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Issues Involved:
1. Liability to pay interest after payment of duty and issuance of out of charge order. 2. Period of warehousing permissible under Section 61 of the Customs Act. Issue-wise Detailed Analysis: 1. Liability to Pay Interest After Payment of Duty and Issuance of Out of Charge Order: The appellants argued that they should not be liable to pay interest once the duty on the goods has been paid and an out of charge order has been passed by the Customs authorities. They contended that the interest should be calculated only up to the date of payment of duty, not up to the date of physical removal of the goods from the warehouse. They referred to Section 61 of the Customs Act, which states that interest is payable on the amount of duty on warehoused goods from the expiry of the warehousing period till the date of clearance of the goods from the warehouse. The Department, on the other hand, maintained that interest is payable until the goods are physically removed from the warehouse. According to them, the interest liability continues to subsist until the actual removal of the goods, as per Section 61(2) read with Section 15 of the Customs Act, which states that the relevant date for payment of duty is the date on which the goods are actually removed from the warehouse. The Tribunal observed that the term "clearance of the goods from the warehouse" should be read in the context of Section 61(2). It noted that the interest is charged for the period the duty amount is held over by the person who has warehoused the goods. Once the duty is paid, there is no outstanding duty, and thus no interest accrual after the date of payment of duty. The Tribunal concluded that once the duty and other charges are paid, and an out of charge order is passed, the goods should be considered as cleared for home consumption. Any additional interest liability due to subsequent removal of goods would only apply to any further duty that becomes payable. 2. Period of Warehousing Permissible Under Section 61 of the Customs Act: The appellants argued that the warehousing period available to them should be one year instead of three months, as provided under Section 61 of the Customs Act. They claimed that their goods should be considered as "non-consumable stores," which are allowed a one-year warehousing period. The Tribunal examined the definition of "stores" under Section 2(38) of the Customs Act, which refers to goods for use in a vessel or aircraft, including fuel, spare parts, and other articles of equipment. The Tribunal found no merit in the appellants' argument, as the zinc concentrates imported for manufacturing zinc did not fall within this definition. The Tribunal also noted that the goods were allowed to be warehoused for three months initially, and the appellants had not challenged this period. Therefore, the Tribunal found no merit in the appellants' plea for a one-year warehousing period. Conclusion: The Tribunal held that the appellants were required to pay interest only up to the date of the out of charge order for clearance of the goods for home consumption. Any additional interest liability would apply only to any further duty payable due to subsequent removal of the goods. The Tribunal also rejected the appellants' plea for a one-year warehousing period, affirming that the permissible period was three months. The appeal was allowed in the above terms.
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