TaxTMI 
TaxTMI 
2005 (9) TMI 186
X X X X Extracts X X X X
X X X X Extracts X X X X
....of Rs. 1.2 crores, confirming a demand of customs duty of Rs. 11,67,62,735/- under Section 28(2) and ordering appropriation of Rs. 5,83,81,368/- paid on 31-3-2004, ordering recovery of interest under Section 28AB and imposing penalty of amount equal to duty confirmed and imposing a further penalty of Rs. 1 crore on the appellant in its capacity as the custodian of the imported goods, in terms of Section 112(a)(ii) of the Customs Act, 1962. 2. The goods have been confiscated on the ground that they were removed from the customs area without the permission of the proper officer; duty @ 10% has been confirmed, rejecting the appellants' request for coverage under the EPCG licences obtained by them on 27-11-2000 for the goods imported under the two bills of entry in question, under which they would have been entitled to clear the goods on payment of duty @ 5%, penalty of amount equal to duty has been imposed holding that the provisions of Section 114A are attracted against the importer for the reason that duty was short levied by reason of collusion or wilful misstatement or suppression of facts and therefore the person who is liable to pay duty or interest, as the case may be, as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom the customs area or otherwise dealt with except under and in accordance with the permission in writing of the proper officer. It is significant to note that this section talks about removal of imported goods (emphasis supplied). Under Section 46, an importer of any goods, other than those intended for transit or transhipment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form and as per Section 47, where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty assessed thereon, the proper officer may make an order permitting clearance of the goods for home consumption. 6. The expression "have not been cleared from Customs" has to be interpreted for the purpose of grant of the benefit of clearance under EPCG scheme. Proceeding to examine the same, we find that - (a) The Customs Act, 1962 uses the words "clearance/cleared" and "Removal/removed" at various places. While the expression "Removal/Removed" would encompass all shifting of goods or transfer of situs of the imported goods, after landing, the word cle....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e levy. (d) Custody of imported goods vests with the Port Trust or the Custodian so appointed by the Commissioner of Customs, under Section 45 of the Customs Act, 1962. Physical shifting of the goods, out of the Customs Area, will not necessarily mean that the goods have been 'cleared from Customs'. The Custodian, as Bailee of the goods, has rights & duties even after die goods are cleared from Customs on payment of duty but not physically taken over by the importer & shifted. As a Bailee, the Custodian is expected to keep the imported goods safe and secure before & after payment of duty. 7. Section 47 relates to clearance of imported goods (emphasis supplied). In the absence of an order by the proper officer permitting clearance of the goods in question for home consumption and in the absence of payment of duty thereon, the goods cannot be said to have been 'cleared from customs' even though they have been physically removed from the customs area. Goods can be reassessed to duty until an order for clearance of goods is passed under Section 47, even de hors provisions of Section 17(4), in the light of the Tribunal's order in Birla Jute Mfg. Co. Ltd. v. CC - 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mporters represents the correct duty payable and accordingly set aside the duty liability confirmed in excess of Rs. 5,83,81,368/-. 8. The contention of the appellants that the provisions of Section 28 under which the demand has been confirmed are not applicable to the facts of the case in view of our finding hereinabove that till date no order permitting clearance for home consumption under Section 47 of the Customs Act, 1962 has been passed by the proper officer and Section 28 applies only when duty has been short levied or non-levied pursuant to an order of assessment and since no order of clearance has been made till date, no short levy or non-levy of duty can arise for recovery in terms of Section 28 also has substance, and merits acceptance. The decisions of the Tribunal in HCL HP Ltd. v. CC - 1999 (112) E.L.T. 604 and Tata Infotech Ltd v. CC - 2000 (117) E.L.T. 252 relied upon by the Commissioner to hold that duty demand is sustainable under Section 28 when the date of duty payable and the removal is known, are distinguishable from the facts of the present case as in both those cases, an order permitting clearance of goods for home consumption was passed by the proper offic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....empted to be used by the importer. Since the Department has not raised any dispute about the explanation of the appellant that the goods were removed from the Customs area due to shortage of space at the jetty and to prevent damage to the goods, it is reasonable to hold that the goods have remained with the custodian, albeit, outside the Customs area. (a) This leads to the next question as to whether such an act was a violation of Section 45(2) of the Customs Act. This Section of the Customs Act deals with restrictions on custody and removal of imported goods and provides that all imported goods unloaded in a Customs area shall remain in the custody of such person as may be approved by the Commissioner of Customs until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII. Sub-section (2) of this section is particularly relevant, as it provides that the custodian shall not permit the imported goods to be removed from the Customs area or otherwise dealt with, except under or in accordance with the permission of the proper officer. It has been contended before us by the counsel of the appellant that sub-section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Bank of India" and that the expression is not qualified by the word "previous" or "prior". While we are conscious that the word "prior" or "previous" may be implied if the contextual situation or the object and design of the legislation demands it, we find no such compelling circumstances justifying reading any such implication into Section 29(1). On the other hand, the indications are all to the contrary. We find, on a perusal of the several, different sections of the very Act, that the Parliament has not been unmindful of the need to clearly express its intention by using the expression "previous permission" whenever it was thought that "previous permission" was necessary. In Sections 27(1) and 30, we find that the expression 'permission' is qualified by the word 'previous' and in Sections 8(1), 8(2) and 31, the expression 'general or special permission' is qualified by the word "previous", whereas in Sections 13(2), 19(1), 19(4), 20, 21(3), 24, 25, 28(1) and 29, the expressions 'permission' and 'general or special permission' remain unqualified. The distinction made by Parliament between permission simpliciter and previous permission in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....moval of the goods from the Customs area was actuated by the desire to evade duty, and if as a result of such an act the revenue was prejudiced, the finding of the Commissioner may be justified. Consequently, if the bona fides of the appellant are not in doubt, and it has been accepted that the removal of the goods from the Customs area was actuated by genuine need to shift them to a safer location and in the process no loss had been caused to the Revenue or any gain accrual to the appellant, there should be no hesitation in regularizing the matter by granting a post facto permission under Section 45(2) of the Act. (c) The provision of Section 49 of the Customs Act, 1962 also permit the deposit of such goods in a warehouse in such cases. Keeping in mind the nature of the goods and the size of the same, deposit in an open warehouse, which is not even licensed under Section 57 or & 58 of Customs Act, 1962 was permissible. That aspect has not been contested nor considered by the Customs Authorities. The prescription of Section 49 could have solved the problem and even confiscation would not have been called for. 10. However, the confiscation is not challenged by the appellants and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mpugned order, on this aspect; which leads to an inevitable conclusion that the bona fides of the appellant importer are now not disputed by the Department. During the hearing, the ld. Counsel for the appellants, informed us that due to delay in the setting up of the refinery, the Central Board of Excise & Customs had issued orders directing the Customs at the Port of lading not to dispose of the goods lying in the Port Area. In this manner, the time for payment of duty would be deemed to have been extended by the Board itself from time to time. We were also told that this date of payment for duty was last extended till 30-9-2004. That being the position, even if the goods had remained in the Port Area, the appellants could not have been coerced into making any payment of duty on such goods by resorting to the provisions of Section 48 of the Customs Act, 1962. All that the appellants would have to do was to discharge duty as per the extensions granted by the Board. That position would be no different, even if the goods were removed from the Port Area and kept at the refinery site, which admittedly belongs to the same company which holds the custody of the goods. In other words, it ....