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13. Elaborating the contention, the learned counsel submitted as follows :

The clear meaning of Section 59 of the Act was that an importer who had failed to clear the goods even after the expiry of the maximum period allowed under sub-section (1) of Section 61, should pay interest at the prescribed rate on the amount of duty which was claimable as on the date specified in the demand notice issued under Section 59 of the Act. Interest being compensatory in character should be computed with reference to the liability to pay duty as on the date specified in the demand notice payment of which was withheld and importer has to pay interest with effect from the said specified date till the actual payment of customs duty and taking delivery of the goods.

18. The answer to the question depends upon the true meaning of Section 59(b). It speaks of the liability of the importer to pay interest on the amount of excise duty claimable. It is well-settled position in law that the interest is compensatory in character and it has to be paid by a party, who has withheld the payment of principal amount payable to the person to whom he has to pay the same. This basic concept about 'interest' should be borne in mind in order to understand the true meaning of Section 59 of the Act. The difference between 'tax', 'interest' and 'penalty' has been expounded by the Supreme Court in the case of A.C.C. v. Commercial Tax Officer , the relevant portion is at para-23. It reads :

"23. We are concerned in this case with the liability of the assessee to pay interest on the amount of tax which had remained unpaid, Tax, interest and penalty are three different concepts, Tax becomes payable by the assessee by virtue of the charging provision in a taxing statue. Penalty ordinarily becomes payable when it is found that an assessee has wilfully violated any of the provisions of the taxing statue. Interest is ordinarily claimed from an assessee who has withheld payment of any tax payable by him and it is always calculated at the prescribed rate on the basis of the actual amount of tax withheld and the extent of delay in paying it. It may not be wrong to say that such interest is compensatory in character and not penal."

As could be seen from the above enunciation in tax law, interest is ordinarily claimed from a person who has withheld payment of any tax payable by him to the Government. Can it be said that the petitioner had withheld payment of duty computed at the rate of 90% for the entire period, prior to 1-3-1988 though the rate of duty at 90% came into force only on 1-3-1988. The answer must be in the negative ? From this it follows, the interest could be calculated only on the amount of duty withheld from time to time. In order to understand what has been and what should have been done regarding computation of interest under Section 59 it is necessary to set out rate of duty in force from time to time. The particulars of the same as given by the learned Counsel at the time of the arguments are as below :