- (1.) This is an appeal against an order of the Customs, Excise and Gold (Control) Appellate tribunal. It raises a question of some importance relating to the rate at which customs duty is to be levied on goods that remain in a bonded warehouse beyond the permitted period.
(2.) The appellants imported and, on 25/5/1984, filed a bill of entry for 4832 bales of rayon grade wood pulp for warehousing. The 4832 bales were warehoused on 16/6/1984, in a private bonded warehouse of the appellants. Of these, 4,000. 00 were cleared and we are concerned only with the remaining 832 bales (now referred to as "the said bales"). The period of three months for which the said bales were warehoused under the provisions of Section 61 (1 (b) of the Customs Act, 1962 (hereinafter referred to as "the Act") came to an end on 15/9/1984. On 8/5/1985, the Assistant Collector of Customs issued to the appellants a demand notice under Section 72 (1 of the Act. It recorded that the said bales remained in the bonded warehouse although the period of warehousing had not been extended beyond 15/9/19844. The appellants had, therefore, become liable to pay in respect of the said bales customs duty in the sum of Rs. 6,73,885.80, countervailing duty in the sum of Rs. 1,63,657.98 and interest at the rate of 12 per cent per annum in the sum of Rs. 67,003.52 for the period 16/9/1984 to 15/5/1985 under the provisions of Section 72 (1 (b). Giving credit for the amount of Rs. 8,03,458.32 which had been deposited by the appellants, the appellants were called upon to pay Rs. 1,01,88.98 plus interest after 15/5/1985, till the date of removal of the said bales from the bonded warehouse. If the amount was not paid within 7 days of receipt of the demand notice, it was recoverable in terms of the provisions of Section 72 (2, without prejudice to any other mode of recovery. On 30/5/1985, the appellants filed a bill of entry for ex-bond clearance of the said bales for home consumption. On 25/6/1985, the appellants were served with an order in respect of the bonded warehouse within which the said bales were stored. The order recalled the demand notice dated 8/5/1985, and the deposit made by the appellants thereunder. It directed the Superintendent of the bonded warehouse to allow clearance of the said bales after realisation of such amount as was due. It stated that the bonded warehouse would be treated as delicensed from the date on which the said bales were cleared and action regarding cancellation of the bond given by the appellants was completed. The order concluded: "It is clarified for removal of doubts that the warehoused goods which will be cleared on the basis of the instant order will not be cleared on ex-bond bill of entry as this is not a case of clearance under Section 68 of the Customs Act, 1962 but on realisation of charges under Section 72 ibid:''between 29/6/1985 and 2/7/1985, the said bales were removed from the bonded warehouse.
(3.) On 25/5/1984, when the bill of entry for warehousing the said bales was filed, they were liable to customs duty. By virtue of an exemptionnotification dated 17/3/1985, pulp derived from vegetable fibre was exempted from the payment of customs and additional duties.;