1989 (6) TMI 176 - AT - Customs

Summary

Issues Involved:
1. Applicability of Section 15(1)(b) of the Customs Act for determining the rate of duty.
2. Legality of demand notice dated 8-5-1985 and subsequent orders.
3. Maintainability of the appeal before the Tribunal.
4. Calculation and applicability of interest under Section 72(1)(b) of the Customs Act.

Detailed Analysis:

1. Applicability of Section 15(1)(b) of the Customs Act for determining the rate of duty:
The appellants argued that the rate of duty applicable should be the rate in force on the date of actual removal of the goods from the warehouse, as per Section 15(1)(b) of the Customs Act. They contended that since the goods were exempted from duty by notifications effective from 17-3-1985, no duty was payable at the time of removal. However, the Tribunal noted that Section 15(1)(b) applies to goods cleared under Section 68 of the Customs Act, which involves presenting a bill of entry and obtaining clearance from the proper officer. In this case, the goods were not cleared under Section 68 but under Section 72, as they were not removed within the warehousing period. Therefore, the rate of duty in force on the date of filing the into-bond bill of entry was applicable, not the rate on the date of removal.

2. Legality of demand notice dated 8-5-1985 and subsequent orders:
The Assistant Collector issued a demand notice on 8-5-1985 under Section 72(1) of the Customs Act, directing the appellants to pay customs duty and interest on the un-cleared goods. The appellants responded, arguing that the goods were exempted from duty as per the notifications. The Assistant Collector, after granting a personal hearing, issued an order on 25-6-1985, reiterating the demand for duty and interest. The appellants paid the demanded amount under protest and filed an appeal against the order dated 25-6-1985. The Tribunal found that the Assistant Collector's orders dated 8-5-1985 and 25-6-1985 were merged, and the Collector (Appeals) addressed the issues raised in the appeal, including the liability for duty and interest.

3. Maintainability of the appeal before the Tribunal:
The Revenue raised a preliminary objection, arguing that the appeal was not maintainable as the appellants did not file an appeal against the demand notice dated 8-5-1985. The Tribunal rejected this objection, citing various judicial precedents. It held that the Assistant Collector's orders of 8-5-1985 and 25-6-1985 were merged, and the Collector (Appeals) had addressed the issues in his order. Since the Revenue did not file a cross-appeal or objection, they could not raise the preliminary objection at this stage. The Tribunal concluded that the appeal before it was maintainable.

4. Calculation and applicability of interest under Section 72(1)(b) of the Customs Act:
The appellants were directed to pay interest on the duty for the period from 16-9-1984 to 15-5-1985, as per Section 72(1)(b) of the Customs Act. The Tribunal upheld the calculation and applicability of interest, noting that the goods were not cleared within the warehousing period, and the interest was recoverable for storage beyond the bonding period. The Tribunal found no illegality in the Assistant Collector's order regarding the interest calculation.

Conclusion:
The Tribunal upheld the orders of the lower authorities, concluding that the rate of duty applicable was the rate in force on the date of filing the into-bond bill of entry, not the date of removal. The appeal was dismissed, affirming the legality of the demand notice and subsequent orders, and the calculation of interest under Section 72(1)(b) of the Customs Act.