UNION OF INDIA & ORS versus SHAKTI LPG LTD. & ANR

Citation: [2008] 2 S.C.R. 1101 · Decided: 18-02-2008 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Appeal(s) allowed

Judgment (excerpt)

j 
... r 
[2008] 2 S.C.R. 1101 
UNION OF INDIA & ORS . 
II. 
SHAKTI LPG LTD. & ANR 
(Civil Appeal No. 1356 of 2008 etc.) 
[FEBRUARY 18, 2008] 
[T ARUN CHATTERJEE AND HARJIT SINGH BEDI, JJ.] . 
A 
B 
Customs Act, 1962 - s.61(1)(b) - Warehousing of goods 
-After various extensions of the maximum period of' 
warehousing and surrender of the goods by the party, goods . c 
decided to be put on auction -Request by the party to stop the 
auction with request to re-export the goods -Denied by 
Department - Litigation seeking re-export rejected upto ' 
Supreme Court - Re-auction held - Writ petition seeking re- , 
export allowed by High Court -By further order High Court 0 
clarifying that the order permitting re-export was passed with · 
consent - On appeal, held: Party having surrendered its title . 
in the goods and plea to re-export having been rejected upto 
Supreme Court in previous litigations, cannot be granted 
permission -Even by virtue of Circulars, party not entitled to ' E 
permission for re-export as in the facts of the case, Circulars 
not applicable - The order of High Court was not passed with 
consent of the parties -
Circulars dated 29.7.2002 and 
14.1.2003. 
The goods imported by respondent No.1 had been 
F 
warehoused initially for a period of one year i.e. maximum 
period. The period was further extended from time to time 
on the request of the respondent upto 31.1.2001. 
Thereafter extention was not sought and the respondent 
intimated the department that it was surrendering the 'G 
goods. Department fixed the auction on 28.9.2005. On 
the same day, respondent requested the Department to 
stop the auction with a request for permission to re-export 
the goods. Subsequent to order of the High Court, the 
1101 
H 
· 
1102 
SUPREME COURT REPORTS 
(2008] 2 S.C.R. 
A proposal of re-export was considered and denied. by the 
authority concerned. 
A writ petition seeking. re-export of the goods was 
dismissed by High Court. The plea was rejected upto 
Supreme Court. An appeal against the order of authority 
8 rejecting re-export before CESTAT was withdrawn by the 
respondent. Department initiated proceedings for re-
auction. Respondent again sought permission for re-
export. The auction took place. Respondent filed writ 
petition, which was disposed of by accepting the 
C undertaking of the respondent for re-export the goods. 
Respondent thereafter sought clarification of the High 
Court as to whether it was an order with consent, wherein 
High Court observed that though the order did not 
specifically say so, but the understanding was that it was 
D in fact so. Hence the present appeals against both the 
orders of High Court. 
Respondent relying on the Circulars dated 14.1.2003 
and 29. 7.2002 contended that maximum period of 
warehousing could be extended and that re-export of 
E goods could be allowed even if decision has been takeh 
to put the goods on auction after expiry of maximum 
period. 
F 
Allowing the appeals, the Court 
HELD: 1.1 The present case would fall within the 
scope of Section 61(1)(b) of Customs Act, 1962. The facts 
show that the goods imported by the respondent had been 
warehoused initially for a period of one year i.e. the 
maximum permissible period but which had nevertheless 
G been extended time and again on the request of the 
respondent whereafter no application for extension had 
been made. It is also clear that the respondent had 
intimated that he was surrenderi·ng the goods as the 
purpose for which they had been imported could not be 
H implemented. Merelv because the respondent thereafter 
J 
UNION OF INDIA & ORS. v. SHAKTI LPG LTD. & ANR. 
1103 
- t 
withdrew the offer of surrender would not make any A 
difference to its cause. [Para 7] [1110-A, B, C] 
1.2 The Circular dated 29th July 2002 is, however1 a 
general circular advising the Chief Commissioner to be 
liberal in granting extension under section 61 of the Act. 
B 
Circular dated 14th January 2003 states that the request 
for re-export of th.e goods could be allowed even if the 
maximum period of warehousing had expired a~d 
demand notices had been issued and even if it had been 
decided to put the goods to auction. But it is clear from 
the record that this Circular would not be applicable in c 
the present case as the application for extension of time 
had been made on 22nd /28th September 2005 when tJle 
auction was to be held on 29th September, 2005 but h
1ad 
been stalled on account of the efforts of the respond

Excerpt shown. Read the full judgment & AI analysis in Lexace.