CESTAT has No Power to Grant Refund of Warehousing Charges under Customs Act: Delhi HC [Read Order]

Finance Act - Delhi High Court - taxscan

In PCIT v. Suren International Ltd, a division bench of the Delhi High Court held that the Customs, Excise, Service Tax Appellate Tribunal ( CESTAT ) has no power to grant refund of warehousing charges under the provisions of the Customs Act, 1962.

In the instant case, the Respondent imported 40 containers of Aluminium/Copper scrap. After examination of goods, the department seized and confiscated the same by finding there was a grossly erroneous declaration of weight and description of the goods. Penalty was separately imposed on them. Respondent approached the Department for release of the confiscated goods after payment of the fine and penalty. The seized goods had been kept in the warehouse of the Central Warehousing Corporation from May, 2003 onwards. Accordingly, the Assistant Commissioner Customs (Preventive) required the Respondent to deposit the warehousing dues of the CWC which was paid by the Respondent under protest.

Though the respondent sought for refund of the same before the Assistant Commissioner of Customs, the application was rejected.

Though the Commissioner of Customs (Appeals) confirmed the above order, CESTAT granted refund to the respondent.

Before the High Court, the department contended that there is no provision in the Customs Act permitting an adjudicating authority to grant refund of warehousing charges. They said that the Respondent’s liability to pay the warehousing charges was independent of its liability to pay the customs duty, interest, fine and penalty. This is made explicit in Section 73 of the Customs Act as well.

Allowing the department appeal, a bench of Justices S Muralidhar and Prathibha M Patil clarified that there is no provision in the Customs Act or any other law that enabled the CESTAT to grant such a relief.

Read the full text of the Order below.

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