TaxTMI 
TaxTMI 
TaxTMI 
2008 (12) TMI 206
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....the material imported is covered by the licence, and allowed the appeal holding that as per the "Notification in question (that) the material imported should be covered by DEEC licence which follows that the licence is for the goods and not specifically for the importer alone". Even on the face of it, it appears that the CEGAT lost sight of the actual question to be decided by it. The CEGAT had itself framed it at the beginning of the impugned order i.e., "The question is as to whether the licence which was valid when the goods were under import at the time of shipment can be accepted by the authorities". So the issue was regarding the existence of a valid licence at the time of clearance and not whether the licence is goods-specific or importer-specific. 2. This CMA was therefore admitted on the following question of law : "Whether the Tribunal was correct in law to have held that the validity of the Advance Licence in terms of the date of shipment which exempted the Basic Customs Duty, whereas the Additional Duty payable under the same licence for the same goods is payable as per Section 15(1)(b) of the Customs Act, 1962?" 3. The facts of the case are not disputed. The licence....
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....arges payable in respect of such goods have been paid; and (c) an order for clearance of such goods for home consumption has been made by the proper officer." 7. The following extracts are relevant from Circular No. 12/95 : "... With a view to ensure for implementation of the Duty Exemption Scheme on an all India basis, it is necessary to direct that this practice should be immediately stopped because such situations has affected the Customs House later on to log the DEEC Book keeping in account the various provisions of the various exemption notifications issued under the DEEC Scheme. 2. In this connection, your attention is also invited to Ministry's Circular No. 14/94 dated 1-6-1994 (F. No. 605/139/92-DBK) under which detailed instructions were issued relating to issue of TRAs under the DEEC Scheme. The said instructions envisage that the licence under DEEC Book would be debited by the Customs authorities at the port of registration. The Port of clearance would only be debiting the TRAS received by them after satisfying regarding the admissibility of import goods for duty concession and clearing the import goods and report the particulars of clearance to the port of registra....
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....ions are that the Customs Houses insist on furnishing the following documents by the importer :- (a) Production of advance licence duly registered with the Customs House for the purpose of debiting the same before issue of TRA. (b) Production of DEEC book Part-I for the purpose of verifying details of particulars mentioned in the advance licence for correlation with the DEEC book Part-I. The Customs Houses also insist on details of LUT/bond executed by the exporter with the licencing authority for the licences issued prior to 1-4-1995. In addition, details about bond and Bank Guarantee executed with the Customs House in respect of licences issued on or after 1-4-1995 is also insisted upon for the purpose of making an entry in the DEEC book. (c) A copy of invoice is insisted upon for the purpose of verifying the description, quantity and value of the goods under the Advance Licence and DEEC book. (d) A copy of Bill of Lading/Air Freight Bill is insisted upon to verify that the shipment is covered by the licence. The matter has been examined by the Ministry and it is felt that whereas the documents listed at (a) to (c) are required to be produced to the Customs House before issu....
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....der Paragraph 7.27. It says, "upon endorsement of transferability, a duty free licence shall be valid for the balance period of validity or for a period of six months from the date of endorsement, whichever is later." 11. Several orders of the Tribunal have been produced, which are to the effect that when the Advance Licence was valid at the time of physical arrival of the goods, the exemption cannot be denied on the ground that the said licence was not valid on the date of clearance of goods from warehouse. 12. Now we will look at 1996 (88) E.L.T. 12 (S.C.) [Pratibha Processors v. Union of India]. In this case, the assessee imported under OGL and kept in the warehouse. The Advance Licence under DEEC Scheme was obtained. Bill of Entry for ex-bond clearance was filed and the goods were assessed to "Nil duty". But the authorities sought to recover interest for the period during which the goods were kept in the warehouse beyond the permitted period. The Supreme Court held as follows : "12. On a fair reading of the relevant provisions of the Act and in particular Sections 15, 25, 59, 61 and 68 and the General Exemption granted by the Notification (pages 169-170 of the paper-book) an....
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....nted under Section 61(1) of the Act, and the goods are cleared later, the payment of duty exigible on the goods gets automatically delayed. It is to meet the said contingency Section 61(2) provides that if the goods warehoused are cleared beyond the time specified or granted under Section 61(1) of the Act, interest not exceeding 18% per annum shall be payable on the amount of duty on the warehoused goods. It is implicit from the language of Section 61(2) of the Act that the interest shall be payable on the amount of duty "payable or due" on the warehoused goods for the period from the expiry of period specified or granted till the date of clearance of the goods from the warehouse. In this case, on the date of clearance of the goods, no duty is payable. The goods are not exigible to duty at that time. Calculation of interest is always on the principal amount. The 'interest' payable under Section 61(1) and (2) of the Act is a mere 'accessory' of the principal and if the principal is not recoverable/payable, so is the interest on it. This is a basic principle based on commonsense and also flowing from the language of Section 61(1) and (2) of the Act. The principal amount herein is the....
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....ere is no ambiguity in the expressed intention of the legislature in determining the date for applying the rate of duty, no juristic principle of deemed removal of the goods, can be applied as contended by Mr Sen. Many contingencies may happen in between the filing of bill of entry and actual removal of the goods from the warehouse for which sometimes the importer of goods may himself be responsible, in some cases the responsibility may lie on the customs authorities and there may also be contingencies beyond the control of both the parties. In any case the intention of the legislature being clear, rate of duty is to be applied, as may be in force on the date of actual removal of goods from the warehouse under Section 15(1)(b) of the Customs Act." 14. In 1999 (109) E.L.T. 12 (S.C.) = 1995 Supp (3) S.C.C. 223 [D.C.M. v. Union of India], the Supreme Court held thus: "5. Section 68 provides for clearance of warehoused goods for home consumption by the importer. It says that where an importer warehouses the imported goods, he can clear them for home consumption by filing a bill of entry for home consumption in respect of such goods in the prescribed form and on payment of the import ....
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....ered or the proper officer is satisfied that there was sufficient cause for not delivering it. Granting entry inwards on delivery of import manifest and the date of arrival of the vessel into port admittedly are on March 2, 1989 and the Master of the vessel made a declaration in this behalf that they would discharge the cargo on March 2, 1989 therefore, the relevant date under Section 15(1)(a) is the date on which entry inwards after delivery of import manifest was granted to discharge the cargo for the purpose of the levy of the customs duty and rate of tariff. The contention, therefore that the ship entered Indian territorial waters on February 20, 1989 and was ready to discharge the cargo is not relevant for the purpose of Section 15(1) read with Sections 46 and 31 of the Act. The prior entries regarding presentation of the bill of entry for clearance of the goods on February 27, 1989 and their receipt in the appraising section on February 28, 1989 also are irrelevant. The relevant date to fix the rate of customs duty, therefore, is March 2, 1989. The rate which prevailed as on that date would be the duty to which the goods imported are liable to the impost and the goods would b....
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....nd when the goods were wholly exempt from payment of duty on the date of removal from the warehouse, there can be no liability to pay interest on a non-existing duty. The words used in this case are, "in allowing exemption to imported goods the Government had made it clear that goods imported into India against the Advance Licence includes goods imported under any licence (including Open General Licence) for which at the time of clearance out of Customs control a valid Advance Licence is produced by the importer". Therefore, there cannot be a more clear answer to the question raised in this case. 22. In Circular No. 51 of 1995, it is indicated that TRAs should be issued only after satisfying that the licence in question is valid, it also shows that the Port of Clearance must verify all aspects under the relevant Exemption Notification and the admissibility of the goods "under the Advance Licence produced at the time of clearance". This definitely indicates a live Advance Licence and not a licence which has expired. Circular No. 117 of 1995 says that the Customs House need not verify certain aspects "since all these aspects regarding licence can be verified at the Customs House/Por....