Holding

Goods deemed improperly removed under s.72 are liable to customs duty at the rate in force on the date the permitted warehousing period (or its extension) expired, and s.15(1)(b) does not apply because it pertains only to goods cleared under s.68 within the permitted period.

Summary

Kesoram Rayon imported 832 bales of rayon grade wood pulp and warehoused them in its private bonded warehouse on 16 June 1984 for a permitted period of three months under s.61(1)(b) of the Customs Act. The permitted period expired on 15 September 1984, but the goods remained in the warehouse without an extension. A demand notice under s.72(1) was issued on 8 May 1985, and the goods were finally removed between 29 June and 2 July 1985. The appellant argued that, because a March 1985 exemption notification exempted pulp from duty and s.15(1)(b) fixes the duty rate on the date of actual removal, no duty should be payable. The Tribunal held otherwise, and the appellant appealed. The Supreme Court held that goods remaining beyond the permitted period are deemed improperly removed under s.72 and are liable to duty at the rate applicable on the date the permitted period expired, and that s.15(1)(b) does not apply because it governs only goods cleared under s.68 within the permitted period. Consequently, the appeal was dismissed.

Issues considered

The rate of customs duty applicable to goods that remain in a bonded warehouse beyond the permitted period and are deemed improperly removed under s.72.
Whether s.15(1)(b) of the Customs Act applies to such goods, allowing the duty rate on the actual removal date or exemption to be used.
Whether interest is payable on the duty for the period after the permitted warehousing period under s.72(2).

Legislation cited

Customs Act, 1962s. 15(1)(b), s. 46, s. 47, s. 59, s. 60, s. 61(1)(b), s. 62, s. 68, s. 72(1)(b), s. 72(2)
Customs Tariff Act

Subjects

customs dutybonded warehouseSection 72Section 15warehousing periodexemption notificationinterest on dutyimproper removal

Judgment

KESORAM RAYON (A UNIT OF M/S. KESORAM INDUSTRIES A
LTD.)
v.
"r THE COLLECTOR OF CUSTOMS, CALCUTTA
~

AUGUST 23, 1996 B
(S.P. BHARUCHA AND S.C. SEN, J.]

Customs Act, 1962 :
'
~

Ss. 61(1)(b), 72-Warehoused goods-Levy of Customs duty on- c
Goods not removed from bonded warehouse within pennitted period-field,
are goods improperly removed from warehouse-<:ustoms duty thereon would
• be payable at the rate applicable on the date of their deemed removal from
the warehouse i.e. the date on which the pennitted period or its pennitted
extension came to an end-Interest on the amount of duty would be payable D
for the period from the expiry of pennitted period till the date of clearance of
goods from the warehouse-There is nothing on record to indicate that
clearance ofgoods u/s. 68was ordered--S.IS(l)(b) has, therefore, no applica-
tion.

The appellants imported certain bales of rayon grade wood pulp and E
got them warehoused in its private bonded warehouse on 16.6.1984 for a
period of three months under the provisions of s. 61 (1) (b) of the Customs
Act, 1962. Some of the bales remained in the warehouse after the period
·" of warehousing came to an end on 15.9.1984. A demand notice under
s.72(1) of the Act was issued to the appellants stating that the said bales F
remained in the bonded warehouse beyond the prescribed period though
the period of warehouse had not been extended and, therefore, the appel-
!ants became liable to pay, in respect of the said bales, customs duty,
countervailing duty and interest from 16.9.1984 till the date of their
..., removal from the bonded warehouse under the provisions of s. 72(1)(b) .
On 30.5.1985 the appellants filed a bill of entry for ex-bond clearance of G
the said bales for home consumption. On 25.6.1985 the appellants were
served with an order stating that the bonded warehouse would with treated
as de-licensed. The bales were directed not to be cleared on ex-bond bill of
entry as it was not a case of clearance under s. 68 of the Act, but on
realisation of charges under s. 72. H
77
78 SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.

A The goods were remov1~d between 29th June and 2nd July, 1985.
Meanwhile, by virtue of an exemption notification dated 17.3.1985, pulp
derived from vegetable fibre was exempted from payment of customs and
additional duties.
.....

The appellants claimed that in view of s.15(l)(b) of the Act, the rate
B of Customs duty in force on the date of removal of the goods from the
bonded warehouse was the applicable rate and, by virtue of the exemption
notification, no duty was paya hie thereon. The Customs authorities as also
the Customs, Excise and Gold (Control) Appellate Tribunal negatived the
claim of the appellants. Aggrieved, the appellants filed the present appeal. ,..,
c
Dismissing the appeal, this Court

HELD : 1. Goods which are not removed from a warehouse within
the permissible period, are by virtue of s.72 of the Customs Act, 1962,
treated as goods improperly removed from the warehouse. Such improper
D 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 removal from
the wart:house, that is, the date on which the permitted period or its
E permitted extension came to an end. When the duty is in fact demanded is
not relevant. [88-D-E; 89-D]

2.1. The provisions of Section 68 of the Customs Act, 1962 and,
consequently, of Section 15(1) (b) apply only when goods have been cleared
from tht~ warehouse within t!he permitted period or its permitted extension
F and not when, by reason of their remaining in the warehouse beyond the
period or its permitted exte111sion, the goods have been deemed to have been
improp1!rly removed from the warehouse under Section 72. [88-F-G]

2.:?. The permitted period for warehousing the goods, in the instant
G case, came to an end on 15th September, 1984, but the same remained in
the bonded warehouse thereafter. The goods by reason of the provisions of
Section 72, were deemed to have been improperly removed from the bonded
wa~ho11se on that day and subject to duty at the rate then in force. [89-A-B]

2.3. The order dated 25th June, 1985, pertaining to the appellant's
H private bonded warehouse, rightly made it clear that the said bales had not
KESORAM RAYON v. COLLECTOR OF CUSTOM 79

been cleared therefrom on an ex-bond bill of entry und.er Section 68 but A
under Section 72. While the appellants may have filed an ex-bond bill of
._, entry pertaining to the said bales on 30th May, 1985, there is nothing on
record that suggests that clearance thereon under Section 68 was ordered.
'
Section 15(1)(b) has, therefore, no application. [89-B-C]

D.C.M. andAnr. v. Union of India andAnr., [1995] Supp. 3 SCC 223, B
held inapplicable.
.l

2.4. The Tribunal while taking the view that the rate applicable to the

- said bales was the rate applicable on the date the into-bond bill of entry in
respect thereof was filed, failed to take into account the fact that the said
bales were permitted to be warehouse and that during the permitted period c
of three months the appellants could have sought an extension. It also does
not take note of the terms of Section 72(1)(b); the said bales would be
r treated as having been improperly removed from the bonded warehouse
only when they were not removed therefrom on the expiration of the per-
mitted period of three months. Since there was no change in the rate of D
duty during those three months, there is no alteration of the appellants'
liability. [89-E·G]

3. By reason of sub-section (2) of s. 72, interest is payable on the amount
of duty on the warehoused goods for the period from the expiry of the permitted
periods till the date of their clearance from the warehouse, regardless of E
whether the goods have remained in the warehouse beyond the permitted
periods by reason of extension of such periods or otherwise. [87-G]
.... CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4459 of
1989.
F
From the Judgment and Order dated 14th June, 1989 of the Customs
Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No.
C/1700/86-D.
.., Mr. Dushyant Dave, Shahid Rizvi, Aseem Malhotra and Darshan
..., Singh for the Appellants . G

M.G. Shanker Murthy and V.K. Verma for the Respondent.

The Judgment of the Court was delivered by

BHARUCHA, J. This is an appeal against an order of the Customs, H
80 SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.

A Excise & Gold (Control) Appellante Tribunal. It raises a question of some
importance relating to the rate at which Customs duty is to be levied on
goods that remain in a bonded warehouse beyond the permitted period.
r-
The appellants imported and, on 25th May, 1984; filed a bill of entry
for 4832 bales of rayon grade wood pulp for warehousing. The 4832 bales
B were warehoused on 16th June, 1984, in a private bonded Warehouse of the
appellants. Of these, 4000 were cleared and we are concerned only with
the remaining 832 bales (now referred to as 'the said bales'). The period
of three months for which the said bales were warehoused under the
provisions of Section 61(1)(b) of the CUstoms Act, 1962 (hereinafter
c referred to as 'the Act') came to an end on 15th September, 1984. On 8th
May, 1985, the Assistant Collector of Customs issued to the appellants a
demand notice under Section 72(1) of the Act. It recorded that the said
bales remained in the bonded warehouse although the period of warehous-
ing had not been extended beyond 15th September, 1984. The appellants
had, therefore, become liable to pay in respect of the said bales Customs
D
duty in the sum of Rs. 6,73,885.80, countervailing duty in the sum of Rs.
1,63,657.98 and interest at the rate of 12 per cent per annum in the sum of
Rs. 67,003.52 for the period 16th September, 1984, to 15th May, 1985,
under the provisions of Section 72(1)(b). Giving credit for the amount of
Rs. 8,03,458.32 which had been deposited by the appellants, the appellants
E were called upon to pay Rs. 1,01,88.98 plus interest after 15th May, 1985,
till the date of removal of the said bales from the bonded warehouse. If
the amount was not paid within 7 days of receipt of the demand notice, it
was recoverable in terms of the provisions of Section 72(2), without
prejudice to any other mode of recovery. On 30th May, 1985, the appellants
filed a bill of entry for ex-bond clearance of the said bales for home
F
consumption. On 25th June, 1985, the appellants were served with an order
in respect of the bonded warehouse within which the said bales were
stored. The order recalled the demand notice dated 8th May, and the
deposit made by the appellants thereunder. It directed the Superintendent
of the bonded warehouse to allow clearance of the said bales after realisa-
G tion of such amount as was due. It stated that the bonded warehouse would
be treated as de-licensed from the date on which the said bales were
..
,.

cleared and action regarding cancellation of the bond given by the appel-
!ants was completed. The order concluded :

H "It is clarified for removal of doubts that the warehoused goods
KESORAM RAYON v. COLLECTOR OF CUSTOM [BHARUCHA, J.] 81

which will be cleared on the basis of the instant order will not be A
cleared on ex-bond Bill of Entry as this is not a case of clearance
under Section 68 of Customs Act, '62 but on realisation of charges
under Section 72 ibid."

Between 29th June and 2nd July, 1985, the said bales were removed from
the bonded warehouse. B
On 25th May, 1984, when the bill of entry for warehousing the said
bales was filed, they were liable to Customs duty. By virtue of an exemption
notification dated 17th March, 1985, pulp derived from vegetable fibre was
exempted from the payment of Customs and additional duties. • C
The contention of the appellants before the authorities below and
the Tribunal was that the rate of Customs duty in force on the- date of
removal of the said bales from the bonded warehouse was the applicable
rate, having regard to the provisions of Section 15(1)(b), and, by virtue of
the exemption notification aforementioned, no duty was payable thereon. D
The Tribunal noted that the said bales were removed from the bonded
warehouse after the expiry of the bonding period. They had not been
cleared from the warehouse under Section 68 but had been removed on
the basis of the order under Section 72. No ex-bond bill of entry for home
consumption had been filed by the appellants and no order for clearance E
for home consumption had been made. Section 15(1)(b) became applicable
when goods were cleared from a warehouse under Section 68. After the
expiry of the warehousing period the said ceased to be warehoused goods
and_ were removed under the order passed under Section 72. In such a case,
the applicable rate of duty was the rate in force on the date of filing of the
into-bond bill of entry, as provided in Section 15(1)(b) read with the F
proviso to Section 15(1) and Section 46. The Customs authorities had
charged duty on the said bales at this rate under the provisions of Section
72. Interest was also recoverable from the appellants for storage of the said
bales after expiry of the bonding period. There was, therefore, no illegality
in the order of the Customs authorities and the appeal was dismissed. G

Section 2 of the said Act is its definition section. Under sub- section
( 43), "warehouse" means a public warehouse appointed under Section 57
or a private warehouse licensed under Section 58. Under sub-section (44),
"warehoused goods" means goods deposited in a warehouse. Section 12
requires that Customs duty shall be levied, at such rates as are specified in H '
82 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.

A the Customs Tarrif Act or any other law for the time being in force, on
goods imported into India. Section 15, insofar as is relevant, reads thus :

"SECTION 15. Date for determination of rate of duty and tariff
valuation of imported goods. - (1) The rate of duty and tariff
valuation, if any, applicable to any imported goods, shall be the
B rate and valuation in force, -

(a) ............................................................................................. ;

(b) in the case of goods cleared from a warehouse under section
68; on the date on which the goods are actually removed from
c the warehouse;

Section 18 deals with the provisional assessment of duty. Sub-section (2),
D so far as is relevant, reads thus :

"SECTION 18. Provisional assessment of duty, (!) ..................."

(2) ·········································································································

E (a) ········································································································
(b) in the case of warehoused goods, the proper officer may, where
the duty finally assessed is in the excess of the duty provisionally
assessed, require the importer to execute a bond, binding himself
in a sum equal to twice the amount of the excess duty."
F
Section 46 requires the importer of goods, other than goods intended for
transit or transhipment, to make entry thereof by presenting to the proper
officer a bill of entry for home consumption or warehousing in the
prescribed from. Section 47, sub-section (1) reads thus :

G "47. Clearance of goods for home consumption. - (1) Where the
proper officer is satisfied that any goods entered for home con-
sumption are not prohibited goods and the importer has paid the
import duty, if any, assessed thereon and any charges payable
under this Act in respect of the same; the proper officer may make
H an order permitting clearance of the goods for home consumption."
KESORAM RAYON v. COLLECTOR OF CUSTOM [BHARUCHA, J.) 83

Chapter IX deals with warehousing. Under the terms of Section 59 therein, A
the importer of goods entered for warehousing and assessed to duty under
Section 17 or Section,18 is required to execute a bond binding himself in
the sum equal to twice the amount of the duty assessed on such goods to
observe all the provisions of the Act and the rules and regulations in
respect of such goods and to pay on or before the date specified in the
B
notice of demand all duties and interest payable under Section 61 and rent
and charges claimable on a~c'OUnt of such goods under the Act.

Section 61 reads thus :

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

(a) in the case of -
D
(i) non-consumable stores; or

(ii) goods intended for supply to a foreign diplomatic mis-
sion; or

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

(iv) goods intended for use in any hundred per cent export-
oriented undertaking; or
F
(v) goods which the Central Government may, if it is satis-
fied that it is necessary or expedient so to do, by
notification in the Official Gazette, specify for the pur-
poses of this clause,
G
till the expiry of one year.

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
84 SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.

A (b) in the case of any other goods, till the expiry of three 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
(1) in the case of any goods which are likely to deteriorate, the
aforesaid period of one year or three months, as the case may
be, may be reduced by the Collector of Customs to such
shorter period as he may deem fit;
c (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 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
D deem fit;

Provided further that when the licence for any private
warehouse is cancelled, the owner of any goods warehoused there-
in shall, within seven days from the date on which notice of such
cancellation is given or within such extended period as the proper
E officer may allow, remove the goods from such warehouse to
another warehouse or clear them for home consumption or expor-
, tation.

(2) Where any warehoused goods remain m a warehouse
beyond the period of one year or three months specified in clause
F (a) or clause {b) of Sub-section (i) by reason of the extension of
the aforesaid period or otherwise, interest at such rate, not ex-
ceeding eighteen per cent per annum 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
G of one year or, as the case may be, three months, till the date of
the clearance of the goods from the warehouse :

Provided that the Board may, if it considers it necessary so to
do in the public interest, waive by special order and under cir-
cumstances of an exceptional nature to be specified in such order,
H the whole or part of any interest payable under this sub-section in
KESORAMRAYONv. COLLECTOR'OFCUSTOM[BHARUCHA,J.] 85

respect of any warehoused goods." A

Section 62 states that all warehoused goods shall be subject to the control
of the pr.:iper officer and that no person shall enter a warehouse or remove
any goods therefrom without his permission. Section 68 reads thus :
86 SUPREME COURT REPORTS [1996) SUPP. 5 S.C.R.

A the proper officer may demand, and the owner of such goods shall
forthwith pay, the full amount of duty 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
B sub-section (1), the proper officer may, without prejudice 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."

c Learned counsel for the appellants submitted that the said bales were
liable to the rate of duty under the provisions of Section 15(1)(b) : they
had been actually removed from a bonded warehouse and it was the date
of such actual removal which was determinative of the rate of duty ap-
plicable to them. He drew support for his submission from the decision of
D this Court in D.C.M. and A11other v. Unio11 of India and A11other, [1995)
Supp. 3 SCC 223, where it was held that a reading of Sections 15, 46, and
68 made it clear that they provided an option to the importer either to file
a bill of entry for home consumption straightway (in which case he had to
pay the duty determined with reference to that date) or to file a bill of
entry for warehousing. In the latter case, the goods were warehoused.
E Import duty would be levied at the rate and on the basis of the valuation
determined in accordance with the provisions prevailing on the date of
clearance from the warehouse for which purpose the importer had to file
a fresh bill of entry for home consumption. In other words, it was the date
of filing the bill of entry for home consumption which determined the rate
of duty in clauses (a) and (b) of Section 15. Inasmuch as the matter was
F left to the option of the importer and also because a uniform principle was
adopted by the Act, there was no room for any legitimate grievance of
discrimination. There was no presumption that the rate of duty always went
up. It could also go down, in which case the importer stood to gain.

G Learned counsel for the appellants submitted, in the alternative, that
the rate of duty applicable to the said bales was the rate in force on 8th
May, 1985, being the date on which the demand notice under Section 72
was issued to the appellants.

Learned counsel for the Customs authorities submitted that the
H permissible of warehousing of the said bales being over, Section 15(1)(b)
KESORAMRAYONv. COLLECTOR OF CUSTOM [BHARUCHA,J.) 87

had no application, nor was the date of the demand notice under Section A
72 relevant.

The Tribunal proceeded on the basis that no ex-bond bill of entry
for home consumption had been filed by the appellants in the prescribed
form and· no order for clearance for home consumption had been made by
the proper officer on the bill of entry. Learned counsel for the appellants, B
however, drew our attention to a letter dated 22nd July, 1988, written by
the Customs authorities in reply to an inquiry by the appellants about their
ex-bond bill of entry for home consumption filed on 30th May, 1985, in
respect of the said .bales. The letter stated that the bill of entry could not
be traced in the Customs records but, "As per our record, the said Bill of C
Entry for ex-Bond clearance for home consumption for clearing 832 of
Wood Pulp from the Private Bonded Warehouse at Mogra was filed by you
on 30.5.1985." By reason of this letter of the Customs authorities, we
proceed upon the basis that the appellants had filed a bill of entry for hcime
consumption on 30th May, 1985, in respect of the said bales, but there is D
nothing to indicate that an order for clearance thereon had been made.

Section 61 prescribes the period for which goods may be
~arehoused. They may be left in the warehouse in which they are deposited
for the period of one year if they are such goods as are referred to in clause
(a) of sub-section (1), and for the period of three months counted from E
the date of the order permitting warehousing if they are not such goods.
The first proviso to sub-section (1) contemplates the reduction of the
periods aforementioned, of one year and three months respectively (now
referred to as "the permitted periods"), if the goods are likely to
deteriorate. It also permits, if the goods are not likely to deteriorate, an p
extension of the permitted periods on sufficient cause being shown; the
Collector of Customs can extend the permitted periods by six months and
the Central Board of Excise and Customs can do so for as long as it deems
fit. By reason of sub-section (2), interest is payable on the amount of duty
on the warehoused goods for the period from the expiry of the permitted
periods till the date of their clearance from the warehouse, regardless of G
whether the goods have remained in the warehouse beyond the permitted
periods by reason of extension of such periods or otherwise.

Put briefly, so far as it is relevant for our purpose, warehousing is
permissible for only a stated period; the period is extendible if cause for H
88 SUPREME COURT REPORTS [1996) SUPP. 5 S.C.R.

A doing so is shown; and, whether or not the permissible period has been
extended, interest on the amount of duty on the warehoused goods is
payable for the period subsequent to the permissible period upto their
clearance.

Section 72 deals with goods improperly removed from a warehouse.
B Goods are improperly removed from a warehouse under the terms of
sub-section (1) if they are removed clearance under Section 71 (clause (a);
if they are taken as samples but without payment of duty (d;mse (c); if a
warehousing bond has been executed in respect of the goods under Section
59 but they are not satisfactorily accounted for (clause (d); and if they have
C not been removed from the warehouse on the expiration of the permitted
period or its permitted extension (clause (b). In all such cases the Customs
officer is empowered to demand, and the importer shall pay, the full
amount of duty chargeable on the goods and interest, penalties, rent and
other charges thereon. If payment as demanded is not made, it 1s
recoverable by sale of other goods of the importer in the warehouse.
D
Goods which are not removed from a warehouse within the permis-
sible are treated as goods 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, neces-
E
sarily, it would be payable at the rate applicable on the date of their
deemed removal from the warehouse, that is, that date on which the
permitted period or its permitted extension came to an end.

S1ection 15(1)(b) applies to the case of goods cleared under Section
F 68 from a warehouse upon presentation of a bill of entry for home con-
sumption; payment of duty, interest penalty, rent and other charges; and
an order for home clearance. The provisions of Section 68 and, conse-
quently, of Section 15(1)(b) apply only when goods have been cleared from
the warehouse within the permitted period or its permitted extension and
G 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 ri!moved from the warehouse under Section 72.

The decision in the case of D.C.M. and Another v. Union of India and
Another, cited by learned counsel for the appellants dealt with, and upheld,
H the constitutionality of Section 15(1)(b). It did not deal with a situation
KESORAM RAYON v. COLLECTOR OF CUSTOM (BHARUCHA, J.] 89

where goods continued to remain in a bonded warehouse beyond the A
permitted period. It does not assist the appellants' case.

The permitted period for warehousing the said bales came to an end
on 15th September, 1984, but the said bales remained in the bonded
warehouse thereafter. The said bales, by reason of the provisions of Section
72, were deemed to have been improperly removed from the bonded B
warehouse on that day and subject to duty at the rate then in force. The
demand notice dated 8th May, 1985, called upon the appellants to pay such
duty. The order dated 25th June, 1985 pertaining to the appellants' private
bonded warehouse, rightly made it clear that the said bales had not been
cleared therefrom on an ex-bond bill of entry under Section 68 but under C
Section 72. While the appellants may have filed an ex-bond bill of entry
pertaining to the said bales on 30th May, 1985, there is nothing on record
that suggests that clearance thereon under Section 68 was ordered. Section
15(1)(b).has, therefore, no application.

The consequence of non-removal of warehoused good within the D
permitted period or the permitted extension is, by virtue of the terms of
Section 72, certain. The date on which it comes to end is the date relevant
for determining the rate of duty. When the duty is in fact demanded is not
relevant. The alternative submission on behalf of the appellants must,
therefore, also be rejected.
E
The Tr~bunal took the view that the rate applicable to the said bases
was the rate applicable on the date the into-bond bill of entry in respect
thereof was filed. This view does not take into account the fact that the
said bales were permitted to be warehoused and that during the permitted
period of three months the appellants could have sought an extension. It
also does not take note of the terms of Section 72(1)(b) : the said bales F
would be treated as. having been improperly removed from the bonded
warehouse only when they were not removed therefrom on the expiration
of the permitted period of three months. Since there was not change in the
rate of duty during those three months, there is no alteration of the
appellant's liability.
G
The appeal is dismissed with costs.

R.P. Appeal dismissed.