Customs, Excise and Gold Tribunal - Delhi
Collector Of Customs And Central Excise vs J.K. Synthetics Ltd. on 3 January, 1991
Equivalent citations: 1991ECR267(TRI.-DELHI), 1991(56)ELT236(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. This appeal arises from the order of the Collector (Appeals) setting aside the order of the Assistant Collector rejecting the claims of the respondents for refund of interest paid by them in terms of Section 61 of the Customs Act, 1962.
2. The issue for determination is the eligibility of the importers to obtain refund of interest paid by them on consignments imported prior to 13-5-1983, that is, the date on which Section 61 was amended to provide for payment of interest.
3. The facts of the case in brief are as follows :-
M/s. J.K. Synthetics Ltd., Kota, imported some consignments of MEG, DMT, etc. during the period May, 1982 to March, 1983 and deposited the same in public bonded warehouse as per the provision of Section 60 of the Customs Act. At the time when the imported goods entered the territorial waters of India, Section 61 did not provide for payment of interest. However, by amendment on 13-5-1983 Section 61 was amended providing for a lesser period of bonding, that is, three months only instead of one year in the case of goods other than non-consumable stores and it also stipulated that if an importer fails to take clearance of goods from the public bonded warehouse within the period of three months provided in Clause (b) interest would have to be paid at the rate prescribed.
4. The respondents wrote to the Customs authorities on 8th July, 1983 seeking extension of the warehousing period for further period of one year and agreeing to pay interest for the period from the expiry of the period of three months till the date of clearance of the goods from warehouse. The goods were cleared after payment of interest under protest and refund claims were filed on 17-11-1984 and 8-2-1985 which were rejected by the Assistant Collector who held that the amended Section 61 would apply as the goods have been cleared from the warehouse subsequent to the date of amendment and the extension of the bonding period (beyond one year) was granted subsequent to the amendment. The lower appellate authority allowed the appeal of the importers holding that the law applicable as on the date of warehousing would apply, namely, Section 61 prior to its amendment which does not provide for payment of interest. Hence this appeal by the Department.
5. We have heard Smt. S. Baliga, learned SDR and Shri V. Lakshmi Kumaran, learned Advocate. It is an admitted position that the goods were warehoused prior to the amendment of Section 61. The Section was amended on 13-5-1983. Section 61 (2) which provides for interest reads as under :
Section 61(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 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."
Sub-section (2) thus provides for charging of interest in respect of goods which remain warehoused beyond the periods specified in Clauses (a) and (b) of sub-section 1 [Clause (a) deals with non-consumable stores etc. and Clause (b) covers other goods]. There is nothing in the amendment to indicate that it is to operate with retrospective effect. Nor is there any saving provision. Therefore, the Section will have to be interpreted in the light of the generally accepted principle of statutory construction that every statute is prima facie prospective unless it is expressly or by necessary implication given retrospective operation. It is also well accepted that every statute which takes away or impairs vested rights acquired under existing laws, or which creates a new obligation or imposes a new duty, must be presumed to be intended not to have retrospective effect. Fiscal legislation imposing liability is governed by the normal presumption of prospectivity. The intention of the legislature also appears to be that interest is payable only in respect of goods remaining in a warehouse beyond the period specified in Sub-section (1) by reason of extension of the aforesaid period. Therefore, the law as in force on the date of warehousing would apply to the case i.e. Section 61 prior to its amendment. The respondents would not be liable to pay interest. The contention of the learned SDR that the respondents are bound by their letter of 8th July, 1983 in which they have agreed to pay interest is not tenable as the agreement being contrary to law, cannot be enforced and the respondents are not estopped from claiming refund.
6. In the light of the above discussion, we see no reason to interfere with the impugned order and accordingly uphold the same and dismiss the appeal.
ORDER D.C. Mandal, Member (T)
7. I have carefully perused the order written by learned Judicial Member Ms. Jyoti Balasundaram and concurred by learned Technical Member Shri I.J. Rao, but I could not persuade myself to agree with their decision. The normal period of warehousing for these goods under Section 61 of the Customs Act was one year when the same were warehoused on importation. Section 61 was amended on 13-5-1983. As a result of amendment of that Section the bonding period for these goods were reduced from one year to three months and a provision was inserted providing for charging interest on the amount of duty for the extended period of warehousing. In the present case, original warehousing period of one year was extended on the request of the importer after 13-5-1983. They also undertook to pay interest, if payable. The Order-in-Original of the Assistant Collector shows that interest was charged when initial period of bonding of one year expired. In other words, interest has been charged for the extended period in excess of one year. This is clearly permissible under the amended Section 61(2) of the Customs Act, which has been extracted in para 5 of the order proposed by Member (Judicial). This interest is nothing but a payment for delayed payment of duty because of extension of normal period of warehousing. The Department has correctly and very justifiably charged interest on the amount of duty in respect of the period which is beyond the original warehousing period of one year. There is no illegality involved in the same, nor this amounts to retrospective effect of the amendment to Section 61 (2) of the Customs Act. As is clear in the present case, the interest has been charged after the amended Section came into force and that too for the extended period over the period of one year. In the circumstances, I uphold the Order-in-Original of the Assistant Collector and set aside the impugned order-in-Appeal passed by the Collector of Customs (Appeals). Accordingly, the appeal of the Revenue is allowed by me.
I.J. Rao, Member (T) In accordance with the orders passed by majority, we dismiss the appeal.