If imported goods are pilfered (stolen)
any time after their loading
but before proper officer has made order for clearance for home consumption or warehousing
then the importer shall not be liable to pay the duty leviable on such goods
However, where such goods are restored (recovered) to the importer after pilferage, the importer becomes liable to duty.
Conditions to be satisfied
- Goods must be pilfered (damage or deteriorated goods not covered)
- Pilferage should be between their unloading and order for clearance
(Pilferage of goods cleared after order for clearance but before actual clearance not covered)(Also pilferage before unloading not covered)
- Pilfered goods should not be restored back(if restored then duty payable)
Answer the following questions:-
(i) ABC Manufacturers Ltd. imported some goods from Japan through a vessel. After the
ship entered Indian port, the goods were unloaded and were lying with the custodian.
The said goods were pilfered before the proper officer made an order for clearance for
home consumption. Is ABC Manufacturers Ltd. liable to pay duty on such goods?
Further, what would be the customs duty implication if such goods are restored to ABC
(ii) Amino Industries imported certain goods from Norway. The said goods were
warehoused in a public warehouse for a period of 3 months after which it is cleared for
home consumption on payment of applicable customs duty. While transporting the goods
from customs warehouse to the factory of the importer, the said goods were damaged.
Can duty paid on such goods be remitted to Amino Industries?
(i) No, ABC Manufacturers Ltd. is not liable to pay duty in the given case. If any goods are
pilfered after the unloading thereof but before the proper officer has made an order for
clearance for home consumption, the importer shall not be liable to pay duty on such goods.
However, where such goods are restored to the importer after the pilferage, the importer
becomes liable to pay duty. Thus, ABC Manufacturers Ltd. will be liable to pay duty if
goods are restored to it.
(ii) No, duty paid on the goods, in the instant case, cannot be remitted as the goods have been
damaged after their clearance for home consumption from the warehouse. The duty on the
imported goods can be remitted only when such goods are destroyed at any time before
clearance for home consumption.