2007 (11) TMI 55 - AT - Customs

U/S 15 Custom Act, on warehoused goods interest is payable on the amount of duty payable at the time of clearance of goods Not. 89/05 exempts impugned goods from payment of duty (BED and ACD) so interest cannot be demanded - So interest paid is allowed to be refunded

Summary

Issues:
1. Delay in filing appeals due to the death of the secretary.
2. Liability to pay interest on duty discharged using DEPB scrips for delayed warehousing.
3. Refund claim rejection based on duty exemption under Notification No. 89/2005-Cus.
4. Interpretation of Section 61(2)(ii) of the Customs Act regarding interest payment.

Delay in filing appeals due to the death of the secretary:
The appeals were filed 21 days late due to the secretary's death, causing a delay in forwarding the appeal papers to the appellants. The Tribunal condoned the delay, noting the lack of negligence on the part of the appellants and the sufficient cause preventing timely filing. After allowing the condonation of delay application, the main appeals were taken up for disposal.

Liability to pay interest on duty discharged using DEPB scrips for delayed warehousing:
The appellants imported HDPE/LDPE, warehoused the goods using Bills of Entry, and cleared them utilizing DEPB scrips. Due to the goods exceeding 90 days in the warehouse, the appellants were held liable to pay interest on the duty discharged using DEPB scrips for the delay. The appellants paid the interest amounts as specified. They sought a refund of the interest paid, claiming exemption under Notification No. 89/2005-Cus. The lower authorities rejected the refund claims, citing no duty exemption on the goods. However, the Tribunal found that as there was no duty liability on the cleared goods under the notification, the appellants were not liable to pay interest on the duty quantified, entitling them to a refund.

Interpretation of Section 61(2)(ii) of the Customs Act regarding interest payment:
The Tribunal analyzed Section 61(2)(ii) of the Customs Act, which stipulates interest payable on warehoused goods beyond 90 days. The provision requires interest on the duty payable at the time of clearance of the goods. Since the goods were cleared under an exemption notification, exempting them from duty payment, the Tribunal concluded that there was no duty liability on the cleared goods. Therefore, demanding interest from the appellants for clearances was unwarranted. The appellants were deemed eligible for a refund of the interest paid and entitled to interest under Section 27A of the Customs Act, 1962. Consequently, the appeals were disposed of in favor of the appellants.