2008 (11) TMI 488 - AT - Central Excise

Summary

Issues involved: Determination of interest applicable to warehoused goods u/s Customs Notification No. 23/01-Cus. dated 22-5-2001; Claim for refund of interest paid beyond 30 days for goods warehoused prior to 1-6-2001.

Summary:
The case involved a dispute regarding the interest applicable to warehoused goods under Customs Notification No. 23/01-Cus. dated 22-5-2001. The respondents had filed 21 Bills of Entry for goods warehoused prior to 1-6-2001, with some goods remaining in the warehouse for a period exceeding 30 days. The interest-free warehousing period was reduced from 180 days to 30 days effective from 1-6-2001. The respondents paid interest for warehousing period beyond 30 days at the time of clearance and later claimed a refund of Rs. 27,28,861/-. A partial refund of Rs. 4,61,070/- was sanctioned, but the claim for the remaining amount of Rs. 23,17,791/- was rejected. The Commissioner (Appeals) allowed the refund for the balance amount based on a Tribunal decision, leading to the Revenue's appeal against this decision.

Upon hearing both sides, it was established that the Notification dated 22-5-2001 reducing the interest-free period to 30 days applied only to goods warehoused post 1-6-2001. This interpretation was supported by precedents such as Jindal Steel & Power Ltd. v. Commissioner of Central Excise, Raipur, LML Ltd. v. Commissioner of Customs, Kanpur, and Jindal Vijayanagar Steel Ltd. v. Commissioner of Customs, Mangalore. The decision was further upheld by the Hon'ble Karnataka High Court. Consequently, the Tribunal upheld the Commissioner (Appeals) order, rejecting the Revenue's appeal.

In conclusion, the Tribunal affirmed that the interest-free period reduction to 30 days applied only to goods warehoused post 1-6-2001, and therefore, there was no justification to interfere with the Commissioner (Appeals) decision, leading to the rejection of the Revenue's appeal.