AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 671
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing illegal sales of foreign made foreign liquor imported duty-free, a search operation was conducted at the special bonded warehouse and sales outlet at the duty-free shop where certain discrepancies were noticed from the stock of foreign made foreign liquor in the Special Warehouse; hence an offence case was registered by the Commissionerate of Customs (Preventive), Cochin. Further enquiries brought out the following discrepancies. (i) Operating duty-free shop without possessing a Special Warehouse licenced premises. (ii) Sale of duty-free goods directly from the duty-free shop without warehousing the same in the Special Warehouse. (iii) Transferring a special warehouse licenced premises without the knowledge of the Department. 2.1 Based on detailed investigations and from the statements of various persons, notice dated 13.08.2018 was issued for violation of various conditions of the Special Warehouse licence and on adjudication the Commissioner in the impugned order cancelled the Special Warehouse Licence No. 01/2017-18 dated 31.08.2017 issued to the appellant in terms of Section 58B (1) of the Customs Act, 1962. 3. The learned counsel submits that the Airport Authority ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s that once a Duty-Free Shop (DFS) is allotted by the Airport Authority of India (AAI) based on a global tender, appellants are entitled to a special warehouse and the customs department supervises the entire operation of movement of goods into the warehouse, keeping warehouse under its lock and movement of goods from warehouse to DFS. Based on the Hon'ble High Court's directions, appellant represented to the Chief Commissioner/Commissioner of Customs for permitting them to continue their operations in terms of the licence granted to the premises measuring 35.89 sq.mtrs. and to validate the licence dated 31.08.2017 by incorporating 154 Sq.mtrs. space. This application was rejected by way of communication by the Assistant Commissioner vide his letter dated 28.06.2019. Later, a show-cause notice dated 13.08.2018 was issued and the Commissioner vide impugned order No.93/2022 dated 05.04.2022 cancelled the Special Warehouse Licence No. 1/2017-18 dated 31.08.2017. Hence this appeal. 3.3 The learned counsel also relied upon the following decisions: * Union of India vs. Paras Laminates (P) Ltd.: 1990 (8) TMI 140 - SC * Commissioner of Income Tax, Madras vs. Mahalakshmi Textiles Mills....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2 suspended the Special Warehouse Licence No.1/2017-18 dated 31.08.2017 issued to the appellant pending enquiry. A writ was filed against this order by the appellant and the same was disposed by the Hon'ble High Court of Ernakulam vide order dated 21.12.2018 observing as follows: "103. But the question is, could the Department have done without suspending the licence? Possessing power does not justify using it always. Possessing is a matter of statute, but its use is a matter of discretion. And that discretion must be animated by reason and justification. The investigation, it seems, began in December 2017, and licence suspension took place in April 2018. Besides a bald assertion, that the Company officials have been uncooperative, I fail to see any other major compelling reason for the authorities to suspend the licence. And that allegation of non-cooperation remains unconvincing, for the record presents a different picture. 104. Besides that, the Airport Authority of India laments the loss of revenue; it asserts that the licence suspension, interim though, is entirely avoidable; it could have been done without. It cites numerous complaints from the international passengers ab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ucted by the 1st respondent can be permitted only if they possess a licenced special warehouse, coming within the purview of Section 58A. Ext.P5 (special warehouse licence No.01/2017-189 dated 31.08.2017) is the licence issued by the Competent authority to the 1st respondent under Section 58A for establishment of a special warehouse within the premises of the new international Airport at Thiruvananthapuram, for the purpose of storage of goods to be supplied at the duty free shops conducted by them in the terminals. The licence contains the terms and conditions specified there in and it is mentioned that it will remain valid until cancelled in terms of Section 58B read with the relevant regulations. In Ext.P5, the details of the special warehouse are shown as follows: "Location Space; measuring 35.89 sq. mtr (non A/C area) adjacent to Restaurant cum staff canteen (under the flyover) at International Terminal Building, Trivandrum Airport." Ext.P5 licence was issued on 31.08.2017. 7. It is conceded by both sides that the premises of the special warehouse licenced under Ext.P5 is not occupied by the 1st respondent at present, because the said space was surrendered to the Airport ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er. It is 'Sine qua non' that supply to the duty-free shops can be made only from a licenced special warehouse. So, the question is as to whether the 1st respondent is in possession of a licenced special warehouse under Ext.P5. From the relevant provisions it is cleared that the special warehouse is licenced only on a specified premise. So, the subject matter of such licence is the permission to establish a special warehouse at a particular premise. It cannot be accepted the contention that, any change in the premises will not invalidate the licence. Unless specific licence is issued with respect to the new premise or necessary changes are effected in the existing licence with respect to the shifting of the premise, we cannot hold that the licence continues to be valid and that the 1st respondent is entitled to continue business on the basis of Ext.P5 licence. 9. Since the 1st respondent is not legally entitled to carry on the business in the duty-free shop, without a properly licenced special warehouse, allowing such business to be carried on based on the direction contained in the impugned judgment, will definitely result in breach of the statutory provisions and in turn will b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ter, the appellant filed a writ appeal with the High Court of Kerala and the Hon'ble High Court of Kerala vide Order dated 23.06.2022 observed that: "6. by preserving all the rights available to the 1st respondent against the order dated 05.04.2022 and granting liberty to the 1st respondent to work out the remedies in accordance with law within a week from today and in the interregnum the order dated 05.04.2022 is kept in abeyance the writ appeal stands in dispose of". "11. All the questions and consequences that may arise or answered, pursuant to any of the steps taken in this behalf, are matters for adjudication before the Tribunal or the Court. They are to be independently considered on their own merit, uninfluenced by the impugned judgment. This court has not examined or expressed a view on any of the issues or merit in this behalf". Hence, the appeal before us against the Commissioner's order No. 93/2022 dated 05.04.2022. In the impugned order the Commissioner alleged the following violations: i. Operating duty-free shop without possessing a Special Warehouse licenced premises and transferring a special warehouse licenced premises without the knowledge of the Departme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....registers, it shows the closing balance of the items in the warehouse behind the Airport Canteen". Therefore, as rightly observed by the Hon'ble High court of Kerala in its order dated 18.03.2019 supra "It is evident from Ext.P13 (representation dated 28.12.2017) series documents that, the officers of the customs department at various level had issued certificates required for transport and deposit of beverages to be supplied to the duty-free shops, as if there existed a licenced bonded warehouse (Special warehouse)". 5.5 Thus, as observed by the Commissioner in the impugned order since the new premises was allotted within 15 days of the original allocation the appellant started operating only from the new premises but without getting the Licence amended. But the fact remains that the goods were stored and removed from the new premises under the Customs supervision. Therefore, the appellant cannot be alleged with any illegality in as much as there is no evidence to prove that goods were not stored or removed without the customs supervision. 5.6 With regard to the fact that the receipt and movement of goods from the new premises was done under the supervision and knowledge of th....