2017 (10) TMI 414 - AT - Customs

Rectification of mistake - Ld. Counsel pointed out that the said reliance was misplaced as the said order of Hon ble Apex Court the word interest was not with reference to the duty liability - Held that - the order dt. 4.11.2016 misconstrued the term interest appearing in the judgment of Hon ble Apex Court in the case of Kesoram Rayon 1996 (8) TMI 109 - SUPREME COURT OF INDIA , however The term interest in the said decision does not relate to the interest on duty but on the other charges. This is so as when the demand itself has been set aside there cannot be recovery of interest. In view of above, there is an apparent error in the order dt. 4.11.2016 - ROM application allowed.

Summary

Issues: Rectification of mistake application regarding demand of interest on duty liability.

The judgment pertains to a rectification of mistake application filed by M/s. Plastrulon Processors Ltd. concerning an order dated 4.11.2016. The applicant had relinquished the title to goods with Customs under Section 60 of the Customs Act, 1962. The demand of duty was set aside based on a decision of the Hon'ble High Court of Karnataka. However, the demand of interest was upheld in the original order, citing a decision of the Hon'ble Apex Court in the case of Kesoram Rayon Vs. Commissioner of Customs, Calcutta. The Ld. Counsel argued that the reliance on this judgment was misplaced as the term 'interest' in the said decision did not pertain to interest on duty liability. The Circular No.42/2003-Cus. was referred to, clarifying that upon relinquishment of goods, the importer is not liable to pay duty, but there was confusion regarding interest accrued on duty till relinquishment date.

The Ld. Counsel contended that the confusion arose from the text of the proviso in the Customs Act amendment of 2003, emphasizing that interest mentioned in the proviso did not relate to interest accrued on duty. The Tribunal considered the arguments and found that the term 'interest' in the judgment of the Hon'ble Apex Court did not refer to interest on duty but on other charges. As the demand of duty was set aside, the recovery of interest was deemed inappropriate. Consequently, the Tribunal rectified the mistake in the order by substituting the relevant paragraphs. Para 5.3 was modified to state that since the demand of duty was set aside, there was no basis for the recovery of interest. Para 6 was amended to allow the appeal. The rectification of mistake application was allowed based on the above terms, and the judgment was pronounced on 31/08/2017.