Legal principle

Where goods are deposited in and removed from a shifted special warehouse under the supervision and with the knowledge of Customs officers, mere failure to amend the licence for the new premises does not justify cancellation of the licence under Section 58B(1).

Court decision

The Tribunal set aside the impugned cancellation order and allowed the appeal by way of remand, directing the Commissioner to restore the original Special Warehouse Licence and to consider amending the licence to incorporate the 154 sq. mtr. space, if otherwise in accordance with law.

Facts

M/s Plus Max Duty Free Pvt. Ltd. held Special Warehouse Licence No.1/2017-18 dated 31.08.2017 under Section 58A of the Customs Act, 1962 for a 35.89 sq. mtr. space at Trivandrum International Airport to store imported duty-free goods (including foreign made foreign liquor) for supply to its Duty Free Shop. Within 15 days, the Airport Authority of India allotted a larger 154 sq. mtr. premises, which the appellant occupied without amending the licence. After a complaint of illegal duty-free sales, a search revealed discrepancies, and the Commissioner suspended the licence under Section 58B(2) by order dated 19.04.2018 and later cancelled it under Section 58B(1) by Order-in-Original dated 05.04.2022, citing operation from unlicensed premises, direct sales without warehousing, and transfer of the licensed premises without departmental knowledge.

Key provisions

• Section 58A, Customs Act, 1962 — Licensing of special warehouses
• Section 58B(1), Customs Act, 1962 — Cancellation of licence
• Section 58, Customs Act, 1962 — Licensing of private warehouses