M/S. BISCO LIMITED versus COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE

Citation: [2024] 3 S.C.R. 890 · Decided: 20-03-2024 · Supreme Court of India · Bench: B.V. NAGARATHNA · Disposal: Case Partly allowed

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Judgment (excerpt)

* Author
[2024] 3 S.C.R. 890 : 2024 INSC 231
M/s. Bisco Limited 
v. 
Commissioner of Customs and Central Excise
(Civil Appeal No. 4663 of 2009)
20 March 2024
[B. V. Nagarathna and Ujjal Bhuyan,* JJ.]
Issue for Consideration
The appellant had imported second hand steel mill machinery 
and parts covered by three transit bonds totalling 595 cases. 
The officials of the Preventive Branch of the Commissionerate 
searched the industrial premises of the appellant, including 
the notified public bonded warehouse and found that only 
304 cases were stocked inside the warehouse, whereas 
264 cases were found outside the warehouse but within the 
industrial/factory premises of the appellant. Remaining 27 
cases were neither found inside the warehouse nor outside the 
warehouse. The Commissioner of Customs and Central Excise, 
inter-alia, confiscated 264 cases of imported goods valued at 
Rs.48,79,776.00 seized from within the factory premises of the 
appellant but outside the approved warehouse u/s. 111 of the 
Customs Act. However, the confiscated goods were permitted 
to be redeemed on payment of fine of Rs.2 lakhs. Further, 
the Commissioner had confirmed customs duty amounting to 
Rs.39,03,821.00 in terms of s.71 r/w. the proviso to s.28A of the 
Customs Act. That apart, appellant was directed to pay interest 
of Rs.18,88,425.00 on the aforesaid quantum of customs duty 
in respect of the 264 cases from the date of warehousing till the 
date of detection of the shortage in the warehouse. In appeal, 
CESTAT by the impugned order affirmed the aforesaid decision 
of the Commissioner.
Headnotes
Customs Act, 1962 – s.71 r/w. the proviso to s.28A, s.111 – The 
allegation of the respondent is that 264 cases were improperly 
or unauthorisedly removed from the notified warehouse as 
those were found lying outside the notified area but within the 
industrial/factory premises of the appellant – That apart, 27 
cases were neither found inside the notified warehouse nor 
[2024] 3 S.C.R. 
891
M/s. Bisco Limited v. Commissioner of Customs and Central Excise
outside the said warehouse but within the factory premises 
of the appellant – In such circumstances, the respondent 
has justified the order dated 28.04.2005 (passed by the 
Commissioner),which was affirmed by the CESTAT vide order 
dated 30.04.2009 – Propriety:
Held: The appellant had submitted that soil outside the notified 
area that become very sluggish due to heavy rains – As a 
result, the trailers carrying the consignment could not enter the 
notified warehouse and appellant had requested the concerned 
Superintendent of Customs and Central Excise to shift the 
machineries to under a shed within the factory premises – 
The permission was granted – The permission granted by the 
Superintendent to the appellant to unload a portion of the cargo 
outside the open space which was notified as public bonded 
warehouse but within the factory premises of the appellant was 
neither cancelled nor revoked by the Superintendent or even by 
the Commissioner – Infact, a view can reasonably be taken that 
the appellant as the owner of the goods had exercised its right 
u/s. 64(d) which was endorsed by the Superintendent – Therefore, 
it would not be correct to say that the 264 cases found outside 
the notified warehouse but within the factory premises of the 
appellant were improperly or unauthorisedly removed from the 
notified public bonded warehouse – Also, the period of warehousing 
had not expired and continued to remain operational in terms 
of the proviso to s.61 of the Customs Act – The decision of the 
respondent to invoke s.71 and thereafter levy interest on the 
goods covered by the 264 cases u/s. 28AB of the Customs Act 
was not justified – Since the imported goods covered by the 264 
cases were never warehoused inside the notified public bonded 
warehouse but were unloaded outside the notified area but within 
the factory premises of the appellant and kept under a shed on 
permission granted by the Superintendent which permission 
was neither cancelled nor revoked, question of warehousing the 
goods covered by the 264 cases within the notified public bonded 
warehouse did not arise – However, there is no explanation on 
the part of the appellant qua the missing 27 cases – Therefore, 
the view taken by the respondent and affirmed by the CESTAT 
that those 27 cases were improperly or unauthorisedly removed 
from the notified public bonded warehouse is correct and requires 
no interf

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