R.K.CHEMICALS Vs. CHIEF COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) This petition under Article 226 of the Constitution of India, the petitioner challenges the action of the Customs Department in seeking to recover interest amounting to Rs.2,86,877/ from the petitioner in respect of duty payable on goods which were imported in the year 1996. It is the case of the petitioner that at the time of imports, the goods were provisionally assessed under Section 18 of the Customs Act, 1962 (the Act) and the same at the relevant time did not provide for payment of any interest on the duty payable on goods provisionally assessed.

(2.) Briefly, the facts leading to this petition are:

(3.) The grievance of the petitioner before us is that the demand for interest by the revenue is without jurisdiction. This is because the said goods were provisionally assessed at the time of import in the year 1996 under Section 18 of the said Act. At that time, there was no provision in Section 18 of the said Act to charge any interest on the payment of duty determined at the time of finalization of the petitioner's assessment. It was submitted that the Apex Court in Essar Steels Ltd. v/s. Union of India, 2007 210 ELT 644 has held that no occasion to charge interest can arise when the assessment was originally made provisionally. Thus, it is the case of the petitioner that the demand of interest made by the revenue is without jurisdiction as the provision for charging interest in respect of the provisional assessment came into statute book only with effect from 13 July 2006. Consequently, it is submitted that the demand for interest made by the revenue be set aside.