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Issues: Appeal against rejection of waiver of interest on goods warehoused beyond stipulated time period; Interpretation of Section 59(b) of the Customs Act, 1962; Applicability of interest payment on warehoused goods.
Analysis: The case involved an appeal by the Revenue against the rejection of waiver of interest on goods warehoused beyond the stipulated time period. The respondents had imported goods and warehoused them, clearing only a portion initially and the rest later upon payment of duty. The issue arose when a demand for interest on the unpaid duty amount was issued, which the respondents contested. The Commissioner (Appeals) relied on a Supreme Court decision stating that interest liability starts from the date specified in the demand notice under Section 59(1)(b) of the Customs Act. However, the Revenue argued that post-amendment in 1991, no separate demand is required for interest payment, as per Section 59(b) of the Act. The Revenue contended that the amended Section 59(b) does not necessitate a separate demand for interest payment, citing the Supreme Court's decision in another case. The court held that interest is payable on warehoused goods upon expiry of the stipulated period till the date of clearance, as per Section 61(2). Therefore, in the present case, interest payment was deemed mandatory post-amendment, and the respondents were liable to pay the interest as demanded by the original authority. Consequently, the appeal by the Revenue was allowed, setting aside the earlier order and upholding the demand for interest payment. In conclusion, the judgment clarified the legal position regarding interest payment on warehoused goods beyond the stipulated period. It emphasized the post-amendment provisions of Section 59(b) of the Customs Act, highlighting that interest payment is mandatory on such goods as per Section 61(2). The decision provided a clear interpretation of the law applicable to the case, ensuring compliance with the amended statutory requirements for interest payment on goods warehoused beyond the specified period.
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