Customs, Excise and Gold Tribunal - Delhi
Pesticide Industries vs Collector Of Customs on 2 July, 1996
Equivalent citations: 1996(87)ELT678(TRI-DEL)
ORDER J.H. Joglekar, Member (T)
1. In these three appeals the single issue involved is as to the period for which the interest prescribed under Section 61(3) of the Customs Act, 1962 is to be calculated. The facts leading to the dispute are as follows :
2. The appellants imported certain consignments and filed the Bills of entry for warehousing these goods for the period prescribed under Section 61(l)(b). The Bills of Entry were assessed and returned to the importers. The importers paid 50% of the duty so assessed and warehoused the goods. On the date of removal of the goods along with the remainder of the duty so assessed, they were asked to pay interest for the period from the expiry of 7 days from the date on which the Bills of Entry were returned to them, till the date of physical clearance from the wareshouse. The appellants complied with this direction but subsequently filed a refund claim for the interest so paid on the ground that the total period for which the goods were warehoused had not exceeded the period of 30 days which was the permissible period prescribed under Section 61(l)(b). In the meanwhile the Department on realising that the calculation of interest amount payable by the appellants was wrong, issued seven demand show cause notices for a total amount of Rs. 28,648. These demands were confirmed by the jurisdictional Assistant Collector vide his order dated 8-10-1993 along with his order rejecting the refund claim of the interest quantum earlier paid. The present appellants approached the Collector (Appeals) who in his single order dated 21-1-1994 upheld the orders of the Assistant Collector, Hence the present appeal before the CEGAT.
3. Shri R.A. Sugandh, ld. Legal Adviser to the appellant company urged that the rationale behind the scheme of warehousing was to reduce the financial burden on the importers. He stated that as per Section 15 of the Act the rate of duty attracted by warehoused goods was the one prevailing on the date on which the goods were actually removed from the warehousing. He thus argued that the burden is placed on the importer to pay the duty at the time of renewal of the goods from warehouse. He stressed that interest was a compensation allowed by law for the use or forbearance of barrowed money. In other words interest was compensated by a debtor to the creditor for the period of retention of debt. Since in this case the liability arises only at the time of clearance or the expiry of the permissible limit, there is no cause for charging interest from any date prior to these dates. As per the Provisions of Section 61(l)(b) for the goods imported by the appellants, the permissible period for warehousing was 30 days. And, therefore, the interest should have been attracted only after the expiry of that period. He claimed that this argument had in fact been accepted by the Collector in allowing this appeal in the first instance whereby the cases were remanded to the lower authority with the direction that refund of amount of interest paid for the period in excess of the 30 days of warehousing be done if otherwise admissible. This direction was not followed by the Assistant Collector. The Collector in his order dated 21-9-1994 accepted the interpretation made of his earlier order by the Assistant Collector in de novo proceedings and rejected the appeals. Ld. Legal Adviser to the appellant company cited case law and urged that the same officer dealing with same facts could not change his findings made earlier.
4. Shri Satnam Singh, ld. SDR, stated that the Assistant Collector has correctly cited and relied upon the Provisions of Section 61(3) which states that the period for charging interest commences from the 8th day after the assessed Bills of Entry are returned to the importers.
5. As regards the apparent contradiction in the two orders of the Collector, he submitted that in the second order the Collector has taken cognizance of the orders made by him in his earlier order and only thereafter he had arrived at his findings.
6. I have carefully gone through the arguments advanced by both the sides.
7. Section 61 of the Customs Act, 1962 as it stood at the time of importation and clearance of the impugned goods prescribed different periods for which different kinds of goods could be warehoused. For certain goods the period of warehousing was one year and for the other goods the period of warehousing was 30 days. There is no contest that the goods imported by the appellants fell under the later category. This discrimination which is evident for the period of warehousing is carried further in the same Section where the date of commencement of the interest payable on the remaining duty assessed on the warehoused goods is specified. Sub-section (2) of Section 61 states that interest is payable from the expiry of the period of one year for goods concern under Sub-section l(a). Sub-section (3) prescribed that the interest is payable from the expiry of 7 days from the date on which Bills of Entry is returned to the importers for warehousing after duty assessment where goods fell under provision of Sub-section l(b). The framers of the law have deliberately made this distinction whereby goods imported for certain purposes listed under Section 61(l)(a) enjoy a longer period of warehousing and also do not attract payment of interest until the expiry of the warehousing period. However, in the case of goods falling under Section 61(l)(b) not only the period of warehousing which is restricted to 30 days but also that the interest burden commences after the Bills of Entry is assessed and returned to the importer. In other words accrual of interest commences even while the goods are warehoused. ld. Consultant was quite correct in narrating the philosophy behind the charging of interest but where the law itself makes a difference between categories of persons or categories of goods, the officers of law have to follow the law and not go into the abstract concept of jurisprudence. The language of Section 61(3) is very clear. The refusal of the Assistant Collector to entertain refund claims and also his action of confirming the demands are in accordance with the provisions of this section and are required to be upheld.
8. Shri Sugandh, ld. Legal Adviser had urged that the same Collector has given two seemingly different judgments in his two orders. He urged that no authority can arrive at two different conclusions when dealing with the same facts. I find that in the order-in-appeal under contest before me, the ld. Collector has taken cognizance of the plea of the appellants made in this respect. He has reproduced his earlier order and has discussed it. After discussing he had held that the present appellants were trying to misinterprete the appeal order. At this stage I do not see any propriety to go into the merits of his earlier order since that is not the order challenged before me. The relevance of the present order is only that it upholds the order made by the Assistant Collector. The Assistant Collector has made the orders following the dictates of Section 61(3). Therefore, there is no need for me to discuss the apparent contradiction in the two appellate orders.
9. In the result, I find that the appeals have no merit and reject the same.