The Supreme Court’s recent ruling on the applicability of Section 71 of the Customs Act, 1962 has significant implications for importers and businesses dealing with imported goods. The court held that Section 71 does not apply in cases where imported goods were stocked outside a notified public bonded warehouse with the permission of the relevant officer.
Section 71 of the Customs Act, 1962 deals with the warehousing of imported goods. It provides that imported goods may be deposited in a public warehouse without payment of duty. However, the section also specifies that the goods must be deposited in a warehouse approved by the Principal Commissioner of Customs or Commissioner of Customs. Importers must follow the procedures laid down in the Act and rules for depositing goods in a bonded warehouse to avail of the benefits under Section 71.
In the case before the Supreme Court, a portion of the Appellant’s factory premises was notified as a public bonded warehouse. The Appellant sought to stock imported goods outside the notified warehouse area with the permission of the Superintendent of Customs and Central Excise. The question before the court was whether such goods would be subject to the provisions of Section 71.
The court considered the language and intent of Section 71 in its decision. It noted that the section does not expressly prohibit the stocking of goods outside a notified warehouse with permission. The court also observed that the purpose of the provision is to facilitate the warehousing of goods without payment of duty, which can be achieved even if the goods are stored outside the notified warehouse area with permission.
The court further considered the practical implications of a strict interpretation of Section 71. It noted that importers often need to store goods temporarily outside the notified warehouse area due to various reasons, such as lack of space or security concerns. Imposing strict restrictions on such storage could hamper business operations and create unnecessary hurdles for importers.
In light of these considerations, the court held that Section 71 would not apply to cases where imported goods were stocked outside a notified public bonded warehouse with the permission of the concerned officer. The court emphasized that the permission must be obtained before stocking the goods outside the notified area to avoid any violation of the law.
The court’s ruling provides clarity on the interpretation of Section 71 and ensures that importers can stock goods outside notified warehouse areas with the necessary permissions. Importers and businesses dealing with imported goods should be aware of this decision and ensure compliance with the relevant provisions of the Customs Act, 1962 to avoid any legal issues.
