Warehousing - Interest chargeable if goods dutiable when warehoused - Subsequent exemption from duty irrelevant - Customs - F. No. 475/10/89-Cus. VII

Warehousing - Interest chargeable if goods dutiable when warehoused - Subsequent exemption from duty irrelevant F. No. 475/10/89-Cus. VII Dated 15-9-1989 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Warehousing - Interest chargeable if goods dutiable when warehoused - Subsequent exemption from duty irrelevant. I am directed to say that representations have been received by the Board from the trade against the levy of interest on the amount of customs duty on warehoused goods which are cleared from the warehouses without payment of duty either for export or for home consumption. Importers have been disputing the levy of interest on the plea that when the goods are not at all levied to customs duty on clearances, they should not also be liable to the interest. References were also received from Collectors of Customs for clarification whether interest should be recovered on such duty free clearances. 2. The matter was referred to the Ministry of Law who have opined that the interest is leviable if the goods are dutiable at the time of warehousing and subsequent exemption of any kind may not get exemption from the interest which was due on the date of exemption unless the interest has been specifically waived under proviso to Section 61(2) of the Customs Act, 1962 (copy of their advice is enclosed). 3. The Board has decided that the interest shall be levied in cases where goods are cleared without payment of duty and such interest shall be calculated with reference to the rate of duty assessed, at the time of initial warehousing of the goods. Subsequently exemption of any kind shall not be regarded as automatically exempting such goods from interest liability.