BAJAJ PLASTIC LIMITED Vs. COLLECTOR CENTRAL EXCISE

JUDGEMENT

(1.) M/s. Bajaj Plastic Limited, a Public Limited Company, engaged in the production of high density polyethylene power, fabrics and bags, has by this writ petition challenged the validity of the three communication. Annexure "C" dated 27th February, 1981, Annexure "E" dated 6th March, 1981 and Annexure "H" dated 6th March, 1981 issued by the Collector. Central Excise, and the Assistant Collector, Central Excise, Division No. 1, Nagpur. By these communications the facility of storing imported raw material in a private bonded warehouse of the petitioner situated within the factory premises, granted under section 58 of the Custom Act, 1962 (the Act) has been withdrawn.

(2.) The factory is situated in an "industrial area" within the meaning of section 2(g) of the Maharashtra Industrial Development Act, 1961, at a distance of about 8 kilometres from the Corporation limits of the City of Nagpur. The petitioner requires high density polyethylene moulding power and granules, which are imported under a valid import licence. With the liberalised policy of import, particularly after 1976, it became possible for the petitioner to stock such raw materials and hence big godowns were constructed which were licenced as a private bounded warehouse for storing imported raw materials without payment of duty under the Act subject to the conditions set out in the licence. The licence was granted on 4th February, 1976 and was renewed from time to time, last such renewal being from 14th January, 1981 till 3rd February, 1982. As the quantity of the raw material imported was gradually increasing, additional space for its storage was required, for which request to approve additional godown and its inclusion under the licence was made. The petitioner was informed by the Assistant Collector, Nagpur on 27th February, 1981 (Annexure C) the policy decision of the Government of India to the effect that the facility of custom bonding in the private bounded warehoused in the interior should be gradually withdrawn and fresh arrivals should be allowed to be stored only in public bonded warehouse at Bombay till such arrangements exist at Nagpur. The Collector, Central Excise, addressed a communication dated 6-3-1981. Annexure E, to the petitioner, inviting its attention to the Trade Notice No. 1/80 (Customs) dated 26-7-1980, which contained the said policy decision. On 16-3-1981, the Assistant Collector addressed a communication Annexure H, to the petitioner informing that a public bounded warehouse of M/s. Central Warehousing Corporation, Nagpur has been established in the city of Nagpur and that the fresh arrivals can be warehoused in the same and that no space certificate for bonding goods should be granted to a private bonded warehouse.

(3.) The contention of the petitioner is that the policy decision of not granting licence for a private warehouse at a particular warehousing station on the ground that public warehouse has been established at a different warehouse station is ultra vires of the letter and spirit of the Act. To examine the validity of this point it will be necessary to notice the salient provision of the Act. Duties and customers are levied at prescribed rates on the goods imported in India. Chapter VII deals with the clearance of imported goods and export goods, and Chapter IX with Warehousing. Section 57 permits appointment of public warehouses wherein dutiable goods may be deposited without payment of duty at any warehousing station. Section 5 permits licensing of private warehoused at a warehousing station wherein dutiable imported goods may be deposited without payment of duty. Section 68 deals with the procedure of entitlement for clearance of those dutiable goods from the warehouse for home consumption and section 69 with their clearance for exportation. Section 2(43) defines the term "warehouse" as meaning a public warehouse appointed under section 67 or a private warehouse licensed under section 58 and section 2(45) defines the term "warehousing station" as meaning a place declared as a warehousing station under section 9. Section 9 authorises the power to declare by a notification. In the Official Gazette places to be warehousing stations at which alone public warehouses may be appointed and private warehouses may be licensed. By Notification No. 7/74. Cus dated 9-2-1974 the Board had declared the Maharashtra Industrial Development Corporation Area, in Nagpur in the State of Maharashtra, as a warehousing station. Vide Notification No. 122-Cus dated 9-5-1981. Nagpur city was declared to be a warehousing station. M/s. central Warehousing Corporation, Nagpur, situated in the city of Nagpur, was appointed as a public bonded warehouse at that warehouse station. Notification dated 9-2-1974 continues to in force and no public warehouse has been appointed within the M.I.D.C. area. Section 58 reads thus :