KW Fuels Pvt. Ltd. imported High Spirit Diesel (HSD) and stored it in a public warehouse. An ex-bond bill of entry for home consumption was filed…
CA Final · Indirect Tax Laws · RTP · September 2025
KW Fuels Pvt. Ltd. imported High Spirit Diesel (HSD) and stored it in a public warehouse. An ex-bond bill of entry for home consumption was filed and applicable customs duty was paid based on the rate prevalent on the date of presentation of such bill of entry. The proper officer passed an order for clearance for home consumption. Owing to the highly inflammable nature of the commodity, the importer made an application to permit the storage of such diesel in the same warehouse until actual clearance for sale/use. The application was allowed. At the time of actual removal of goods from the warehouse, the rate of duty had been revised upwards. The Department, invoking the revised duty rate, demanded payment of the differential duty on the ground that the goods were removed at a time when the higher rate was in effect. KW Fuels Pvt. Ltd. has contested the legitimacy of this demand. Critically examine the validity of the Department's demand in light of the provisions of the Customs Act, 1962 and relevant judicial ruling, if any.
Suggested Answer and Working Notes:
No, the demand raised by the Department is not valid. Section 49 of the Customs Act, 1962 inter alia provides that imported goods entered for home consumption if stored in a public warehouse, or in a private warehouse on the application of the importer and if the same cannot be cleared within a reasonable time, shall not be deemed to be warehoused goods for the purposes of this Act, and accordingly the provisions of Chapter IX shall not apply to such goods. The facts of the given situation are also similar to the case of CCus vs. Biecco Lawrie Ltd. 2008 (223) ELT 3 (SC) wherein the Supreme Court has held that where duty on the warehoused goods is paid and out of charge order for home consumption is made by the proper officer in compliance of the provisions of section 68 of the Customs Act, the goods allowed to be retained for storage in the warehouse as permitted under section 49 of the Customs Act are not treated as warehoused goods and importer would not be required to pay anything more.
Topics: Customs: Warehousing
Related Questions in this Topic
- An importer files an into-bond bill of entry for goods with an assessable value of ₹ 15,00,000. Basic customs duty is 10...
- SuperArc Paper Mills Ltd. imported 500 tons of bamboo pulp paper rolls on 5 th April. It warehoused the said rolls in i...
- Charkha Spinning Mills Ltd imported polyester fibre from Turkey on 10th July, 2025. The said goods entered in the territ...
- KS Ltd. imported Super Kerosene Oil (SKO) and stored it in a warehouse. An ex-bond bill of entry for home consumption wa...
- John & John India Ltd. imported a consignment from U.S.A (by sea). The value of consignment was - 7,50,000 and total dut...