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Issues Involved:
Whether interest can be claimed without confirming customs duty against the appellants for not removing goods from a Customs Bonded Warehouse within the specified period. Analysis: The judgment by the Appellate Tribunal CESTAT, New Delhi dealt with seven appeals arising from a common order-in-appeal dated 18-9-2002, involving M/s. Polar Forging & Tool Ltd. and M/s. Heynan India Ltd. The issue in question was whether interest could be claimed from the appellants without confirming customs duty against them for failing to clear goods from a private Customs Bonded Warehouse within the stipulated period. The appellants had imported raw materials under Chapter 82 of the CETA and stored them in a Customs Bonded Warehouse under the 100% EOU Scheme. Following their failure to clear the bonded goods within the specified period, a show cause notice was issued to pay interest on the customs duty amount payable at the time of clearance. The adjudicating authority confirmed the interest amount through orders-in-original, which were upheld by the Commissioner (Appeals). The key argument raised was that interest could not be independently claimed without confirming the customs duty liability against the appellants, as per Section 61(2) of the Customs Act. The Department contended that interest could be claimed on the customs duty payable by the appellants upon removal of the goods. The Tribunal noted that no customs duty had been confirmed against the appellants, and the interest was claimed solely based on the failure to remove goods within the specified period. Referring to relevant circulars and notifications, the Tribunal emphasized the need to consider the applicability of such provisions to the case at hand. It highlighted the oversight of important legal precedents, including the principle that interest on warehoused goods is contingent upon the liability to pay customs duty on those goods. Since no duty liability had been determined by the competent authority in this case, the Tribunal ordered a remand for fresh decision, considering the legal principles and notifications cited. In conclusion, the impugned order was set aside, and the matter was remanded to the adjudicating authority for a fresh decision in light of the observations made. The appeals were allowed by way of remand, with a directive for the adjudicating authority to provide the appellants with an opportunity to be heard.
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