KESORAM RAYON (A UNIT OF M/S. KESORAM INDUSTRIES LTD.) versus THE COLLECTOR OF CUSTOMS, CALCUTTA

Citation: [1996] SUPP. 5 S.C.R. 77 · Decided: 23-08-1996 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Dismissed

Judgment (excerpt)

KESORAM RA YON (A UNIT OF M/S. KESORAM INDUSTRIES 
A 
LTD.) 
v. 
"r 
THE COLLECTOR OF CUSTOMS, CALCUTTA 
~ 
AUGUST 23, 1996 
B 
(S.P. BHARUCHA AND S.C. SEN, J.] 
Customs Act, 1962 : 
' 
~ 
c 
Ss. 61(1)(b), 72-Warehoused goods-Levy of Customs duty on-
Goods not removed from bonded warehouse within pennitted period-field, 
are goods improperly removed from warehouse-<:ustoms duty thereon would 
• 
be payable at the rate applicable on the date of their deemed removal from 
the warehouse i.e. the date on which the pennitted period or its pennitted 
extension came to an end-Interest on the amount of duty would be payable D 
for the period from the expiry of pennitted period till the date of clearance of 
goods from the warehouse-There is nothing on record to indicate that 
clearance of goods u/s. 68was ordered--S.IS(l)(b) has, therefore, no applica-
ti on. 
The appellants imported certain bales of rayon grade wood pulp and E 
got them warehoused in its private bonded warehouse on 16.6.1984 for a 
period of three months under the provisions of s. 61 (1) (b) of the Customs 
Act, 1962. Some of the bales remained in the warehouse after the period 
·" 
of warehousing came to an end on 15.9.1984. A demand notice under 
s.72(1) of the Act was issued to the appellants stating that the said bales F 
remained in the bonded warehouse beyond the prescribed period though 
the period of warehouse had not been extended and, therefore, the appel-
!ants became liable to pay, in respect of the said bales, customs duty, 
countervailing duty and interest from 16.9.1984 till the date of their 
... 
removal from the bonded warehouse under the provisions of s. 72(1)(b) . G 
, 
On 30.5.1985 the appellants filed a bill of entry for ex-bond clearance of 
the said bales for home consumption. On 25.6.1985 the appellants were 
served with an order stating that the bonded warehouse would with treated 
as de-licensed. The bales were directed not to be cleared on ex-bond bill of 
entry as it was not a case of clearance under s. 68 of the Act, but on 
realisation of charges under s. 72. 
H 
77 
A 
B 
c 
78 
SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R. 
The goods were remov1~d between 29th June and 2nd July, 1985. 
Meanwhile, by virtue of an exemption notification dated 17.3.1985, pulp 
derived from vegetable fibre was exempted from payment of customs and 
additional duties. 
The appellants claimed that in view of s.15(l)(b) of the Act, the rate 
of Customs duty in force on the date of removal of the goods from the 
bonded warehouse was the applicable rate and, by virtue of the exemption 
notification, no duty was paya hie thereon. The Customs authorities as also 
the Customs, Excise and Gold (Control) Appellate Tribunal negatived the 
claim of the appellants. Aggrieved, the appellants filed the present appeal. 
Dismissing the appeal, this Court 
HELD : 1. Goods which are not removed from a warehouse within 
the permissible period, are by virtue of s.72 of the Customs Act, 1962, 
treated as goods improperly removed from the warehouse. Such improper 
D removal takes place when the goods remain in the warehouse beyond the 
permitted period or its permitted extension. The importer of the goods 
may be called upon to pay customs duty on them and, necessarily, it would 
be payable at the rate applicable on the date of their deemed removal from 
the wart:house, that is, the date on which the permitted period or its 
E 
permitted extension came to an end. When the duty is in fact demanded is 
not relevant. [88-D-E; 89-D] 
F 
2.1. The provisions of Section 68 of the Customs Act, 1962 and, 
consequently, of Section 15(1) (b) apply only when goods have been cleared 
from tht~ warehouse within t!he permitted period or its permitted extension 
and not when, by reason of their remaining in the warehouse beyond the 
period or its permitted exte111sion, the goods have been deemed to have been 
improp1!rly removed from the warehouse under Section 72. [88-F-G] 
2.:?. The permitted period for warehousing the goods, in the instant 
G case, came to an end on 15th September, 1984, but the same remained in 
the bonded warehouse thereafter. The goods by reason of the provisions of 
Section 72, were deemed to have been improperly removed from the bonded 
wa~ho11se on that day and subject to duty at the rate then in force. [89-A-B] 
2.3. The order dated 25th June, 1985, pertaining to the appellant's 
H private bonded warehouse, rightly made it clear that the said bales had not 
..

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