Warehousing - Relevant date for calculation of customs duty in cases where warehoused goods are cleared after the expiry of warehousing period.

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Warehoused goods cleared after the expiry of warehousing period - Relevant date for calculation of customs duty F. No. 473/206/87-Cus. VIII Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs. New Delhi, dated 12-7-1989 Subject: Relevant date for calculation of customs duty in cases where warehoused goods are cleared after the expiry of warehousing period. Reference to Board's instructions contained in F. No. 483/17/85-Cus. VII, dated 17th March, 1987 on the above mentioned subject wherein it was clarified that in cases where warehoused goods are cleared from a warehouse after the expiry of the bond period, the rate of duty shall be the one which is prevalent on the date of expiry of the bond. 2. The issue was re-considered in the Tripartite Meeting held in the Ministry of Law with the representatives of the Department of Revenue and C. &AG. It was observed in the meeting that on expiry of warehousing period, the goods kept in a warehouse cease to be warehoused goods and, therefore, their removal from the warehouse cannot be regarded as covered by the provisions of section 15(1) (b) of the Customs Act. It was also noted that there was no specific provision to determine the rate of duty in such cases of warehoused goods where the bond period has expired. It was accordingly concluded that the residual clause of Section 15(1) (c) of the Customs Act could apply to cases where goods are removed from a warehouse after expiry of the warehousing period and that the rate of duty in such cases shall be the rate prevalent on the date of payment of duty. 3. The provisions of Section 15(1) (b) of the Customs Act would, however, continue to apply in cases where goods are cleared from the warehouse after extension of the warehousing period but before expiry of the extended period. For applying this provision, the applications from the importers for extension of the warehousing period shall be received before the expiry of the permitted period of warehousing. If such applications are received after expiry of warehousing period, including the extended period, the extensions cannot be granted as such goods cannot be regarded as warehouse goods. 4. Board has accepted the above conclusions reached in the Tripartite Meeting as brought out in paras 2 and 3 above. These may be implemented with immediate effect. This supersedes Board's instructions issued vide F. No. 483/17/85-Cus.VII, dated 17th March, 1987. JUDICIAL ANALYSIS C.B.E.& C. Circular No. 473/206/87, dated 12-7-89 - Revenue's appeal on basis of this circular cannot be accepted because it is contrary to ruling of Higher Court- Appeal was dismissed. - Commissioner v. Simplex Casting Ltd. - 2001 (137) ELT. 530. (Tri. - Del.). Appeal to Supreme Court admitted in 2002 (140) E.L.T. A79 (S.C.) For subsequent modifications/developments, see Circular No. 31/97-Cus. Dated, 14-8-1997.

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