2015 (11) TMI 1236 - SC - Customs

Duty demand - non removal of goods after expiry of warehousing period - Held that - Case is covered by the judgment of this Court in Kesoram Rayon v. Collector of Customs, Calcutta 1996 (8) TMI 109 - SUPREME COURT OF INDIA . - Commissioner directed to recalculate the interest. He may complete this exercise within one month from the date of receipt of the copy of this order and indicate the exact amount of interest which is payable by the appellant. Further, the Commissioner would be entitled to adjust the sum of ₹ 2 crores which has already been paid in this behalf. The balance amount shall be paid by the appellant within two months from the date of communication of the order by the Commissioner. On payment of the amount of interest, the Bank Guarantee furnished by the appellant shall stand discharged. - Decided against assessee.

Summary

Issues:
1. Extension of warehousing period for goods imported.
2. Calculation of interest on duty amount.

Extension of Warehousing Period:
The appellant-assessee entered into a contract for supply and installation of an Air Separation Plant (ASP) with a Chinese corporation. After filing a Bill of Entry for warehousing the goods, the appellant sought extensions for removing the goods beyond the original period. Despite removing some goods, some remained uncleared, leading to a Show Cause Notice demanding duty payment for the uncleared goods beyond the extended period. The appellant paid the duty amount without interest, which was later adjusted. The appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) was dismissed. The appellant argued that the case is covered by a previous judgment but sought a larger Bench reference. The Supreme Court held that the previous judgment correctly depicted the law, leading to the dismissal of the appeal on this aspect.

Calculation of Interest on Duty Amount:
The appellant raised concerns regarding the calculation of interest charged on the duty amount. Two main issues were highlighted: first, interest was charged from an earlier date than when the liability arose, and second, a higher interest rate was applied than what was prevalent during the period. The Court agreed with the appellant's arguments on both counts. While dismissing the appeal concerning interest, the Court directed the Commissioner to recalculate the interest within a month, considering the correct periods and rates. The appellant was given two months to pay the balance amount of interest, after which the Bank Guarantee would be discharged.

In conclusion, the Supreme Court upheld the previous judgment regarding the extension of the warehousing period and directed the recalculation of interest on the duty amount, addressing the appellant's concerns over incorrect calculations.