction towards sales expenses or any other charge is to be taken as cum duty price. (b) After determination of the Customs duty, sale proceeds of unclaimed/uncleared goods is to be appropriated in the manner as provided in section 150(2) of the Customs Act, 1962. 3. These instructions may be brought to the notic....
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....16. Section 63 of the Act compels the owner of the warehoused goods to pay rent and warehouse charges at the rates fixed under any law for the time being in force or at such rates as may be fixed by the Commissioner of Customs. If the rent or warehouse charges are not paid, the warehouse-keeper is competent to sell the goods or such sufficient portion of the goods as the warehouse-keeper may select after permission from the proper officer. Section 63, thus, is to ensure that the warehouse-keeper recovers the rent or warehouse charges from the importer. 17. Section 150 deals with the distribution of sale proceeds if the goods other than the confiscated goods are sold under any provision of the Act. The Central Board of Excise & Customs had issued a clarification on 28th November, 2001 keeping in view divergence of practice with regard to apportionment of sale proceeds from disposal/sale of unclaimed/uncleared goods under Section 150 of the Act. It was communicated that the custom duty shall be determined by backward calculation considering the sale proceeds of unclaimed/uncleared goods as the cum-duty price. For calculation of duty, total sale proceeds without allowing any deducti....