Case law

Custom, Excise & Service Tax Tribunal · 16 Apr 2025

Kolkata(Port) vs Shriram Warehousing Pvt Ltd

Legal principle

Under Section 150(2) of the Customs Act, 1962, sale proceeds must be applied in the statutory order of priority—first to expenses of sale, next to freight and other charges payable to the carrier under Section 150(2)(b), and thereafter to duty—and the Commissioner (Appeals) is vested with power to remand a matter for fresh adjudication under Section 128A(3)(b).

Court decision

The Tribunal dismissed the Revenue's appeal and maintained the Commissioner (Appeals) order: payment of Rs.74,65,099 as freight under Section 150(2)(b) was upheld, and the remand of the warehouse rent claim for verification of bills was held valid as within the Commissioner (Appeals)'s powers under Section 128A(3)(b); the respondent's cross objections were disposed of in the same terms.

Facts

Shriram Warehousing Pvt Ltd, a Public Customs Bonded Warehouse, stored seven consignments of second-hand rolling mill equipment imported by M/s APS Container during 1997-1999, along with five consignments of M/s KHSL Industries Ltd and APS Container. M/s Malvika Steel Ltd filed two Bills of Entry for ex-bond clearance of 1707 pcs of pipes and 180 pcs of valves, and although duties were paid, the goods were not cleared, leaving warehouse rent unpaid. The respondent sought permission in 2003 under erstwhile Section 63 to sell the goods by public auction; following Calcutta High Court directions, Revenue e-auctioned the goods in two lots fetching Rs.3,84,11,251 and Rs.44,99,001. The Deputy Commissioner appropriated Rs.9,12,419 as sale expenses and the balance towards customs duty, leaving nothing for the respondent and returning no finding on its freight claim of Rs.74,65,099. The Commissioner (Appeals) allowed the freight claim and remanded the warehouse rent claim of Rs.21,97,80,235, prompting the Revenue's appeal before the Tribunal.

Key provisions