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TMI Blog2008 (8) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... claims for interest amount of Rs. 73,53,413/- and Rs. 48,57,048/- were rejected holding that interest under Section 61(2)(ii) of the Customs Act, 1962 is chargeable up to 14-1-2005 (date of finalization of assessment) and not up to 29-9-2004 (date of payment of duty). Hence these appeals. 2. The issue involved in the 2 Appeals C/143/07/MUM and C/144/07/MUM is common. Hence both these appeals are taken up together for disposal. The principal issue involved is as to whether on the amount of duty payable on the warehoused goods at the time of clearance of warehoused goods, the interest is payable for the period from the expiry of the 90 days till the date of payment of duty or it is payable till the date of finalization of assessment of duty finally and clearance of the warehoused goods, in terms of provisions of Section 61(2)(ii) of the Customs Act, 1962. 3.1 The facts of the case in the Appeal No. C/143/07/MUM are that the Appellant deposited the goods into the warehouse on 23-4-2003, that were covered by 'Into bond Bill of Entry' No. 348470 dated 10-4-2003. The customs duty @ 25% + 16% CVD + 4% SAD was assessed, totalling to Rs. 19,60,62,265/-. The Appellant was asked on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against deposited amount of Rs. 2,36,69,461/-. 4. These two refund applications were rejected by the Assistant Commissioner of Customs (Bond Dept.) by his Order dated 31-7-2006 on the ground that the interest on duty amount on the warehoused goods is payable for the period subsequent to the permissible period up to their clearance by relying upon the judgment of Hon'ble Supreme Court in the case of Kesoram Rayon v. Collector of Customs [1996 (86) E.L.T. 464 (S.C.)] and held that the amount deposited on 29-9-2004 was duty in advance and 14-1-2005 is the date of final assessment and for quantification of payable interest on duty, interest up to this date is to be taken. The payable interest, thereby, was worked out to Rs. 3,47,09458/- (from 23-7-2003 to 14-1-2005) and Rs. 2,54,33,887/- (from 3-11-2003 to 14-1-2005) and after adjustment of amount deposited towards interest, further amount of Rs.12,63,249/- was determined as payable. The refund applications were dismissed. 4.1 An appeal was filed by the appellant before the Commissioner of Customs (Appeals), who also concluded that under Section 61(2)(ii), the interest is payable till the date of finalization of duty on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed between 29-6-1985 and 2-7-1985. The provisions of Section 61(2)(ii) of the Act as in the statute at that time were "till the date of clearance of the goods from the warehouse". Because of this material amendment, which was brought in the statute by the Finance Act, 1994, the ratio of the judgment in the case of M/s. Kesoram Rayon (supra) is not attracted to the facts herein. Further, the ratio of the judgment in the case of M/s. Siganporia Bros. (supra) of Hon'ble High Court at Bombay is also not applicable because the said judgment considered the provisions of Section 61 prior to 1983 and after its amendment w.e.f. 13-5-1983 and amendment in Section 61 w.e.f. 23-12-1991. This judgment dealt with the case of import consignment that was warehoused on 20-1-1983 and sought to be cleared after 13-5-1983. The amendment brought about by the Act No. 32 of 1994 dated 13-5-1994 was not before the Hon'ble High Court and thereby the ratio of this judgment is not attracted. 6.2 Shri Sharma further submitted that- (i) Out of the amount deposited towards duty on 29-9-2004 of Rs. 19,60,62,265/- and Rs. 18,94,59,501/-, amount of Rs. 4,02,432,595/- and Rs. 3,88,77,687/- was refunde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r interest on duty, the provisions of Section 61(2)(ii) also refer to Section 47. The learned JDR reiterated the reasoning of the learned Commissioner of Customs (Appeals) to support the plea that interest shall be payable on the amount of duty payable or due on the warehoused goods till the date of clearance of the goods from the warehouse and the duty paid on 29-9-2004 was 'Advance Duty' and only upon finalization of assessment of duty on 14-1-2005, the interest liability on duty ceases. 8. Heard both the sides as above and perused the records. 9. In the two appeals, the Appellant had deposited the amount towards duty on the "Ex-Bond Bill of Entry Home Consumption" and the rates of duty as were on the "Into-Bond Bill of Entry" were assessed on 29-9-2004 and duty was paid on 29-9-2004. The interest on this amount of duty was paid on 27-9-2004 and 29-9-2004 by way of challans prepared by Deputy Commissioner of Customs (Bond Dept.) The fact of payment of duty "Ex-Bond Home Consumption Bill of Entry" on 29-9-2004 is not in dispute. What is being disputed is that, the amount deposited on 29-9-2004 was "advance deposit of duty" and duty was assessed only on 14-1-2005 and therea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 59 of the Act. The difference between "tax", "interest" and "penalty" has been expounded by the Supreme Court in the case of A.C.C. v. Commercial Tax Officer (AIR 1981 S.C. 1887), the relevant portion is at Para 23. It reads "23. We are concerned in this case with the liability of the assessee to pay interest on the amount of tax which had remained unpaid. Tax, interest and penalty are three different concepts. Tax becomes payable by the assessee by virtue of the charging provision in a taxing statute. Penalty ordinarily becomes payable when it is found that an assessee has wilfully violated any of the provisions of the taxing statute. Interest is ordinarily claimed from an assessee who has withheld payment of any tax payable by him and it is always calculated at the prescribed rate on the basis of the actual amount of tax withheld and the extent of delay in paying it. It may not be wrong to say that such interest is compensatory in character and not penal." As could be seen from the above enunciation in tax law, interest is ordinarily claimed from a person who has withheld payment of any tax payable by him to the Government.............." 14. The Appellant has r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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