2024-VIL-1620-CESTAT-AHM-CU
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CUSTOMS CESTAT Cases

Customs - Bonded Warehouse, Revenue Neutrality, Extended Period of Limitation – Appellant obtained a private bonded warehouse license under Section 58 of the Customs Act, 1962 and a license under Section 65 for undertaking manufacturing and other operations in bond - Appellant carried out manufacturing activities outside the bonded warehouse premises within their registered Central Excise factory - appellant's request to include the entire manufacturing premises under the bonded warehouse license was accepted by the Revenue - later Revenue issued SCNs demanding Customs duty, claiming that the appellant had violated the conditions of the exemption notification by not carrying out manufacturing within the bonded warehouse - Whether the amendment to the bonded warehouse license in 2017 should be given retrospective effect from the date of the original license in 2014 – HELD - the amendment to the Bonded warehouse license in 2017 should be treated as a curative amendment and given retrospective effect from the date of the original license in 2014 - various judicial precedents has held that any amendment to a license should be given retrospective effect from the date of the original license, especially when the conditions imposed earlier were impracticable and the Revenue had full knowledge of the appellant's activities. Since the Revenue had not pointed out any misdemeanor or diversion of goods, and the purpose of the exemption notification was achieved, the demands made by the Revenue would not survive – Further, the extended period of limitation under Section 28(4) cannot be invoked in the present case, as the appellant's activities were carried out with the knowledge and approval of the Customs/Excise authorities, and there was no case of any short payment or short levy of duty due to suppression of facts - extended period of limitation cannot be invoked when the activities were carried on with the approval of the Department - the demands made by the Revenue would not survive and set aside – the appeal is allowed
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