Case Note & Summary
The case involves six customs appeals filed by M/s. GKB Ophthalmics Ltd. and M/s. GKB Vision Limited against the Commissioner of Customs, Mormugao Harbour, Goa. The appeals challenge a common judgment and order dated 14/9/2017 passed by the Customs Excise & Service Tax Appellate Tribunal (Tribunal) in Appeal Nos. A/89748 to 89751/17/CB. The core issue is whether the revenue was justified in demanding customs duties on wastage/brokerage that remained within the factory premises of the appellants, which were bonded warehouses, and were neither exported nor removed from the warehouse. The appellants argued that since the goods were not removed or exported, no duty was leviable. The respondent contended that duty was payable. The court, after hearing both sides, allowed the appeals, setting aside the Tribunal's order and the demand for duty, holding that no customs duty can be demanded on wastage/brokerage that has not been removed from the bonded warehouse or exported.
Headnote
A) Customs Law - Bonded Warehouse - Wastage/Brokerage - Demand of Duty - Section 12, Section 23, Section 68, Customs Act, 1962 - The issue was whether customs duty can be demanded on wastage/brokerage lying within the factory premises of a bonded warehouse when there is no evidence of removal or export. The court held that no duty is leviable as the goods were not removed from the warehouse or exported. (Paras 2-4)
Issue of Consideration
Whether revenue was justified in demanding customs duties on the wastage/brokerage available within the factory premises of the appellant/assessee and were neither exported nor removed from the bonded warehouse?
Final Decision
The appeals are allowed. The impugned order of the Tribunal dated 14/9/2017 is set aside. The demand for customs duty on wastage/brokerage is quashed.
Law Points
- Customs duty
- bonded warehouse
- wastage
- brokerage
- removal
- demand
- Section 12
- Section 23
- Section 68
- Customs Act
- 1962
Case Details
2020 LawText (BOM) (02) 100
Custom Appeal No. 1 of 2019, Custom Appeal No. 2 of 2019, Custom Appeal No. 3 of 2019, Custom Appeal No. 4 of 2019, Custom Appeal No. 5 of 2019, Custom Appeal No. 6 of 2019
M. S. Sonak, Dama Seshadri Naidu
C. A. Ferreira, Rajiva Srivastava (for appellants), Priyanka Kamat (for respondent)
M/s. GKB Ophthalmics Ltd. and M/s. GKB Vision Limited
Commissioner of Customs, Mormugao Harbour, Goa
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Customs appeals challenging demand of customs duty on wastage/brokerage in bonded warehouse.
Remedy Sought
Appellants sought setting aside of the Tribunal's order confirming demand of customs duty on wastage/brokerage.
Filing Reason
Revenue demanded customs duty on wastage/brokerage lying within factory premises of bonded warehouse, which was neither exported nor removed.
Previous Decisions
Customs Excise & Service Tax Appellate Tribunal (Tribunal) confirmed the demand of duty via common order dated 14/9/2017 in Appeal Nos. A/89748 to 89751/17/CB.
Issues
Whether revenue was justified in demanding custom duties on the wastage/brokerage available within the factory premises of the appellant/assessee and were neither exported nor removed from the bounded warehouse?
Submissions/Arguments
Appellants argued that no duty is leviable as goods were not removed from bonded warehouse or exported.
Respondent argued that duty was payable on wastage/brokerage.
Ratio Decidendi
Customs duty under the Customs Act, 1962 is leviable only on goods that are imported into India or exported from India. Wastage/brokerage lying within the factory premises of a bonded warehouse, which has not been removed or exported, does not attract customs duty.
Judgment Excerpts
The learned counsel for the petitioners submit that these appeals can be disposed of by a common judgment and order, since, the issues involved are identical and, in fact, the challenge is basically to the common judgment and order dated 14/9/2017 made in Appeal Nos. A/89748 to 89751/17/CB by the Customs Excise & Service Tax Appellate Tribunal (Tribunal).
Whether revenue was justified in demanding custom duties on the wastage/brokerage available within the factory premises of the appellant/assessee and were neither exported nor removed from the bounded warehouse?
Procedural History
The appellants filed six customs appeals before the High Court of Bombay at Goa challenging the common order dated 14/9/2017 of the Customs Excise & Service Tax Appellate Tribunal (Tribunal) which confirmed the demand of customs duty on wastage/brokerage. The appeals were admitted on 9/4/2019 on the substantial question of law. After hearing, the court allowed the appeals on 20/2/2020.
Acts & Sections
- Customs Act, 1962: 12, 23, 68
