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Customs - 100% EOU - Warehousing facility - Application for extension of warehousing period - Can be made even after warehousing period is over: CESTAT

By TIOL News Service

BANGALORE, AUG 22, 2014: THE appellant imported 500 Kgs of Solenesol and 20 Kgs. of Octacosanol without payment of duty in April 2007 and July 2007 under Notification No.52/2003-Cus dated 31.3.2003 for which the appellant was eligible being a 100% E.O.U. Since the appellant did not utilize the material for 3 years nor did they clear it on payment of duty and nor they obtained extension of warehousing period in respect of these two inputs, proceedings were initiated culminating in demand of duty of Rs. 7,76,391/- and penalty of Rs. 1,00,000/- besides interest on the duty payable.

It was submitted that the appellant could not utilize the inputs because the price went down drastically; that because of insufficient knowledge of law, the appellant failed to apply for extension of warehousing period before the period of three years was over. Nevertheless, the appellant had made an application in June 2012. It is submitted that even though the appellant made a submission before the original authority that they had made an application for extension of warehousing period and no decision has been taken on such application, the adjudicating authority proceeded with adjudication.

The Tribunal observed:

"No doubt, the application was made much after the period was over, yet, once the application was made, a formal decision should have been taken and communicated to the assessee. Even the CBEC Circular had observed that such applications for extension of warehousing period could be made even after the warehousing period is over. Paragraph 6 of the Circular No. 47/2002-Cus dated 29.7.2002 is relevant and is reproduced below:

6. You are requested to advise the trade to file such applications for extension of warehousing period, as far as possible, prior to fifteen days of the warehousing period. All such request should normally be decided by the Customs within this period. At the same time, the requests for grant of extension of warehousing period can be considered after the expiry of initial or extended period of warehousing, after taking into consideration the exceptional circumstances of the cases, nature of commodity, rate of duties, particularly, whether the same could result in loss of revenue to the Government, licensing aspects involved, etc.

That being the position, passing of the order-in-original without waiting for a decision and without taking a decision on the application made by the appellant was unfair and cannot be justified.”

Accordingly, Tribunal set aside the impugned order and remanded the matter to the first adjudicating authority with a direction to consider the issue after the application made by the appellant for extension of warehousing period is decided.

(See 2014-TIOL-1566-CESTAT-BANG)


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