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TMI Blog1990 (9) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... st in respect of the goods cleared demanding interest at 6% per annum and accordingly in the case of appeal No. 233/90 a demand of Rs. 2,15,225/- and in the case of appeal No. C/237/90 a demand of Rs. 45,752/- were confirmed. In the adjudication proceedings initiated by the Asstt. Collector, the Asstt. Collector held that since the goods were warehoused before 13-5-1983, the rate of interest on the goods warehoused on or before 13-5-1983 and cleared after that date will be only 6% and not 12% or no interest. Hence as per Sec. 59(b) of the Customs Act, 1962, the appellants are required to pay interest at 6% per annum and accordingly he has confirmed the demand under Sec. 59(b) read with Sec. 28 of the Customs Act. Against the aforesaid orders, the appellants went in appeal before the Collector (Appeals). The Collector (Appeals) while rejecting the appeals, have also observed that the interest of 12% is also payable in respect of the goods warehoused and continued to remain in bond after 13-5-1983 and cleared thereafter. The present appeals are against the aforesaid order of the Collector (Appeals). 3. Shri Hidayatullah, the learned Advocate on behalf of the appellants, took us thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f goods warehoused on or after 13-5-1983 and the interest prescribed under Notification No. 143/83 would not be applicable in respect of goods warehoused prior to 13-5-1983. He also contended that Sec. 50 of the Finance Act, 1983, under which the amendment of Sec. 61 has been carried out is not retrospective in operation and in that context he referred to Bemion Statutory interpretation and Maxwell Law of interpretation. [We do not propose to discuss these in detail because of the fact that Shri Mondal, SDR agreed that the amendment carried out under Sec. 50 of the Finance Act was not meant to be applied retrospectively.] 4. He, thereafter, contended that even the interest at 6% is not payable under Sec. 59 of the Customs Act. Sec. 59 is only a machinery provision for furnishing a bond. It is not a section providing for charge of interest. This came to be introduced only by way of amendment of Sec. 61 for the first time through the Finance Act of 1983 and the Notification fixing the rate of interest at 12% was also issued for the first time on 13-5-1983. Hence in the light of the Board s clarification and the Law Ministry s opinion, no interest is payable at all in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest at the rate of 6% per annum. Enforcement of any dues arising out of the bond is also permissible under Sec. 142(2) of the Customs Act. Accordingly, when the appellants have specifically given a bond for payment of interest at 6% they cannot now say that the bond is not enforceable against them. Moreover, there is a statutory provision under Sec. 59 and only by virtue of that provision the bond has been taken. In the circumstances, it is not correct to say that no interest is payable in respect of the goods warehoused prior to 13-5-1983. Even the Board s clarification referred to by the learned advocate does not lead to such a conclusion. The Board s clarification has been given in the context of the rate of interest fixed under Notification No. 143/83 dated 13-5-1983. The clarification does not state that no interest is payable at all. This clarification has been given in the context of amended provision of Sec. 61 of the Customs Act. Hence this clarification is to be taken that the rate of interest at 12% prescribed under Notification No. 143/83 could not be applied retrospectively and would not apply in respect of goods warehoused prior to 13-5-1983. In so far as the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) by rejecting the appeals of the appellants has only confirmed the aforesaid orders of the Asstt. Collector. The Collector (Appeals) cannot traverse beyond the scope of the orders of the Asstt. Collector, since the Department has not come in appeal before him seeking for enhancement of rate of interest from 6% to 12%. In this view of the matter, the question of going into the applicability of rate of interest at 12% in this case is not at all called for. The short point of the appeals is therefore limited to the consideration of the issue as to whether interest at 6% is chargeable at all in respect of the goods warehoused prior to 13-5-1983 and this is what we propose to consider. 8. The Board s clarification F. No. 473/ICO/83-CUS. VII dated 8-9-1983, the relevant extract of which is reproduced below: I am directed to say that a doubt has arisen whether the interest prescribed under Notification No. 143/83-Customs, dated 13-5-1983 is chargeable on the goods warehoused prior to 13-5-1983 even if extension is granted. It is clarified that the amended provisions would apply only in respect of goods warehoused on or after 13-5-1983." 9. From the above it can be seen th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand notice, all duties, rent and charges claimable on account of such goods under this Act, together with interest on the same from the date so specified at the rate of six per cent per annum or such other rate as is for the time being fixed by the Board. 12. From the above it is clear that the rate of interest at 6% is provided for on the total sum including the duties, rent and other charges. The appellants have also given a bond accordingly. It is not although this bond has been taken without any legal authority. The legal authority is provided under Sec. 59 itself. The rate of interest chargeable at 6% is on the total sum payable, which covers not only duties but also rent and other charges. However, under Sec. 61(2) of the Customs Act effective from 13-5-1983, it is laid down that where any warehoused goods remain in a warehouse beyond the period of one year or three months, as the case may be, by reason of the extension of the warehousing the period or otherwise, interest at such rate, not exceeding eighteen per cent, per annum, as is for the time being fixed by the Board, shall be payable on the amount of duty on the warehoused goods for the period from the expiry on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Advocate is the question of limitation of time. In this case, though the Asstt. Collector in his order has confirmed the demand under Sec. 59 read with Sec. 28 of the Customs Act, the learned SDR has argued that Sec. 28 is not applicable because of the fact that it relates to duties not levied, short-levied or erroneously refunded. In this case, the amount involved relates to interest payable and hence Sec. 28 is not attracted. The learned Advocate contends that as in the case of Modvat credit where this Bench has held that even erroneous credit of Modvat sought to be recovered under 57-I, is subject to the limitation under Sec. 11A. 16. We have considered both the arguments. Modvat credit relates to the credit of duty paid on inputs. When the credit has been taken on the inputs and utilised, duty payable on the finished product falls short to that extent and hence in that view we have held that it amounts to short-levy or non-levy. In this case, the amount sought to be recovered relates to interest and not to any duty short-levied or non-levied. Hence we are of the view that the learned Advocate s argument that it should be brought within the purview of Sec. 28 is not tenabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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