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2023 (5) TMI 819 - AT - CustomsDemand of Interest - Commissioner has not recorded any reason for demanding the interest under Section 47(2) of the Customs Act - HELD THAT - From a plain reading of the Section 125 of the Customs Act, it is evident that Section 125(2) is not a section for confirmation of demand of duty, but it creates an obligation on the importer/person seeking redemption of the goods as per Section 125(1) to pay the amount. Section 125(2) clearly provides only for payment of duty - thus, the demand for interest made cannot be upheld. In the case of COMMISSIONER OF CUSTOMS VIJAYAWADA VERSUS RUCHI SOYA INDUSTRIES LIMITED 2016 (7) TMI 88 - CESTAT BANGALORE , Tribunal by majority has held that there was no delay in paying duty assessed in terms of Section 47(1) of the Act. Sub Section (2) of Section 47, states that interest is payable if the duty is not paid within 2 days from the date on which the assessed bill of entry is returned to the assessee for payment of duty. I have to agree with the Member (J) that in the present case in terms of Section 47(1), there is no delay in payment of duty and consequently there is no liability to pay interest under Section 47(2) of the Act. There are no merits in the demand for interest made by the impugned order. The impugned order needs to be modified to that extent - appeal allowed.
Issues:
Challenge to demand of interest under Section 47(2) of the Customs Act. Analysis: The appeal challenges the demand of interest under Section 47(2) of the Customs Act, 1962. The appellant argues that the provisions of Section 47(2) are not applicable in the present case as the duty was paid as assessed per the Bill of Entry. Referring to precedents, the appellant contends that Section 125(2) does not provide for payment of interest, and therefore, the demand for interest is not sustainable. The appellant relies on cases like Ruchi Soya Industries Ltd. and Bharat Hospital & Institute of Oncology to support their argument that interest cannot be demanded without a confirmed duty under Section 28. The Authorized Representative, however, supports the findings in the impugned order. Upon considering the impugned order and the submissions made during the appeal, the Commissioner had quantified the duty payable based on Tribunal orders. The Commissioner found that the duty payable was only 40% of the assessable value, amounting to Rs.3,11,022. Notably, the Commissioner did not provide a reason for demanding interest under Section 47(2) of the Customs Act. Section 125(2) was analyzed, revealing that it only obligates the importer to pay the duty, not interest. Relying on precedents like Ruchi Soya Industries Ltd. and Bharat Hospital & Institute of Oncology, the Tribunal concluded that the demand for interest could not be upheld. The impugned order was modified to drop the demand for interest, and the appeal was allowed accordingly. In conclusion, the Tribunal found no merit in the demand for interest under Section 47(2) of the Customs Act and modified the impugned order to exclude the interest component. The decision was based on a thorough analysis of relevant legal provisions and precedents, ensuring a fair and just outcome for the appellant.
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