The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that there will be no confiscation or fine for the storage of non-bonded goods in a bonded warehouse with the Customs Department’s permission.
The appellants herein were issued with a Public Bonded Warehousing License by the jurisdictional Customs authorities at Jawaharlal Nehru Custom House (JNCH), Nhava Sheva. In total, there were 79 public bonded storage tanks located in the premises of the said warehouse. The said license was issued to the appellants in terms of Section 57 of the Customs Act, 1962.
The license has provided various conditions to be fulfilled/observed by the license holder, the appellants herein. On 01.02.2023, a team of officers from the Import Bond section, JNCH visited the warehouse of the appellants and upon verification of the warehouse and various records, they observed that non-bonded goods had been stored in the bonded tanks, whereas bonded tanks are meant for storage of only customs bonded goods; that the bonded goods covered under Bill of Entry (B/E) No. 6749977 dated 06.07.2023 had been stored in non-bonded tanks in the month of July’ 2023, which is a clear violation of Section 60 ibid read with Section 71 ibid; that due to absence of the technical staff at the warehouse, the software maintained by the appellants could not be verified to ascertain, whether it is having audit trail facility as prescribed in para 2(c) of Circular No.25/2016 dated 08.06.2016.
Mr Anurag Mishra, representing the appellants submitted that in respect of the five numbers of B/Es dated 19.06.2023 (2 B/Es), 27.06.2023, 18.07.2023, and 22.09.2021, discharge permission was granted by the Customs department and the unloading of the consignment was done under their supervision. Thus, he submitted that when the permission has been granted by the competent authority, permitting the storage of bonded goods in non-bonded tanks, there is no violation or contravention on the part of the appellants.
The bench found that in support of the impugned order, the learned adjudicating authority has mainly dealt with the issues, concerning storage of bonded goods in non-bonded tanks, non-bonded goods being stored in bonded tanks, storage of goods imported by the licensee (appellants) in their own public bonded warehouse, storage of bonded goods in excess of approved duty limits etc. The original authority has held that the requirement of the provisions of the Customs Act, 1962; Public Warehousing Regulations, 2016; and the Warehouse (Custody and Handling of goods) Regulations, 2016 and the licensing conditions have not been fulfilled by the appellants. He has also discussed various provisions under the Customs Act, 1962 for confiscation of goods, imposition of redemption of fine and penalties on the appellants.
Further found that the impugned order dated 08.01.2024 has invoked the provisions of Section 111(h) and 111(j) ibid for confiscation of the goods and for imposition of the redemption fine on the appellants. The provisions of Section 111(h) ibid are attracted for confiscation in the eventuality, when any dutiable or prohibited goods unloaded or attempted to be unloaded in contravention of the provisions of Section 33 ibid or Section 34 ibid.
The two member bench of the tribunal comprising S.K. Mohanty ( Judicial member) and M.M. Parthiban ( Technical member) does not find any merits in the impugned order dated 08.01.2024, insofar as it has ordered for confiscation of goods, imposed redemption fine and penalties on the appellants. Since CESTAT did not find any substance in confirmation of the adjudged demands towards fine and penalties, the impugned order passed for revocation of suspension of warehousing operation shall also not be sustained.
Therefore, the impugned order dated 08.01.2024 was set aside in its entirety and the appeal is allowed in favour of the appellants.
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