Decided on October 29,1991

Coromandal Foam Products Appellant
Collector Of Customs And Central ... Respondents


S.KALYANAM,MEMBER - (1.) THIS appeal is directed against the order of the Collector of Customs and Central Excise (Appeals), Madras, dated 9 -2 -90 confirming the order of the Assistant Collector of Central Excise, Customs Division, Cuddalore, dated 13 -4 -89 and demanding duty on short receipted quantity of 555 Kgs. of Desmodur T 80.
(2.) SHRI Sankaram, the learned Counsel for the appellant, contended that after the goods had been imported by the appellant they were warehoused under bond and with the permission of the authorities and after complying with the statutory formalities the goods were transhipped for re -warehousing to Pondicherry and proceedings were instituted on the ground that during such transhipment there was a shortage in quantity of 555 Kgs. of the goods in question and duty was levied on the appellant. The learned Counsel submitted that the goods were found in the condition in which they had been imported and excepting the small dent in one drum there was no damage on the drums. The goods must have been short -supplied by the supplier and a communication had been addressed to the supplier and this has been brought to the notice of the Assistant Collector, Cuddalore, by the appellant by their communication dated 23 -1 -89. It is not the case of the Department that the appellant had either tampered with the goods in question or in any way removed or dealt with it or responsible for the shortage. No proceedings were taken by the Department for short -landing in respect of the goods in question. The appellant also had the goods surveyed on 21st November, 1988 by an authorised surveyor, whose report reads "shortage in one drum probably due to loss/leakage from the drum, damage due to rough handling presumably during transit and or whilst awaiting clearance and shortage in 3 drums presumably due to short packing since these drums were externally sound." The learned Counsel contended that in terms of Section 23 of the Customs Act, 1962, the "Act" for short, if the imported goods have been lost or destroyed otherwise than as a result of pilferage at any time before clearance for home consumption, the appellant would be entitled to have proportionate remission of duty on such goods. In the present case in the absence of any allegation of tampering with the goods in existence and the containers even as per the insurance report remaining in tact if there is any loss or destruction, the appellant would be entitled to work out his remedy in terms of Section 23 of the Act and this aspect has not been considered by the authorities below. The learned Counsel further submitted that the appellant may be afforded a chance to present his case in terms of Section 23 of the Act and also to produce evidence from the supplier in proof of short -supply and seek redress as per law.
(3.) SHRI Gregory, the learned SDR, submitted that when the goods are being transhipped from one warehouse to another warehouse under bond, the responsibility is squarely on the importer under law. In addition to that under Section 67 goods are permitted to be removed from one warehouse to another subject to the conditions of due arrival of the warehoused goods in the other warehouse in tact and the payment of duty by the appellant on removal. The learned SDR further submitted hat the present plea of the appellant with reference to the applicability of Section 23 was not in specific terms urged before the authorities and being a question of law the issue may be remanded for consideration of the same in accordance with law. The learned SDR also emphasised that notwithstanding the fact that the import had taken place in September, 1988 the appellant having paid for the entire quantity had not agitated the issue of short -landing with his supplier and produced materials in proof thereof. I have considered the submissions made before me. The duty is demanded on ground of shortage of the goods during transhipment from one warehouse to another warehouse under bond. On going through the records, I find that no allegation has been levelled against the appellant of tampering with the goods or removal of the goods during transhipment from one warehouse to another warehouse. The insurance report referred to supra would indicate a dent and also a possible short -supply of the quantity in question. The appellant also has written to the authorities that he was taking up the matter with the supplier for short -supply of goods in question. A plain reading of Section 23 of the Act would show that before the goods are cleared for home consumption, if it is shown to the satisfaction of the Assistant Collector that the goods have been lost or destroyed at any time before clearance for home consumption otherwise than as a result of pilferage, the Assistant Collector of Customs shall remit the duty on such goods. Since a plea is taken before me on question of law in terms of Section 23 of the Act and since the same has not been considered in the impugned orders, I set aside the impugned order and remand the matter for consideration of this plea of the appellant by the original authority in accordance with law and I make it clear that I am not expressing any view on the merits of the issue. It is open to the appellant to produce evidence in support of his plea of alleged short -supply and also to seek relief as per law, if any, open to him. In the result the appeal is remanded to the original authority for reconsideration of the issues as set out above:;

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