judgment

Harjit Singh Bedi, J. –

1.Leave granted.

2.The facts have been taken from SLP) No. 15278/2006.

3.These appeals filed by the Union of India arise out of the following facts : On 6.3.1996 the respondent Shakti LPG Ltd. imported 1714.5 MT of boiler steel plates worth Rs. 4.79 crores claiming that the said goods would be utilized for the extension of their storage terminal at Kakinada. As the said import could be entitled to a concessional rate of duty on the production of the appropriate certificates which were then not available with the importer, the goods were warehoused in one of the bonded godowns of the Central Warehousing Corporation on 30th May 1996 for an initial period of one year. The respondent thereafter applied for the extension of the warehousing period which was allowed by the Commissioner, Customs on 5th September 1997 upto 31st March 1998. A security deposit of about Rs.10, 00,000/- and an advance customs duty of about Rs.98, 00,000/- were deposited with the department on 31st March 1998 but the goods were still not cleared. From 1998 till 31st January 2001, several notices were sent to the respondent to clear the goods or to pay the duty and during this period the warehousing period was extended six times with the last extension expiring on 31st January 2001. As the respondent sought no further extension thereafter, the aforesaid period came to an end. Several notices were thereafter issued to the respondent under Section 72(1) of the Customs Act, 1962 (hereinafter called the “Act”) raising a demand of duty etc. As no reply was forthcoming, a notice under section 72(2) of the Act was issued to the respondent on 3rd December 2001 for sale of the goods by auction so as to recover of the outstanding dues. Interestingly, however, the respondent vide his letter dated 31st December 2004 also surrendered the goods with the result that it ceased to have any claim over them. The auction of the goods was duly advertised and it was actually held on the 28th of September 2005 and on the same day the respondent made a request for permission to re-export the goods under section 69(1) of the Act and for the cancellation of the auction sale. The respondent also filed Writ Petition No. 6907 of 2005 before the Bombay High Court for permission to re-export the goods. This petition was disposed of by the Bombay High Court on 19th October 2005 directing the Commissioner to dispose of the respondent’s application for re-export of the goods by a reasoned order after hearing the petitioner. The personal hearing was given to the respondent on 28th November 2005 wherein it was proposed to export the goods to a unit operating in the special economic zone (SEZ) Pithampur in Madhya Pradesh. The Chief Commissioner by his order dated 3rd January 2006 rejected the request of the respondent to clear the goods for export to the SEZ without payment of the duty on the plea that such an export was not envisaged as it was within the country. This order was challenged by the respondent in Writ Petition No.60 of 2006 before the Bombay High Court once again praying that it be permitted to export the goods outside India. This petition was dismissed as being devoid of merit vide order dated 13th January 2006 and a Special Leave Petition against the said order was dismissed by this Court on 3rd February 2006. Undeterred the respondent then moved an application before the Bombay High Court seeking a review of the order dated 13th January 2006. This application too was dismissed on the 22nd February 2006. The respondent then approached the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) by way of an appeal challenging the order of the Chief Commissioner dated 3rd January 2006. This appeal too was dismissed as withdrawn on the request of the respondent. The department thereupon initiated proceedings for the re-auction of the goods on which the respondent submitted a letter dated 8th June 2006 for permission to re-export the goods to the