ISPAT INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) Appellant was issued a Show Cause Notice F/No. VIII (72 -73(63/94 dt. 20.12.1994 stating as the appellant was clearing H.R. Coils, deposited in the Warehouse, in a piece -meal manner on payment of duty after getting the Bills of entries for home consumption assessed. In terms of Section 47(2) of the Customs Act, 1962, if the importer fails to pay the import duty under Section 47(1) within seven days from the date on which the Bill of Entry is returned to him for payment of duty, the importer is liable to pay interest. Based on the same, a Notice was issued alleging that appellant had made payment of duty and effected clearance of Warehoused Goods after expiry of the period of seven days from the date on which the Bills of Entry were returned to him for payment of duty and consequently appellant was liable to pay interest for the period of delay and the interest due was demanded. Appellant was also issued two further show cause notices on identical grounds. The show cause notices were issued on 20.12.1995 demanding interest for the period May, 1994 to September, 1994, on 10.4.1994 for the period October, 1994 to February, 1995 and on 1.6.1995 for the month of March, 1995.

(2.) The Assistant Commissioner of Central Excise by order in original No. 65 -67/99/DN II/D dropped the Notices on the grounds that Section 47(2) provides for payment of interest by importer only in respect of goods covered under Section 47(1) and that interest under Section 47(2) could not be levied on goods covered by any other Section of the Act unless it is specifically provided in the said Section of the Act and held that as appellant cleared goods for home consumption under Section 68 of the Customs Act, 1962, the provision of Section 47(2) would not be applicable to any goods cleared under this Section.

(3.) On an appeal filed by Commissioner, the Commissioner (Appeals) set aside the order passed by the Asst. Commissions and confirmed demand for interest on the grounds that the Hon'ble Tribunal in the case of Pesticide Industries v. Collector of Customs, Jaipur has held that in case of goods falling under/Section 61(1)(b) of the Customs Act 1962 not only the period of warehousing is restricted to 30 days but also that the interest burden in respect of warehoused goods commences after the Bill of Entry is assessed and returned to the importer. Commissioner (Appeals) further held that the accrual of interest commences even while the goods are warehoused. This order relied upon a Madras Custom House Public Notice No. 186/89 dated 16.11.1989 wherein it was clarified that interest would commence after seven days of returning the assessed Bill of Entry. Hence this appeal.