1993 (3) TMI 127 - HC - Customs

Summary

Issues:
Interpretation of liability to pay interest under Section 61(2) of the Customs Act, 1962 for periods before actual physical warehousing of imported goods.

Detailed Analysis:

1. Factual Background and Legal Question:
The writ petitioner imported goods but faced financial difficulties, leading to delays in warehousing. The issue was whether the petitioner is liable to pay interest under Section 61(2) of the Customs Act for the period before actual physical warehousing of the imported goods.

2. Petitioner's Contentions:
The petitioner argued that interest should not be payable before physical warehousing of the goods. They sought a direction for warehousing without interest payment and challenged the customs authorities' refusal to warehouse the goods due to delay.

3. Judicial Interpretation of Relevant Provisions:
The court analyzed Sections 2(44), 57, 58, 59, and 61 of the Customs Act. Section 61(2) specifies interest payment on warehoused goods beyond a year. The definition of "warehoused goods" in Section 2(44) emphasizes goods deposited in a warehouse.

4. Court's Interpretation and Decision:
The court held that interest under Section 61(2) is applicable only when goods are physically warehoused. The petitioner was not liable for interest during the period when the goods were not physically warehoused, as confirmed by the court order directing warehousing.

5. Rejection of Customs Authorities' Argument:
The court dismissed the customs authorities' argument that endorsing bond numbers equated to warehousing. It emphasized the necessity of physical warehousing for interest liability under Section 61(2).

6. Interpretation of Legislative Intent:
The judgment highlighted the legislative intent behind Section 61(2) to charge interest only on goods physically warehoused for over a year. It rejected the application of deeming provisions to expand the definition of warehoused goods.

7. Refund Order and Conclusion:
The court directed the customs authority to refund the amount deposited by the petitioner, concluding that no interest was payable under Section 61(2) of the Customs Act. The writ petition was disposed of with no costs awarded.

This detailed analysis of the judgment clarifies the interpretation of liability for interest under Section 61(2) of the Customs Act concerning the physical warehousing of imported goods.