2017 (11) TMI 955 - HC - Customs

Entitlement of interest - Section 28 of CA, 1962 - Proviso to Section 28AA - Held that - Proviso to Section 28AA gives an opportunity to those where demand u/s 28 has already been raised, but the duty has not been paid, to pay the same within three months from the date of enforcement of Section 28AA, which comes to 26.08.1995 - In the present case, we find no error on the part of respondents in demanding interest under Section 28AA, if otherwise other conditions provided under Section 28AA are satisfied - Learned counsel for the petitioner could not show any other error in impugned demand, warranting interference. Petition dismissed - decided against petitioner.

Issues Involved:
1. Demand for interest on delayed payment of duty under Section 28AA of the Customs Act, 1962.
2. Interpretation of Sections 28 and 28AA of the Customs Act, 1962.
3. Validity of demand letters issued by Customs Authorities.
4. Applicability of statutory provisions to the case.
5. Legal consequences of non-payment of duty within the specified period.

Analysis:

1. Demand for Interest on Delayed Payment:
The writ petition was filed by the U.P. State Bridge Corporation Limited (UPSBCL) challenging the demand letters issued by the Customs Authorities for interest on delayed payment of duty under Section 28AA of the Customs Act, 1962. The demand was based on the alleged delayed payment of arrears of duty, and the petitioner contended that the demand for interest was unjust and illegal.

2. Interpretation of Sections 28 and 28AA:
The court analyzed the provisions of Sections 28 and 28AA of the Customs Act, 1962. Section 28 deals with the notice for payment of duties not levied, short-levied, or erroneously refunded, while Section 28AA pertains to interest on delayed payment of duty. The court clarified that Section 28 is not applicable for demanding interest under Section 28AA and that the liability under Section 28 had already been determined earlier.

3. Validity of Demand Letters:
The court examined the validity of the demand letters issued by the Customs Authorities for interest on delayed payment. It was observed that the order determining the liability under Section 28 had been confirmed by the Apex Court, and no further notice under Section 28 was required for demanding interest under Section 28AA.

4. Applicability of Statutory Provisions:
The court discussed the applicability of the statutory provisions to the case at hand. It noted that Section 28AA, inserted by an amendment in 1995, imposed interest on delayed payment of duty and provided an opportunity for payment within a specified period to avoid interest liability.

5. Legal Consequences of Non-Payment:
The court emphasized that the defaulter had the opportunity to pay the duty within the stipulated period to avoid interest under Section 28AA. Failure to take advantage of this concession could result in the defaulter being liable to pay interest as per the statutory provisions. The court found no error in the demand for interest under Section 28AA in the present case.

6. Precedent and Dismissal of Writ Petition:
The court cited a Division Bench Judgment of the Bombay High Court to support its interpretation of the statutory provisions. Ultimately, the court dismissed the writ petition, stating that the demand for interest under Section 28AA was justified, and there were no grounds for interference in the impugned demand.

This detailed analysis of the judgment highlights the key issues involved, the court's interpretation of relevant legal provisions, and the reasoning behind the dismissal of the writ petition challenging the demand for interest on delayed payment of duty.

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