The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that no customs duty interest was payable on the warehoused goods during the validity of the warehousing period under section 15 of the Customs Act,1962.
Top Forty Suspension (P) Ltd, the appellant assessee is a 100% Export Oriented Unit (EOU) and had imported certain capital goods availing benefit of Notification No.53/97 and domestically procured capital goods availing Notification No.1/95-Central Excise.
The assessee appealed against the order passed by the adjudicating authority for confirming the demanding Customs duty of Rs.45,84,960/- and Central Excise duty of Rs.4,79,056/- along with interest and penalty.
S.C. Jain, the counsel for the assessee contended that the order wrongly demanded the Customs duty at the rate applicable on the day of import rather than the rate of duty in terms of Clause 5(a) of Notification No.53/97 and in terms of Section 15 of the Customs Act.
He also submitted that the Commissioner had wrongly assumed that the project export turnover of United States Dollars (USD) 51 Lakhs was the export obligation; moreover, the export obligation fulfilled by the assessee of USD 48,595 had not been taken into consideration.
Siddharth Jaiswal and Shivam Syal, the counsels for the department relied on the decisions made by the lower authorities and contended that in case of failure to achieve positive Net Foreign Exchange (NFE), duty was payable at the rate applicable on the day of import and the interest was payable from the date of importation of the said goods till the payment of such duty.
The Bench observed that in terms of Section 15 read with Section 68 of the Customs Act 1962, the interest liability will arise on the date of expiry of the warehousing license as in terms of Notification No.67/1995.
Also observed that in the case of International Knitting Ltd, the court held that the place may be a warehouse at the time of deposit of goods but it may not be so at the time of removal of goods from that place and interest is payable in terms of Section 61 with Section 2(44) of the Customs Act, the goods are liable to interest on the delayed payment of duty.
The two-member bench comprising S S Garg(Judicial) and Anjani Kumar (Technical) held that no interest was payable on the warehouse goods for the period they remained in a custom-bonded warehouse.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
