In Brief
M/s. Kushang Apparel Ltd. imported CTV kits and stored them in a customs warehouse but failed to clear them within the permitted one-year period and did not pay warehouse rent. The warehouse-keeper sold the goods by auction and tender sale. The government demanded customs duty calculated at the 2002 rate of deemed removal, far exceeding the sale proceeds. The Supreme Court held that customs duty on unclaimed goods must be calculated on actual sale proceeds (backward calculation treating proceeds as cum-duty price), not the rate at the deemed removal date. The Court applied the Central Board of Excise and Customs' binding Circular of 2001, confirming that Section 150 priority governs distribution: sale expenses first, then duty, then warehouse charges.
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