Legal principle

If recourse to a Board circular, read in isolation, would have the effect of nullifying an adjudication confirming duty that has attained finality, such interpretation is necessarily bad in law.

Court decision

The High Court allowed the Revenue's Tax Appeal No.504 of 2022, answered substantial questions of law (iii) and (iv) in the negative i.e. in favour of the Revenue and against the respondent, set aside the CESTAT order dated 31.01.2022 in Customs Appeal No.10752 of 2019, and dismissed that appeal, holding the Tribunal had committed a gross error in entertaining the respondent's prayer; Special Civil Application No.14527 of 2022 seeking permission to re-export was also dismissed.

Facts

Baroda Rayons Corporation Ltd., a manufacturer of viscose filament (rayon) yarn, imported plant and machinery from Japan, Germany and Korea in 1995-96 under OGL, executing 21 bonds for Rs.18,01,31,442 and storing the goods in a private bonded warehouse at Surat. Warehousing extensions were granted only up to 31.12.1997, and later extension requests (from the 6th onwards) were rejected. The department issued show cause notices culminating in 16 Orders-in-Original dated 30.03.2001 and further orders, with customs duty of Rs.688.06 lakhs confirmed against the importer through proceedings that attained finality up to the Tribunal. The respondent, which had become a sick industrial unit under BIFR proceedings, later sought re-export of the goods and extension of the warehousing period, which was refused by the department's communication dated 07.03.2019.

Key provisions

• Section 72, Customs Act, 1962 — Goods improperly removed from warehouse, etc
• Section 61, Customs Act, 1962 — Period for which goods may remain warehoused
• Section 69, Customs Act, 1962 — Clearance of warehoused goods for export
• Section 47, Customs Act, 1962 — Clearance of goods for home consumption
• Section 15(1)(b), Customs Act, 1962 — Date for determination of rate of duty and tariff valuation of imported goods
• Section 110A, Customs Act, 1962 — Provisional release of goods, documents and things seized
• Section 74, Customs Act, 1962 — Drawback allowable on re-export of duty-paid goods
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 129, Customs Act, 1962 — Appellate Tribunal
• Section 117, Customs Act, 1962 — Penalties for contravention etc not expressly mentioned
• Section 130A, Customs Act, 1962 — Application to High Court