2026 (3) TMI 49

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....e of rule for and on behalf of the respondent(s). 2. Since a short issue is involved in the present writ petition, the same is taken up for final hearing today. 3. In the present writ petition, the petitioner has assailed the order dated 30.12.2025 passed by the respondent imposing penalty on the petitioner for alleged violation of Warehouse (Custody and Handling of Goods) Regulations, 2016 (for short "Warehouse Regulations"). FACTS: 4. The petitioner is into the business of import, processing of precious metals and has been undertaking imports and has been granted license on 10.06.2016 under Special Warehouse (Bonded Warehouse) under section 58A of the Customs Act, 1962 (for short "the Act"). On 29.01.2018, the petitioner surre....

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....g for the petitioner has submitted that the impugned order is required to be quashed and set aside since the mistaken provisions/regulations are invoked against the petitioner and since the petitioner has been granted Special Warehouse license under section 58A of the Act, the Special Warehouse (Custody and Handling of Goods) Regulations, 2016 (for short "Special Warehouse Regulations") would be applicable in its case. It is submitted that the petitioner has been imposed penalty, after a period of almost 05 years from surrender of its license on 08.03.2019 on the basis of the audit report, which was never supplied to it. Thus, it is urged that the impugned order may be quashed and set aside. 7. Opposing the aforesaid submissions, learned....

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....oner was granted license of Special Warehouse under section 58A of the Act. 11. We may also mention that Special Warehouse Regulations were issued vide notification No. 69/ 2016-Customs (N.T.) dated 14.05.2016 in exercise of the powers conferred under section 157 read with section 58A and sub-section (2) of section 73A of the Act. Thus, the license as well as activities undertaken by the petitioner would be governed by the Special Warehouse Regulations. 12. Instead of undertaking proceedings under the Special Warehouse Regulations, the show-cause notice has been issued by the respondent on 01.02.2024 calling upon the petitioner alleging violation of the provisions of Regulations 11(1) (a), 4(c) and 3(2) of the Warehouse Regulations, 2....

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.... Warehouse Regulations and Special Warehouse Regulations, however, the same ipso facto will not validate the proceedings, premised on the erroneous Regulations. If the intention of the framers of the regulations was to invoke either of the regulations, as canvassed before us, there was no need to issue two separate regulations governing the warehouses. The framers of the regulations were conscious of the fact that in the statutory provisions of Sections 57, 58 and 58A of the Act, different categories of warehouses are prescribed. 14. It is also not in dispute that the respondent has not supplied the audit report dated 16.12.2022 despite the same being asked by the petitioner. The entire proceedings were initiated on the basis of the audi....