The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad reduced demand of Customs Duty as the Disputed goods found within registered and bonded Public Bonded Warehouse (PBW) on date of search.
M/s Modest Infrastructure Ltd, the appellant is engaged in the activities of Ship Building and repairing. The respondent has been granted licence for Public Bonded Warehouse (PBW) in terms of the provisions of Section 58 of the Customs Act, 1962.
After search, seizure and completing the investigation a show cause notice was issued demanding Customs Duty on ship spare parts under Section 28 of the Customs Act and proposing confiscation of goods under Section 111(j) and (o) of the Customs Act and proposing imposition of penalty under Sections 112(a) and 114A of Customs Act.
The Commissioner (Appeals) held that Warehouse -2 situated on the additional land of 17415 sq. metres stands included in the Public Bonded Warehouse of the assessee and therefore the raw materials found therein were within the PBW and cannot be said to have been found outside the PBW or removed illegally from the bonded premises of the assessee.
In the present matter controversy arise due to the place where the disputed goods were found lying in Warehouse -2, located in the additional land which has been alleged to be not a part of registered and bonded premises. The case of the department is that, since the goods were found in Warehouse -2, the said re-warehoused goods were removed illegally from PBW of Respondent since the said warehouse -2 was located in the additional land
The Counsel for the appellant, T. G Rathod submitted that the Adjudicating Authority has erred in holding that permission for extension of PBW was granted in response to the assessee’s application in as much as the application did not have any request for extension of the PBW and no mention of PBW was made in the said application. The Counsel further submitted that merely filing application to the proper officer for grant of licence under Section 58 of the Customs Act, 1962 does not entitle the applicant to enjoy the benefits of Private Bonded Warehouse.
Sarju Mehta, Chartered Accountant appearing on behalf of the respondent reiterated the finding given by the Adjudicating Authority in the impugned order.
A Division Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The said facts clearly lead to conclude that permission was indeed granted for the additional land even though the specific sections were not specifically mentioned therein. Since the disputed goods were found within the registered and bonded PBW on the date of search, Commissioner correctly dropped the demand. “
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