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CBEC - Circular No. 13/ 96
dated 28/2/96
 
F. No. 483/ 12/ 95 - LC
 
Government of India
Ministry of Finance
Department of Revenue, New Delhi
Subejct : Warehousing of goods - Fresh Instructions
 
        I am directed to refer to an audit objection from C & AG received by the Board wherein the Audit has pointed out that the Department had failed to initiate timely action under section 72 of the Customs Act, 1962 in respect of the consignment of imported and bonded ship stores leading to the loss of Government Revenue. On ascertaining the facts it was learnt that the goods were of perishable nature and had been lying in the warehouse ranging between one to five years. Such goods had lost their commercial value due to prolonged storage. The facts further revealed that due care in extending the warehousing period keeping the perishable nature of goods in view, had not been taken. Consequently, the (i) importer relinquished the title of the goods under section 23(2) of the Customs Act, thereby enabling the importer for non-payment of customs duty. Had due care been taken to raise demands keeping the limited life of the perishable goods in view, the situation as aforesaid would not have arisen. The facts also revealed that the department neither extended the warehousing period not did they raise nay demand for payment of duty and interest in terms of section 72 of the Customs Act. The loss of revenue viz. customs duty and interest had occurred due to utter negligence of the Commissionerate staff.

        In order to ensure that such situation as reported by the Audit does not occur again the Board desires that:

    i)    Care should be taken while granting extension in warehousing period particularly to the goods having limited shelf life and/ or those of perishable nature.

    ii)    Where the warehoused goods have not been removed from a warehouse at the expiration of the period during which such goods are permitted under section 61 to remain in warehouse, an immediate demand should be raised against the owner of the warehoused goods for full payment of duty, penalties, rent, interest and other charges and if the owner fails to comply with a demand, steps should be taken to detain and sell the goods after due notice to the owner, in order to safeguard the Government Revenue.

Suitable instructions may be issued to all concerned.
Sd/-
(K. Chopra)
Under Secretary to The Govt. of India