The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that no confiscation can be made on taking prior permission from the customs department for storage of non-bonded goods in bonded warehouse.
On the basis of investigation, the officers found that the appellants had failed to comply with the provisions of the Customs Act, 1962; Public Warehouse Licensing Regulations, 2016 and Warehouse (Custody and Handling of goods) Regulations, 2016 as well as the licensing conditions. For carrying out detailed investigation and to stop any further violations of the licensing conditions, the license of public bonded warehouse issued to the appellants was suspended by the department as per the provisions of Sub-section (2) of Section 58B of the Customs Act.
The counsel for the appellant submitted that the disputed goods cannot be confiscated, when subsequent permission for bonding of tanks was given by the department. It was also pleaded that submitted that the goods covered thereunder were discharged from the vessel through high pressured pipe lines, which cannot be stopped mid-way during the process of discharge to avoid accidents and as such the same were stored in the public bonded tanks after discharging from the vessel by obtaining due discharge permission dated 30.04.2021 of the department.
A Two-Member Bench comprising SK Mohanty, Judicial Member and MM Parthiban, Technical Member observed that “In view of the statutory provisions regarding the warehoused goods and the instructions issued by the CBEC, it is amply clear that movement of goods within the bonded warehouse is permissible, subject to the condition that such activities should be within the knowledge of the department and necessary approval for such activities should be obtained by the warehouse licensee. In the present case, as discussed herein above, it is amply clear that the appellants have complied with such statutory provisions in carrying out the activities within the warehousing station(s). Therefore, it cannot be said that the goods dealt with by the appellants are liable for confiscation and accordingly, the appellants cannot be exposed to penal consequences provided under the statute.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
