Customs, Excise and Gold Tribunal - Mumbai
Ispat Industries Ltd. vs Cce on 22 September, 2003
Equivalent citations: 2004(112)ECR198(TRI.-MUMBAI)
ORDER S.S. Sekhon, Member (J)
1. Appellant was issued a Show Cause Notice F/No. VIII (72-73(63/94 dt. 20.12.1994 stating as the appellant was clearing H.R. Coils, deposited in the Warehouse, in a piece-meal manner on payment of duty after getting the Bills of entries for home consumption assessed. In terms of Section 47(2) of the Customs Act, 1962, if the importer fails to pay the import duty under Section 47(1) within seven days from the date on which the Bill of Entry is returned to him for payment of duty, the importer is liable to pay interest. Based on the same, a Notice was issued alleging that appellant had made payment of duty and effected clearance of Warehoused Goods after expiry of the period of seven days from the date on which the Bills of Entry were returned to him for payment of duty and consequently appellant was liable to pay interest for the period of delay & the interest due was demanded. Appellant was also issued two further show cause notices on identical grounds. The show cause notices were issued on 20.12.1995 demanding interest for the period May, 1994 to September, 1994, on 10.4.1994 for the period October, 1994 to February, 1995 and on 1.6.1995 for the month of March, 1995.
2. The Assistant Commissioner of Central Excise by order in original No. 65-67/99/DN II/D dropped the Notices on the grounds that Section 47(2) provides for payment of interest by importer only in respect of goods covered under Section 47(1) and that interest under Section 47(2) could not be levied on goods covered by any other Section of the Act unless it is specifically provided in the said Section of the Act & held that as appellant cleared goods for home consumption under Section 68 of the Customs Act, 1962, the provision of Section 47(2) would not be applicable to any goods cleared under this Section.
3. On an appeal filed by Commissioner, the Commissioner (Appeals) set aside the order passed by the Asst. Commissions and confirmed demand for interest on the grounds that the Hon'ble Tribunal in the case of Pesticide Industries v. Collector of Customs, Jaipur has held that in case of goods falling under/Section 61(1)(b) of the Customs Act 1962 not only the period of warehousing is restricted to 30 days but also that the interest burden in respect of warehoused goods commences after the Bill of Entry is assessed and returned to the importer. Commissioner (Appeals) further held that the accrual of interest commences even while the goods are warehoused. This order relied upon a Madras Custom House Public Notice No. 186/89 dated 16.11.1989 wherein it was clarified that interest would commence after seven days of returning the assessed Bill of Entry. Hence this appeal.
4. After hearing both sides and considering the matter it is found that:
(a) The Commissioner (Appeals) has erred in demanding interest by relying on the judgment of the Hon'ble Tribunal in the case of Pesticides Industries v. Commissioner of Customs without appreciating the fact that the said judgment is no longer a good law as the same pertained to a period when Section 61 had Clause (3) which read as under:
Notwithstanding anything contained in Section 47, on any warehoused goods specified in Clause (b) of Sub-section (1), the importer shall pay interest on the amount of duty at such rate as specified in Section 47, for the period from the expiry of seven days from the date on which the bill of entry is returned to the importer for warehousing the goods under Section 59A, till the date of 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 such order and under circumstances of any exceptional nature, to be specified in such order, the whole or part of any interest payable under this section in respect of any warehoused goods.
the said Section 61(3) of the Customs Act, 1962 was omitted and Section 61(2) was amended by Finance Act, 1944 to read as under:
Where any warehoused goods-
(i) specified in Sub-clause (a) of Sub-section (1), remain in a warehouse beyond the period specified in that sub-section by reason of extension of the aforesaid period or otherwise, interest at such rate as is specified in Section 47 shall be payable, on the amount of duty payable at the time of clearance of the goods in accordance with the provisions of Section 15 on the warehoused goods, for the period from the expiry of the said warehousing period till the date of payment of duty on the warehoused goods.
(ii) specified in Sub-clause (b) of Sub-section (1), remain in a warehouse beyond a period of six months, interest shall be payable at such rate or rates not exceeding the rate specified in Section 47, as may be fixed by the Board, on the amount of duty payable at the time of clearance of the goods, in accordance with the provisions of Section 15 on the warehoused goods, for the period from the expiry of the said six months till the date of payment of duty on the warehoused goods.
Provided that the Board may. if it considers it necessary so to do in the public interest, by order and under circumstances of an exceptional nature, to be specified in such order, waive the whole or part of any interest payable under this section in respect of any warehoused goods:
Provided further that the Board may, if it is satisfied that it is necessary so to do in (he public interest, by notification in the Official Gazette, specify the class of goods, in respect of which no interest shall be charged under this section.
Explanation-For the purposes of this section, "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 to 1944).
The Tribunal had dealt with a completely different legal provision, wherein Clause (3) of Section 61 clearly provided for payment of interest after the expiry of seven days from the date on which the Bill of Entry is returned to the importer for warehousing the goods till their clearance from the warehouse. After the amendment of Clause 2 of Section 61, interest: is payable on duty payable at the time of clearance of the Warehoused Goods from the period of expiry of the Warehousing period till the date of payment of duty on the Warehoused Goods. The impugned order which is based on the decision of the Hon'ble Tribunal in Pesticides Industries v. Commissioner of Customs therefore deserves to be set. aside as the said decision is not applicable in the present case.
(b) Madras Customs House Public Notice relied upon by the Commissioner will not be applicable to the present appellant who is situated in Nagpur Commissioner jurisdiction. No trade notice of Nagpur Commissioner has been produced by the DR before us and or explained how that would be applicable. The Commissioner's orders also does not explain how that trade notice is applicable except for a cryptic recarding that Madras Trade Notice clarifies that interest would commence after 7 days after returning of assessed Bill of Entry.
(c) We find force in the submission made by the appellant before us that the amendment to Section 28 of the Customs Act has been effected from 26.5.1995 to bring within its ambit demands on account of interest not paid or short levied. The notices in the present case have been issued prior to this amendment on 26.5.1995 proposing to confirm the demand under Section 28(1)(b) of the Customs Act, 1962 and thus the notices cannot be proceeded with.
5. In view of the findings, order impugned cannot be upheld and the appeal is to be allowed. Ordered accordingly.
(Pronounced in Court on 19.9.2003)