JUDGEMENT
A. Kalyanasundharam, Accountant Member -
(1.)[This para is not reproduced here as it involve minor issues.]
(2.)In the appeal by the assessee for the assessment year 1984-85 the main claim relates to the trading loss of Rs. 14,82,337 representing value of imported polyester yarn and imported consignment expenses.
Shri G.C. Sharma, the Senior Counsel for the assessee, submitted that the assessee is a limited company and has been in the business of trading of imported polyester yarn which were mainly imported from Taiwan and China. In the accounting year relevant to the assessment year 1983-84 it had imported polyester yarn weighing 84,960 Kgs. from Hualon Corporation, Taiwan. The goods landed at the Indian Ports in January 1983. The payments in regard to the imported goods were made to the supplier between January to April 1983. The assessee with a view to avoid heavy losses on trading of these goods did not lift the goods from the Customs Authorities. The assessee felt the crunch to such an extent that it was compelled to surrender the goods and accordingly it intimated its decision relinquishing its title to the imported goods as provided in Section 48 of the Customs Act, 1962 to the Customs Authorities in November/December 1983. He submitted that the details of the goods so surrendered are at page 2 of the paper book and the correspondence in this regard, copies of invoice of purchase, copies of. clearing agents bills for expenses are all contained at pages 3 to 18 of the paper book. His main plank of the argument was that since as required by the Customs Act, 1962, the assessee having relinquished its title to the goods in favour of the Customs Authorities, the assessee has lost its goods for ever. It is on this basis that the assessee had claimed the loss as a deduction. He pleaded that he had gone through the provisions of the Customs Act and has not been able to place his hands on any provision of the Act which required the authorities under that Act to confirm or inform their acceptance of the relinquishment of the title to the goods. He, therefore, pleaded that once the intimation of the assessee relinquishing its title to the goods has been made to the knowledge of the Customs Authorities, the action is complete insofar as the assessee is concerned and thereby culminating the complete process of surrender, the loss is thus established. He pleaded that the Customs Authorities took time for disposal of the goods and till the date of the argument no amount had been realized but on the contrary the authorities have raised the bills on account of various expenses incurred by them. Referring to the provisions of Sections 61,62 and 63 of the Major Port Trusts Act, 1963, he pleaded that the assessee had been levied various charges, interest etc. His plea was that the assessee did not take possession of the goods, which it could have done only by virtue of payment of customs duty, which it did not pay on account of paucity of funds and which is also done considering the fact that the assessee might have to incur huge losses in disposal of the goods. The plea was that the loss having been suffered during the course of trading, in the case of import of the goods, it is clearly a trading loss and did not require any further evidence in this connection. He also referred to the provisions of Sections 61, 62 and 63 of the Major Port Trusts Act, 1963 which provided sales of the goods after two months of the goods having passed into its custody, disposal of the goods not removed from the premises of the Board within the time-limit prescribed and the application of the sale proceeds. His plea was that the assessee-company could only receive if there remains surplus after meeting the various expenses which have been incurred by the authorities in the disposal of the goods. He pleaded that the authorities have also claimed customs duty on these goods which is not at all payable by the assessee or the assessee having relinquished its title to the goods.
(3.)SHRI Bansal appearing for the Revenue strongly relied on the orders of the authorities.
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