M/S SBEC SUGAR LIMITED & ANR.versusUNION OF INDIA & ORS.

                    [2011) 2 S.C.R. 585


           M/S SBEC SUGAR LIMITED & ANR.                        A·
                             v.
                 UNION OF INDIA & ORS.
             (Civil Appeal No. 2899 of 2006)
                    FEBRUARY 7, 2011                            8
            [D.K. JAIN AND H.L. DATTU, JJ.]

      Customs Act, 1962 - ss. 72(1)(b), 68 and 15(1)(b) -
Imported goods improperly removed from warehouse - Rate         C
of duty - Held: When the goods are cleared from the
warehouse after the expiry of the permitted period or its
permitted extension, the goods are deemed to have been
improperly removed u/s. 72(1)(b) - Rate of duty has to be
computed according to the rate applicable on the date of
expiry of the permitted period u/s. 61 - Section 15(1 )(b)      D
whereby rate of duty is computed according to the rate and
valuation applicable on the date on which goods are actually
removed from the warehouse, would be applicable only when
the goods are cleared from the warehouse u/s. 68, within the
initially permitted period or during the permitted extended     E·
period - On facts, benefit of exemption from payment of duty
in terms of the Export Promotion Capital Goods Scheme was
not available to the importer because after the expiry of the
warehousing period, the goods had been removed u/s. 72 and
not uls. 68 and, thus, s. 15(1)(b) had no application.          F

     Appellant No: 1 imported certain capital goods for its
 sugar manufacturing unit. Appellant No. 1-importer opted
·for getting these goods warehoused under Bond. The
 importer made an application for extension of the bond         G
 period in respect of all the said consignments and the
 same was rejected. Meanwhile, the Central Government
 extended the Export Promotion Capital Goods Scheme
 (EPCG) Scheme to Agro based Industries. The capital
 goods used in the manufacture of agro-products, like
                            585                                 H
    586      SUPREME COURT REPORTS            [2011] 2 S.C.R

A   sugar and covered under EPCG licence were exemptecl .-
    from the payment of whole of the customs duty, and .
    additional duty leviable in term$ of Section 3 of the
    Customs Act, 1962. The Superintendent of Customs
    raised the demand u/s. 72 of the Act directing the
B   importer to clear the goods covered under the Bond on
    payment of full duty of customs and other charges within
    stipulated period. Appellant No. 1 acquired licence under
    the EPCG Scheme, and filed three bills of entry for ex·
    bond clearance for home consumption of the goods lying
c   in the warehouse. By that time the bond period had
    expired and demand for payment of full amount of
    customs duty chargeable on account of goods lying in
    the warehouse, along with interest, penalty etc. had
    already been raised against the importer. Appellant No.
0   1 made a representation to the Chief Commissioner of
    Customs stating that since zero duty was chargeable on
    the goods under the EPCG licence, no interest could be
    levied but the same was rejected. Appellant No. 1 filed a
    writ petition challenging the demand for interest in
E   respect of the three consignments. The Assistant
    Commissioner of Customs confirmed the levy of duty
    and interest. The High Court passed an interim order
    directing the respondents to permit the importer to
    remove the consignments on their executing a bond
    without payment of interest but on payment of other
F   charges. Appellant No. 1 challenged the confirmation
    order. The High Court dismissed the writ petition. It
    directed the department to finally assess the custom duty
    and other charges payable by the appellant in respect of
    goods covered under subject bills of entry. Therefore, the
G   appellants filed the instant appeals.
          Dismissing the appeals, the Court

     HELD: 1.1 From a bare reading of Section 61 of the
H Customs Act, 1962, It Is manifest that warehousing is
-
    SBEC SUGAR LIMITED & ANR. v. UNION OF INDIA & 587
                       ORS.
    permissible for a limited period, as contemplated under A,.
    sub-sections (1 )(a) and (1 )(b) of Section 61; and such
    period is extendable on showing sufficient cause for the
    same. However, by operation of sub-section (2), interest
    on the amount of duty is payable from the period of expiry
    of-the permissible period till the date of clearance from B
    the warehouse, regardless of whether the goods have
    remained in the warehouse beyond the permitted periods
    by reasons of extension or otherwise. [Para 19] [597-H;
    598-A-B]

        Kesorarn Rayon vs. Collector of Customs, Calcutta C
    (1996) 5 sec 576 - relied on.
                 '

           1.2 Se'ction 68 deals with the clearance of
    warehoused -goods for home consumption and provides
    that an importer of any warehoused goods may clear the D
    goods for home consumption if: (1) a bill of entry for
    home consumption of the said goods has been presented
    in the prescribed form, (ii) the import duty leviable on such
    goods, all penalties, rent, interest and other charges
    payable in respect of such goods have been paid, and E
    (iii) the proper officer has made an order for the clearance
    of such goods. In relation to goods cleared under Section
    68, Section 15(1)(b) of the Act provides that the rate of
    duty shall be computed according to the rate and
    valuation applicable on the date on which goods are F
    actually removed from the warehouse. [Para 20] [598-C-
    E]
         D.C.M and Anr. vs. Union of India and Anr. 1995 Supp
    (3) sec 223 - relied on.
                                                                G
        1.3 It is plain that Section 15(1) (b) would be applicable
    only when the goods are cleared from the warehouse
    under Section 68 of the Act, i.e., within the initially
    permitted period or during the permitted extended period.
    When the goods are cleared from the warehouse after the H
    588     SUPREME COURT REPORTS               [2011) 2 S.C.R

A expiry of the permitted period or its permitted extension.
  the goods are deemed to have been improperly removed
  under Section 72(1) (b) of the Act, with the consequence
  that the rate of duty has to be computed according to the
  rate applicable on the date of expiry of the permitted
B period under Section 61. [Para 23] (600-C-E]

       1.4 While it is true that Condition 6 of the licence
  granted under the EPCG Scheme was valid against
  goods which had already been shipped but not cleared,
C but, the benefit of exemption granted under the Scheme
  to the already imported goods would be available only In
  respect of those goods which are cleared under Section
  68 of the Act. Any other interpretation of the said clause
  would render Section 72 otiose, and would result in the
  said Scheme operating as an amnesty scheme, granting
D an unintended and undue advantag~ to the importer,
  which is ordinarily to be avoided. It is a cardinal principle
  of construction that the provisions of a Notification have
  to be harmoniously construed as to prevent any conflict
  with the provisions of the Statute. The decision of the
E High Court cannot be faulted with. (Paras 24 and 25] (600-
  F-H; 601-A-C]

      State of °Maharashtra and Ors. vs. Swanstone Multiplex
  Cinema Private Limited (2009) 8 SCC 235; Gudur Kishan
F Rao and Ors. vs. Sutirtha Bhattachaarya and Ors. (1998) 4
  SCC 189; Kesoram Rayon vs. Collector of Customs, Calcutta
  (1996) 5 sec 576 - relied on.

        Pratibha Processors and Ors. vs. Union of India and Ors.
    (1996) 11 sec 101 - distinguished.
G
                        Case Law Reference:
      (1996) 5 sec 576           Relied on        Paras 19, 25
      1995 Supp (3) SCC 223 Relied on             Para 20
H
~BEC SUGAR LIMITED & ANR. v. UNION OF INDIA & 589
                          ORS.

  (2009) 8 sec 235            Relied on         Para 24           A
  (1998) 4 sec 189            Relied on         Para 24
  (1996) 11 sec 101           Relied on         Para 25

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.               B
2899 of 2006.

    From the Judgment & Order dated 03.04.2006 of the High
Court of Judicature at Bombay in Writ Petition No. 775 of 1998.

                               WITH                               c
C.A. No. 2900 of 2006.

    S. Ganesh, Rohina Nath, Priyadeep, Umesh Kumar
Khaitan for the Appellants.                    ·
                                                                  D
    Harish Chander, Arijit Prasad, Anil Katiyar, B. Krishna
Prasad for the Respondents.
    The Judgment of the Court was delivered by

      D.K. JAIN, J. 1. These appeals, by grant of leave, are E
directed against the judgments and orders dated 3rd April; .
2006 delivered by the High Court of Bombay, whereby the High
Court has dismissed the two writ petitions (Nos. 775 and 4173
of 1998) filed by the appellants herein, and has directed the
Assistant Commissioner of Customs, Bond Department to F
finally assess the customs duty and other charges payable by
the appellants in respect of the goods covered under the
subject bills of entry. The High Court has further directed that if
the payment of customs duty, interest and other charges is not
made by the appellantcompany within two weeks from the date G
of such determination and communication thereof, the customs
authorities shall enforce the bond executed by the company,
pursuant to the interim order passed by the Court.
    2. As a common question of law is involved in the appeals
                                                                  H
                                                                        -
   590      SUPREME COURT REPORTS                 [2011) 2 $.C.R ·


A and in fact the latter order is based on the former, these are
  being dis.,osed of by this common judgment. However, in order
  to appreciate the controversy involved, for the sake of
  convenience, the facts emerging from C.A. No.2899/2006 are
  being adverted to. These are:
B     Appellant No. 1 (hereinafter referred to as "the importer")
    a body corporate; is engaged in the manufacture of sugar.
    Appellant No.2 is the Vice-President of the first appellant. With
    a view to set up a sugar manufacturing unit, the importer
    imported certain capital goods. Instead of getting the goods
C released for home consumption, the importer opted for getting
    these goods warehoused under Bond. The present appeal is
    confined to three consignments under Bond No. CW-20-4732 .
    dated 26th December, 1995; CW-20-4 733 dated 26th
    December, 1995 and CW-20-484~ dated 2nd January, 1996,
D which were to expire respectively on 25th December, 1996,
    25th December, 1996 and 1st January, 1997. It is pertinent to
    note that on the original bonds and the bills of entry, the
 .· Assistant Commissioner of Customs made an endorsement for
    payment of interest @ 20% per annum from the date of expiry
E of the bond.
       3. On 19th December, 1996, the importer made an
  application for extension of the bond period by six months in _
  respect of all the afore-mentioned consignments. However, the
  said request was rejected by the Assistant Commissioner of
F Customs vide letter dated 13th January, 1997 on the ground
  that the application was not received in the Bond department
  at least 15 days before the expiry of the current period of bond
  and was also not accompanied by an examination certificate
  by the Customs Officer/staff of the warehouse, the mandatory
G terms and conditions stipulated in para 2(i)(iii) of the Public
  Notice No.102/96 dated 5th June, 1996. Notwithstanding,
  rejection of prayer for extension of Bond period, the importer
  continued making representations dated 21st January, 1997;
  21st April, 1997; 20th May, 1997, 26th May, 1997 and 27th·
H Mav. 1997 to the respondents, requesting for re-consideration
-
    SBEC SUGAR LIMITED & ANR. v. UNION OF INDIA & 591
                 ORS. [DX. JAIN, J.]
    of their request for extension of bond period and not to issue       A
    notice for auction of the goods.

         4. In the meantime, vide notification No.29/97 dated 1st
    April, 1997, issued under Section 25(1) of the Customs Act,
    1962 (for short "the Act"), the Central Government extended the B
    Export Promotion Capital Goods Scheme (for short "the EPCG
    Scheme") for the period 1997-2002 to Agro based Industries.
    The effect of the notification was that the capital goods used
    in the manufacture of agro-products, like sugar and covered
    under EPCG licence, were exempted from the payment of C.
    whole of the customs duty, and additional duty leviable in terms
    of Section 3 of the Act, w.e.f. 1st April, 1997. Para 6.6 of
    Chapter 6 of the Exim Policy, containing the EPCG Scheme
    provided that:
        "The licence issued under this scheme shall be valid for         D
        the goods already shipped/arrived provided customs duty
        has not been paid and the goods have not been cleared
        from Customs."
         5. On 22nd August, 1997, a licence under the EPCG
    Scheme, allowing concessional duty at tile rate of 10% was           E
    issued to the importer. On an application by the importer, the
    said licence was rectified and endorsed as "zero duty."

         6. Vide order dated 26th September, 1997, issued under
    Section 72(1) of the Act, the Superintendent of Customs              F
    directed the importer to clear the goods covered-under Bond
    No. CW-20-4842 dated 2nd January, 1996 on payment of full
    duty of customs and other charges within a period of 15 days.
         7. On 14th January, 1998, the importer executed a bond          G
    and furnished a bank guarantee for 100% of the duty saved as
    required under Notification No. 29/97 dated 1st April, 1997.
    Having acquired licence under the EPCG Scheme, on 21st
    January, 1998, the importer filed three bills of entry for ex-bond
    clearance for home consumption of the goods lying in the             H
                                                                       -
    592      SUPREME COURT REPORTS                 [2011] 2 S.C.R


A warehouse. As afore-stated, by that time the bond period in
  respect of the three consignments had expired and demand for
  i:-ayment of full amount of customs duty chargeable on account
  of goods lying in the warehouse, along with interest, penalty etc.
  had already been raised against the importer. On 5th,_ and 9th
B February, 1998, the importer made a representation to the Chief
  Commissioner of Customs stating that since zero duty was
  chargeable on the goods under the EPCG licence, there was
  no question of levy of interest thereon.

       8. Vide letter dated 17th March, 1998, the Deputy
C Commissioner of Customs informed the importer that its
  request for waiver of interest had been rejected. Being
  aggrieved, on 3rd April, 1998, the importer preferred a writ
  petition (Writ Petition No. 775/1998) before the High Court
  questioning the demand for interest in respect of the three
D consignments.

       9. On 30th March, 1998, thei Assistant Commissioner of ,
  Customs issued an order, confirming the levy of duty and
  interest amounting to '1,01,03,535/-, together with interest at
E 20% p.a., which order, according to the appellants, was
  received by them on 7th April, 1998.                   '

       · 10. On 29th April, 1998, the High Court passed an interim
    order directing the respondents to permit the importer to
    remove the consignments on their executing a bond without
F   payment of interest but on payment of other charges.

      11. On receiving the confirmation letter dated 30th March,
  1998, the importer sought to impugn the said confirmation order
  by amending the Writ Petition by filing Chamber Summons No.
G 72/1998 on 5th August, 1998.

         12. As afore-mentioned, the High Court has dismissed the
    writ petition, inter alia, observing:

          "19. In the backdrop of the aforesaid legal position
H
-
    SBEC SUGAR LIMITED & ANR. v. UNION OF INDIA & 593
                 ORS. [D.K. JAIN, J.]
       exposited by the Supreme Court in Kesoram Rayon, when A
       we turn to the facts of the present case, it would be seen
       that the bond period expired in respect of two bonds on
       25th December, 1996 and with regard to third bond on 1st
       January, 1997. Undisputedly, the application for extension
       of bond period made on 19th December, 1996 by the B .
       company was rejected on 13th January, 1997. That the
       demand under Section 72 was raised by the Proper
       Officer on 26th June, 1997 to pay amount of duty
       chargeable on account of the subject goods lying in the
       bonded warehouse after expiry of bonded period is not in C
       dispute. As a matter of fact, the petitioners have not
       challenged the said demand made under Section 72 of the
       Customs Act vide notice dated 26th January, 1997. On
       expiry of bond period, as aforenoticed, the subject goods
        are treated to have been improperly removed under D
        Section 72 from the warehouse. That improper removal
        took place even when the goods remained in the
       warehouse beyond the permitted period of permitted
        extension. Thus, at the time the bills of entry were filed by
        the company on 21st January, 1998, the Proper Officer was
        justified in computing the duty from the date of expiry of E
        the bond period and the interest payable thereon. As a
        matter of fact the company was aware that the duty has ·
        been calculated by the concerned Officer along with
        interest on the reverse of the bill of entry butthis fact has
        been suppressed.                                              .F

       20. The edifice has been built on erroneous premise in the
       writ petition that no· duty was payable on the goods and
       since no duty was payable on the goods no interest could
       be levied or demanded as interest is only the accessory       G
       to the principal and if the principal is not payable the
       interest is not payable. In challenging the demand of
       interest, the petitioners has misrepresented that the duty
       was not payable by virtue of notification dated 1st April,
                                                                     H
    594       SUPREME COURT REPORTS                  [2011) 2 S.C.R.


A         1997 and the licence issued to the company under EPCG
          scheme and endorsement made thereon of zero duty.

          21. Having noticed the facts above, we have no hesitation
          in holding that the provisions of Section 68 and
          consequently of Section 15(1 )(b) have no application
B
          since the goods were not cleared from the warehouse
          within the bond period. Admittedly, no extension was
          granted. By reason of goods having remained in the
          warehouse beyond 25th December, 1996 insofar as two
          consignments were concerned and beyond 1st January,
c         1997 with regard to the third consignment, the goods shall
          be deemed to have been improperly removed from the
          warehouse under Section 72 and the Proper Officer was
          justified in calling upon the company to pay the customs
          duty on them as may be payable at the rate applicable at
D         the rate on the date on which the bond period expired. As
          a matter of fact, there is no challenge to the demand made
          under Section 72 on 26th September, 1997 calling upon
          the company to pay full amount of duty chargeable on
          account of the subject goods together with penalties, rent,
E         interest and other charges. We are surprised that the
          respondents permitted the company to remove the goods
          on execution of bond alone though by the order dated 29th
          April, 1998 what the Court permitted the petitioners was
          to remove the goods on their executing bond without
F         payment of interest but on payment of other charges. In
          other words, as per the interim order dated 29th April,
          1998 passed by this Court, save and except, demand of
          interest, the company was liable to pay all other charges
          including the full amount of duty together with other charges
G         as demanded vide notice dated 26th September, 1997.ft

          13. As stated above, following this order, the second writ
    petition was also dismissed.

          14. Hence, the present appeals.
H
--
     SBEC. SUGAR LIMITED & ANRs:v. UNION OF INDIA & 595
                   ORS; [D.K. JAIN, J.]
           15. Mr. S. Ganesh, learned senior counsel appearing on A
     behalf of the appellants, strenuously urged that the impugned
     judgments are clearly erroneous in light of the judgment of this
     Court in Pratibha Processors & Ors. Vs. Union of India & Ors. 1
     wherein this Court had observed that if by operation of an
     exemption, the goods cleared were duty free and if no duty was s
     recoverable on the imported goods at the time of clearance,
     no interest was payable thereon under Section 61 (2) of the Act.
     It was strenuously argued that in the instant case the goods
     were cleared from the warehouse under Section 68 and had
     not been removed on the basis of an order under Section 72 c
     of the Act and, therefore, having regard to the provisions of
     Section 15(1 )(b) of the Act, by virtue of the exemption
     notification No.29/97, on the date of removal of the goods, no
     duty was payable thereon. It was asserted that reliance on the
     decision of this Court in Kesoram Rayon' Vs. Collector of
                                                                      0
      Customs, Ca/cutta2 by the High Court was clearly misplaced
     because unlike in the present case, the goods in that case had
     been removed on the basis of the order under Section 72 of
     the Act.

            16. Per contra, Mr. Harish Chander, learned senior counsel   E
      appearing on behalf of the respondents, while supporting the
      impugned judgments contended that the benefit of exemption
      from payment of duty in terms of the EPCG Scheme was not
      available to the importer because after the expiry of th~
      warehousing period, the goods had been removed under               F
      Section 72 and not under Section 68 of the Act and therefore,
     ·Section 15(1)(b) of the Act had no application. It was stressed
      that the removal of all the consignments in question was by
      virtue of demand notice dated 26th September, 1997, which
      was admittedly not questioned in the writ petition filed on 3rd    G
      April, 1998 and therefore, the dictum laid down in Kesoram
      Rayon (supra) was squarely applicable on the facts• of the
      present case.
     1.   (1996) 11 sec 101.
     2.   (1996) 5 sec 576.                                              H
    596         SUPREME COURT REPORTS                [2011] 2 S.C.R.

A        17. Having considered the matters in the light of the
    statutory provisions, we are of the considered opinion that there
    is no merit in these appeals.

         18. Section 61 of the Act prescribes the period for which
    goods may remain warehoused. In so far as is relevant, it reads
8
    as follows:

          "61. Period for which goods may remain warehoused.-
          (1) Any warehoused goods may be left in the warehouse
          in which they are deposited or in any warehouse to which
C         they may be removed,-

          (a)    in the case of-

          (i)    non-consumable store; or

D         (ii) goods intended for supply to a foreign diplomatic
          mission; or

          (iii) goods intended for use in any manufacturing process
          or other operations in accordance with the provisions of
E         Section 65; or

          (iv) goods intended for use in any hundred per cent
          export-oriented undertaking; or

          (v)    goods which the Central Government may, if it is.
F         satisfied that it is necessary or expedient so to do, by
          notification in the Official Gazette, specify for the purposes
          of this clause,

          till the expiry of one year.

G               Explanation.-For the purposes of sub-clause (iv),
          'hundred per cent export-oriented undertaking' has the
          same meaning as in Explanation 2 to sub-section (1) of
          Section 3 of the Central Excises and Salt Act, 1944 (1 of
          1944);
H
 SBEC SUGAR LIMITED & ANR. v. UNION OF INDIA & 597
              ORS. [D.K. JAIN, J.]
      (b) in the case of any other goods, till the expiry of three    A
      months, after the date on which the proper officer made
      an order under Section 60 permitting the deposit of the
      goods in a warehouse:

      Provided that-
                                                                      B


      (ii) in the case of any goods which are not likely to
      deteriorate, the aforesaid period of one year or three
      months, as the case_ may be, may, on sufficient cause           c
      being shown, be extended by the Collector of Customs for
      a period not exceeding six months and by the Board for
      such further period as it may deem fit:


                                                                      D
      (2) Where any warehoused goods remain in a warehouse
      beyond the period of one year or three months specified
      in clause (a) or clause (b) of sub-section (1) by reason of
      the extension of the aforesaid period or otherwise; interest
      at such rate, not exceeding eighteen per cent per annum         E
      as is for the time being fixed by the Board, shall be payable
      on the amount of duty on the warehoused goods for the
      period from the expiry of the period of one year or, as the
      case may be, three months, till the date of the clearance
      of the goods from the warehouse:                                F

      Provided that the Board may, if it considers it necessary
      so to do in the public interest, waive, by special orde'r and
      under circumstances of an exceptional nature to be
      specified in such order, the whole or part of any interest
      payable under this sub-section in respect of any                G
      warehoused goods."

       19. From a bare reading of the afore-extracted Section, it
  is manifest that warehousing is permissible for a limited period,
- as contemplated under sub-sections (1 )(a) and (1 )(b) of           H
                              '
    598       SUPREME COURT REPORTS                [2011] 2 S.C.R.

A Section 61; and such period is extend able on showing
  sufficient cause for the same. However, by operation of sub-
  section (2), interest on the amount of duty is payable from the
  period of expiry of the permissible period till the date of
  clearance from the warehouse, regardless of whether the goods
B have remained in the warehouse beyond the permitted periods
  by reasons of extension or otherwise. [See: Kesoram Rayon
  (supra)]
        20. Section 68 deals with the clearance of warehoused
  goods for home consumption and provides that an importer o'f
C any warehoused goods may clear the goods for home
  consumption if : (i) a bill of entry for home consumption of the
  said goods has been presented in the prescribed form, (ii) the
  import duty leviable on such goods, all penalties, rent, interest
  and other charges payable in respect of such goods have been
D paid, and (iii) the proper officer has made an order for the
  clearance of such goods. In relation to goods cleared under
  Section 68, Section 15(1)(b) of the Act provides that the rate
  of duty shall be computed according to the rate and valuation
  applicable on the date on which goods are actually removed
E from the warehouse. (See: D.C.M & Anr. Vs. Union of India &
  Anr. 3).
       21. Section 72 of the Act, which is relevant for our purpose,
  provides for the consequences for improper removal of goods
F from warehouse. It reads thus:
          "72. Goods improperly removed from warehouse, etc.-
          (1) In any of the following cases, that is to say,- •
          (a) where any warehoused goods are removed from a
G         warehouse in contravention of Section 71;
          (b) where any warehoused goods have not been removed
          from a warehouse at the expiration of the period during
          which such goods are permitted under Section 61 to
H   3.   1995 Supp (3)   sec 223.
SBEC SUGAR LIMITED & ANR. v. UNION OF INDIA & 599
             ORS. [D.K. JAIN, J.]
    remain in a warehouse;                                           A
    (c) where any warehoused goods have been taken under
    Section 64 as samples without payment of duty;
    (d) where any goods in respect of which a bond has been
    executed under Section 59 and which have not been                B
    cleared for home consumption or exportation are not duly
    accounted for to the satisfaction of the proper officer,
    the proper officer may demand, and the owner of such
    goods shall forthwith pay, the full amount of duty               c
    chargeable on account of such goods together with all
    penalties, rent, interest and other charges payable in
    respect of such goods.
    (2) If any owner fails to pay any amount demanded under
    sub-section (1 ), the proper officer may, without prejudice      D
    to any other remedy, cause to be detained and sold, after
    notice to the owner (any transfer of the goods
    notwithstanding) such sufficient portion of his goods, if any,
    in the warehouse, as the said officer may select.•
                                                                     E
     22. The scope and purport of Section 72 was examined
by this Court in Kesoram Rayon (supra). It was held that:
    "13. Goods which are not removed from a warehouse
    within the permissible period are treated as goods F
    improperly removed from the warehouse. Such improper
    removal takes place when the goods remain in the
    warehouse beyond the permitted period or its permitted
    extension. The importer of the goods may be called upon
    to pay customs duty on them and, necessarily, it would be
    payable at the rate applicable on the date of their deemed G
    removal from the warehouse, that is, the date on which the
    permitted period or its permitted extension came to an end.
    14. Section 15(1)(b) applies to the case of goods cleared '
    under Section 68 from a warehouse upon presentation of H
      600      SUPREME COURT REPORTS                  [2011) 2 S.C.R.


  A         a bill of entry for home consumption; payment of duty,
            interest, penalty, rent and other charges; and an order for
            home clearance. The provisions of Section 68 and,
            consequently, of Section 15(1)(b) apply only when goods
            have been cleared from the warehouse within the permitted
  B         period or its permitted extension and not when, by reason
            of their remaining in the warehouse beyond the permitted
            period or its permitted extension, the goods have been
            deemed to have been improperly removed from the
            warehouse under Section 72."
  c        23. We respectfully concur with the enunciation of law on
      the point. It is plain that Section 15(1 )(b) would be applicable
      only when the goods are cleared from the warehouse under
      Section 68 of the Act, i.e., within the initially permitted period
      or during the permitted extended period. It is trite to say that
· D . when the goods are cleared from the warehouse after the expiry
      of the permitted period or its permitted extension, the goods
      are deemed to have been improperly removed under Section
      72(1)(b) of the Act, with the consequence that the rate of duty
      has to be computed according to the rate applicable on the date
  E of expiry of the permitted period under Section 61.

         24. While it is true that Condition 6 of the licence granted
    under the EPCG Scheme was valid against goods which had
    already been shipped but not cleared, but, we have no
  F hesitation in holding that the benefit of exemption granted under
    the Scheme to the already imported goods would be available
    only in respect of those goods which are cleared under Section
    68 of the Act. In our opinion, any other interpretation of the said
    clause would render Section 72 of the Act otiose, and would
    result in the said Scheme operating as an amnesty scheme,
  G granting an unintended and undue advantage to the importer,
    which is ordinarily to be avoided. (See: State of Maharashtra
    & Ors. Vs. Swanstone Multiplex Cinema Private Limited)4. It
    is also a cardinal principle of construction that the provisions

  H 4. c2ooe) a sec 2as.
  SBEC SUGAR LIMITED & ANR. v. UNION OF INDIA & 601
               ORS. [D.K. JAIN, J.]
 of a notification have to be harmoniously construed as to            A
 prevent any conflict with the provisions of the Statute. (See:
 Gudur Kishan Rao & Ors. Vs. Sutirtha Bhattachaarya & Ors. 5.)

       25. We are, therefore, of the opinion that the decisi~n in
  Pratibha Processors (supra) on which heavy reliance is placed       8
  by learned counsel for the appellants, is clearly distinguishable
  on facts inasmuch as apart from the fact that in that case .the
  clearance of goods was under Section 68 of the Act, the import
  of S~ction 72(1)(b) of the Act was not considered. On the
  contrary, the dictum laid down in Kesoram Rayon (supra) is
  on all fours on facts at hand, and therefore, the decision of the   C
, High Court cannot be faulted with.

      26. For the fore-going reasons, the appeals, being devoid
 of any merit, are dismissed with costs quantified at Rs. 25,000/
 -.                                                                   D

 N.J.                                        Appeals dismissed.




 5.   (1998) 4 sec 189.