2011 (1) TMI 159 - AT - Customs

Waiver of interest - appellants have cleared the impugned goods initially for exhibition in China and the movement of the goods was under bond without payment of duty - when the goods have been exported without payment of the central excise duty and subsequently the same goods have been re-imported and taken for home consumption, it is logical that the same should suffer central excise duty, as no goods can be manufactured and cleared for home consumption without payment of applicable central excise duty unless specifically exempted as provided under the law - no justification for claiming for waiver of interest and appeal rejected

Summary

Issues:
Challenge to demand of interest on delayed payment of duty under Notification No. 263/79 dated 23.9.1979 for goods exported to China for exhibition and subsequently imported and cleared without payment of duty.

Analysis:
The appellants contended that they exported goods to China for exhibition under bond, availing exemption under Notification No. 263/79, and later imported them without paying duty. A show-cause notice demanded duty and interest, which the appellants paid. The appeal challenged only the interest demand, arguing no willful misdeclaration and no fault in the delayed duty payment. The advocate claimed nil duty under Notification No. 94/96-Cus. for goods not under specific categories, hence no interest should apply. However, the DR argued duty and interest were rightly payable due to re-importation and delayed payment.

The Tribunal found the appellants initially exported goods to China under bond for exhibition, falling under Sl. No. 1(d) of Notification No. 94/96. The provision of Sl. No. 3, covering goods other than those under Sl. No. 1 & 2, was deemed inapplicable. As the goods were re-imported for home consumption without paying central excise duty, it was logical for duty to apply, unless exempted by law. The Tribunal held that interest under Section 28AB of the Customs Act, 1962 was rightfully charged for late duty payment, unrelated to any misdeclaration, making it a civil liability. Consequently, the appeal for waiver of interest was rejected, as there was no justification found.

In conclusion, the Tribunal upheld the demand for interest on delayed payment of duty for goods exported to China under bond and subsequently re-imported for home consumption. The interest was deemed payable under the law, despite the absence of willful misdeclaration, leading to the rejection of the appeal for interest waiver.