TaxTMI 
TaxTMI 
2024 (7) TMI 203
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....aving breached obligations as licensee of warehouse under Customs Act, 1962. Two appeals are before us with the first impugning order [order-in-original no. 291/2024-25/COMMR/NS-I/Bond/JNCH dated 26th March 2024] of Commissioner of Customs (NS-I), JNCH, Nhava Sheva concerning licence dated 11th August 2021 under section 58 of Customs Act, 1962 to operate a private warehouse comprising eight tanks. The other impugned order [order-in-original no. 16/2024-25/COMMR/NS-I/Bond/JNCH dated 16th April 2024] of Commissioner of Customs (NS-I), JNCH, Nhava Sheva concerning licence of December 2021 issued under section 57 of Customs Act, 1962 for operation of public warehouse with two bonded tanks. Operators of such licences were required to be in compliance with Warehouse (Custody and Handling of Goods) Regulations, 2016 issued under authority conferred by section 157 of Customs Act, 1962, read with section 57, section 58 and section 73A of Customs Act, 1962, on Central Board of Excise and Customs (CBEC). As the range of issues relating to handling of specific consignments and to breach of conditions specified in the respective licences are, by and large, similar, both the appeals were sought ....
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....fferent circumstances and obligation devolving thereon. Not unnaturally, consequences of non-observance and breach thereof are also statutorily provided thus '117. Penalties for contravention, etc., not expressly mentioned Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it is his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to penalty not exceeding one lakh rupees.' which the impugned order has liberally applied to each breach so found and held as offending. Of particular relevance, in the context of the impugned proceedings, is the Warehouse (Custody and Handling of Goods) Regulations, 2016 stipulating obligations, procedures and observances and, more importantly, providing access to the penal empowerment supra with '12. Penalty. - If a licensee contravenes any of the provisions of these regulations, or abets such contravention or fails to comply with any of the provision of these regulations, he shall be liable to a penalty in accordance with the provisions of the Act.' therein with which....
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....on of the empowerment afforded under section 58B of Customs Act, 1962. Learned Authorized Representative submitted that breach of the regulatory environment in which a licensee was required to carry out its responsibility elicited during inspection of the facility had led to proceedings prescribed under chapter IX of Customs Act, 1962 and, therefore, suspension was in accordance with law. 6. Section 58B of Customs Act, 1962 empowers Principal Commissioner of Customs / Commissioner of Customs to cancel the license granted to public warehouse under section 57 of Customs Act, 1962, to private warehouse under section 58 of Customs Act, 1962 and to special warehouses section 58A of Customs Act, 1962 subject to licensee being afforded opportunity to be heard before such cancellation. The same provision enables suspension of warehouse licence by Principal Commissioner of Customs/Commissioner of Customs during the pendency of enquiry. Such vesting of power to suspend is not out of the ordinary and it has been held judicially that suspension, in all sorts of circumstances, is not a penalty; not unnaturally, suspension may, in circumstances, be warranted where immediate disbarment pending....
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....ncord with the power vested in Principal Commissioner of Customs/Commissioner of Customs. The act of Commissioner of Customs in bundling suspension with other action that has been taken against the licensee and goods is beyond the scope of law and, consequently, continuation of suspension beyond the date of impugned order merits setting aside. 8. In the two proceedings, separate episodes of unauthorized storage have been elaborated upon as cause for confiscation of goods with consequent redemption fine in lieu thereof as well as imposition of penalty under section 112 of Customs Act, 1962. Insofar as the private warehouse is concerned, storage of goods imported vide bill of entry no. 7434419/10.02.2022 in non-bonded tank and of imports effected by M/s Tata International, M/s DIL Exim, M/s Madhuri Refinery Oil, M/s Golden Agri Resources and M/s Athena Trade, vide bill of entry no. 4909035/04.03.2023, bill of entry no. 3757125/15.12.2022, bill of entry no. 6791640/22.12.2021, bill of entry no. 9380221/23.12.2023 and bill of entry no. 4095753/09.01.2023, in tanks of the private warehouse were set out as ground for the goods to be held liable for confiscation under section 111(j) of....
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....red the breach to be viewed in proper perspective as malafide has not been set out in the impugned order. It also bemuses that a Commissioner of Customs, while ready and willing to consider storage for three days in a non-bonded tank as demonstration of all that is wrong in this world, has failed to ascertain cause for delay in approval on the part of the competent authority in disposing off the application for inclusion in the licence; the severity of premature deployment of tank for storage of dutiable goods in circumstances of denial of inclusion is nowhere near one of delay in discharge of responsibility of public office. In the light of any lack of evidence of intention to breach the law, the exigency of liquid cargo awaiting discharge from vessel and no prejudice to interest of the exchequer having been established, recourse to confiscation of the goods is unwarrantedly harsh and disproportionate. The impugned order has resorted to section 111(j) for confiscation of the goods. We have doubts about the applicability of this provision inasmuch as goods not having been deposited in a warehouse could not be alleged to have been removed contrary to permission and, further, it is n....
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....ction 111(h) of Customs Act, 1962 for having been stored in the public warehouse which, according to the Commissioner of Customs, is in violation of section 33, section 60 and section 71 of Customs Act, 1962. In connection with the five bills of entry for consignments alleged to have been incorrectly stored in the private warehouse, we have found that the provisions of section 33 of Customs Act, 1962 would not apply. As far as section 60 and section 71 of Customs Act, 1962, for deposit of goods, permitted to be removed from customs station, in a warehouse is concerned, no distinction is drawn between public warehouse and private warehouse. While the storage of third party goods in a private warehouse may be irregular, there is certainly no bar on the storage of goods belonging to any person, even to licensee of private warehouse licence, in a public warehouse. The Commissioner of Customs appears to have ignored this fundamental premise in considering the said storage to be irregular. There is no justification whatsoever for invoking section 111(h) as well as imposition of penalty thereof under section 112 of Customs Act, 1962. Accordingly, detrimentation of fine and penalties are s....