TUBETECH ENGINEERS (P) LTD Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THIS appeal relates to the claim made by the appellants for a pro rata abatement in duty consequent upon the imported goods (a consignment of seamless carbon steel tubes) being found to be damaged at the time of clearance after being warehoused by redetermination of assessable value. The claim was made on 28 -5 -1984 before the Assistant Collector (Customs), Ahmedabad. Section 22 of the Customs Act, 1962 provides for such rebate on proof of damaged or deteriorated imported goods. The Assistant Collector held that the evidence showed that the damage had occurred prior to warehousing of the goods and as per Section 22(1)(c) of Customs Act the damage not being due to default or negligence on the part of appellants, the Assistant Collector found that no abatement was permissible. The Assistant Collector's order was upheld in substance by Collector (Appeals), who found as follows :

(2.) LD . Consultant, Sh. Gopal Prasad, appearing for the appellants, contended that the Survey Reports clearly confirm that the damage was caused to the goods due to the effect of sea water while being stored on top of Hatch No. 4 of the ship and in close proximity of drums containing chemicals. This fact of the storing aboard the ship is also confirmed by the tally sheet of the Bombay Port Trust showing that the bundles were rusty and strip off. It was noted that the spillage of chemicals on the steel tubes causing further damage could not be ruled out. The Surveyor on considering these twin factors had confirmed the damage and deterioration to the goods and based thereon the German supplier had compensated them, accepting that there has been 75% damage to the goods. It was contended that the situation is covered by provisions of Section 22(1)(a) of Customs Act as it has been shown by evidence that the damage had occurred even before unloading of the goods. The Id. Consultant also cited and relied upon the Tribunal decision reported in 1985 (22) E.L.T. 161 (Tri.) - Kasturi and Sons v. Collector of Customs, to say that when once the importer has reported about damage to the goods, the Department is bound under Section 22 Customs Act to take action towards giving the abatement envisaged thereunder.

(3.) SHRI B.K. Singh, Id. S.D.R., contended that since the goods in this case had been warehoused, then they are covered by provisions of Section 22(1 )(c) as has been rightly held by the lower authorities. Ld. S.D.R. pointed out that the appellants had not brought the damage to the notice of the Customs authorities upto the stage of unloading, and, in fact, they had cleared a part of the consignment for home consumption on payment of duty without any claim that the goods had been found to be damaged at the stage of unloading. The Customs examination report before clearance of the goods has also not been available. Since the goods, in question, are warehoused goods, the provisions applicable will only be those under Section 22(1)(c) as has rightly been held by the lower authorities, urged the Id. SDR.