IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH FRIDAY, THE 7TH NOVEMBER 2008 / 16TH KARTHIKA 1930 Co.Appeal.No. 1 of 2003() ------------------------------------ AGAINST THE JUDGEMENT/ORDER IN CP.1/1996 Dated 29/11/2002 .................... APPELLANT/APPLICANT ------------------ THE OFFICIAL LIQUIDATOR, HIGH COURT OF KERALA BY ADV. SRI.CHACKO GEORGE (SR.) SRI.H.RAMANAN SRI.JOSEKUTTY JOHN RESPONDENT(S): RESPONDENT ------------------------- THE COMMISSIONER OF CUSTOMS CUSTOM HOUSE WILLINGTON ISLAND, COCHIN-9 ADV. SMT.I. SHEELA DEVI, ADDL.CGSC FOR R SRI.P.PARAMESWARAN NAIR,ASGI THIS COMPANY APPEAL HAVING BEEN FINALLY HEARD ON 07/11/2008, ALONG WITH COA NO. 2 OF 2003 THE COURT ON THE SAME DAY DELIERED THE FOLLOWING: ORDER ON IA. 24 OF 2003 IN COA. NO.1 OF 2003 Dismissed 07.11.2008 SD/- J.B.KOSHY, JUDGE SD/- THOMAS P.JOSEPH, JUDGE /TRUE COPY/ P.A. TO JUDGE tss J.B.KOSHY & THOMAS P. JOSEPH, JJ. -------------------------------------- Company Appeal Nos.1 and 2 of 2003 ------------------------------------- Dated 7th November, 2008 JUDGMENT Koshy,J . A company named M/s.Toshiba Anand Batteries Ltd. was ordered to be wound up by the Company Court by order dated 5.11.1996 in Company Petition No.1 of 1996 after reference made by the Board For Industrial And Financial Reconstruction (BIF), under section 20 of the Sick Industrial Companies (Special Provisions) Act, 1987. While the company was functioning, it imported two consignments of zinc callots – 20 MT and 23 MT respectively, agrregating to 43 MT, from Peru. The goods were discharged by steamer lines in Cochin Port and taken into custody by the Cochin Port Trust. The goods were bonded in customs approved private bonded warehouse. Therefore, customs duty need be paid only at the time of clearance from the bonded warehouse. Before the company cleared the materials from the warehouse, the company closed its operations. The bonded periods expired and no steps were taken to renew the bonds. Therefore Customs Department sold the two consignments of bonded materials, on different dates, for an aggregate sale value of Rs.18,75,000/= and it was retained by the customs authorities. The Official Liquidator filed CA.No.490/97 for transfer of the above amount of Rs.18,75,000/= to himself as part of the assets of the Co.A.1 & 2/2003 2 company. The Assistant Collector of Customs preferred a claim of Rs.1,08,03,735/= for customs duty and allied charges due from the company on various consignments of goods imported by the company including the 43 MT zinc callots above referred to. The Official Liquidator admitted the Assistant Commissioner's claim to the extent of Rs.77,73,662/= and rejected the claim in respect of two items, aggregating to Rs.30,30,073/= as 43 MT imported zinc callots were sold by the customs authority and 50 MT zinc callots were in the custody of the Sub Court, Cochin and it was not taken possession by the Official Liquidator. The Company Court dismissed CA.No.490/1997. Once the goods were sold in auction as abandoned when the goods were not cleared from the bonded warehouse, owner cannot claim any right of the proceeds of the sale and after abandoning the items and not clearing within the bonded period, the owner cannot claim for the goods or its value. Therefore, we agree with the company court in dismissing C.A.No.490/97. But, the Company Court allowed the claim of the customs department to the tune of Rs.13,61,099/= more than the amount admitted by the Official Liquidator which represents the duty on the above goods. We are of the opinion that after appropriating the value of the goods, the customs authorities cannot claim any customs duty. In this connection, we refer to section 23(2) of the Customs Act and decision of the Bombay High Court in Mafatlal Fine Spinning & Manufacturing Co. Ltd. v. Union of India and others (1987 (27) E.L.T 19 (Bom.)). Therefore, the Company Court ought not have Co.A.1 & 2/2003 3 allowed the claim of duty in respect of the same. The Official Liquidator has allowed the claim of customs authorities to the tune of Rs.77,73,662/-. In any event, duty of the abandoned goods which was not cleared from the bonded warehouse cannot be claimed as customs authorities sold the goods as it was not cleared from the bonded warehouse within the time allowed and treated it as abandoned goods and appropriated its proceeds. Thereafter, it is not justified for claiming customs duty on that goods (43 MT of zinc callots) than that was allowed by the Official Liquidator. With regard to 50 MT zinc callots in the custody of Cochin Sub Court, claim can be filed only after disposal of the case pending in the Sub Court as ownership of the goods in question is still in dispute. Company court went wrong in allowing the claim of the customs authorities to the extent of Rs.13,61,099/= regarding the duty on 43 MT of zinc callots sold by them and 50 MT of zinc callots now under custody of the sub court. In the above circumstances, we dismiss Co.A.No.1 of 2003 and allow Co.A.No.2 of 2003. J.B.KOSHY JUDGE THOMAS P. JOSEPH JUDGE tks