2008 (8) TMI 181 - AT - Customs

Goods cleared from the warehouse beyond the permitted warehousing period leviability of interest - clearance was made by debits in DEPB scrips to extent of BCD and CVD payable on goods such debit is a mode of payment of duty and is no longer in nature of declaring the goods to be exempt from duty - held that, any amount of BCD or CVD paid by way of debit in DEPB scrips on any warehoused goods at the time of its clearance from the warehouse must carry interest u/s 61(2) of the Customs Act

Summary

Issues:
1. Out-of-turn disposal of appeals based on settled common issues.
2. Payment of interest on duty debited in DEPB scrips for warehoused goods cleared beyond the permitted period.

Issue 1: Out-of-turn disposal of appeals
The Tribunal considered the miscellaneous applications for out-of-turn disposal of the appeals, as the common issue involved was settled by the Tribunal's decisions. The ld. counsel for the appellant presented the case comprehensively, and after hearing both sides, the appeals were taken up for consideration.

Issue 2: Payment of interest on duty debited in DEPB scrips
The appellants imported "Acid Grade Fluorspar" and cleared the goods from the warehouse under ex-bond Bills of Entry, availing Customs Notifications exempting Basic Customs Duty (BCD) and Countervailing Duty (CVD). The goods were cleared by debiting in DEPB scrips beyond the interest-free warehousing period, leading to show-cause notices for interest on the extended warehousing period. The Revenue contended that interest is leviable on the amount debited in DEPB scrips under Section 61(2) of the Customs Act, irrespective of duty payment mode. The appellant argued that as goods were cleared under exemptions, no interest was payable on DEPB debits. The Tribunal noted the Revenue's position that DEPB debits represent duty payment and cited relevant case laws and circulars supporting the duty-paid nature of DEPB debits. It held that any BCD or CVD paid via DEPB scrip debits on warehoused goods beyond the allowed period must attract interest under Section 61(2) of the Customs Act. Consequently, the appeals were dismissed.

This judgment clarifies the liability of interest on duty debited in DEPB scrips for warehoused goods cleared beyond the permitted period, aligning with statutory law and case law interpretations. The decision emphasizes the duty-paid nature of DEPB debits and the obligation to pay interest for extended warehousing periods, even when goods are cleared under exemptions.