Law: Customs Act, 1969

Section: 27

[Customs Act IV of (1969)]......Sections 27(1), 27(2), 84 & 708 - Payment of duties - Demand of - Validity - Assessee Imported consignment of 439 cases of Textile Machinery - Bill of entry Machinery not placed then in warehouse- 26 cases burnt and destroyed by live - Notice for recovery of duty on destroyed cases - Appeal dismissed by Member Judicial C.B.R. and also by Tribunal with directions to collector of Customs to take up matter with C.B.R. for grant of special exemption u/s 20 of Customs Act- Reference to High Court u/s 196 of Act rejected by Tribunal - Notice for payment of out-standing duty during pendency of reference application of assessee Constitutional petition - Scope of Section 27(1) of Act - Question of law - Whether section 108 of Act refers to sub-section ( 1) of Sect/on 27 and applicable in case of assessee - Held no - Whether demand of customs duty on goods which were not In possession of assessee or even cleared or even not placed in warehouse; but were destroyed by fire due to some unavoidable circumstances, was Illegal and without jurisdiction - Held yes. The other contention raised by the learned counsel for the petitioner that the respondents have acted Illegally In applying section 27(1) rather than section 27(2) of the Act, Is equally well-founded. Section 108 of the Customs Act, refers to subsection (2) of section 27 which provides method tor valuation of the goods. It neither refers to subsection (1) nor has the same been made applicable by reference. Section 27(1) of the Act, is, therefore, in any case, not attracted. It is also pertinent to mention that admittedly 28 cases of machinery which were lying at the port and were destroyed by fire at the time when the petitioner had filed bill of entry but the goods had not been cleared or removed to a warehouses. The petitioner was in no way responsible for the fire which occurred due to some unavoidable circumstances as has been found by the Tribunal itself. The goods were not in possession or control of the petitioner at that time and have. as a matter of fast not even cleared the customs barrier. In these circumstances, it is highly anomalous to demand the payment of customs…

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