COMMR. OF CUS., VISAKHAPATNAM Vs. STILBENE CHEMICALS LTD.

JUDGEMENT

(1.) THE Revenue has filed this appeal against the Order -in -Appeal 138/2005 (V -l) -CE, dated 28 -11 -2008, passed by the Commissioner of Customs & Central Excise (Appeals), Visakhapatnam.

(2.) SHRI K. Sambi Reddy, the learned Departmental Representative appeared for the Revenue and Shri S. Viswanathan, learned Advocate appeared for the Respondents.

(3.) THE Respondent is a 100% E.O.U. They imported two consignments of Cyanuric Chloride and warehoused the same. The permitted warehousing period expired. The Assistant Commissioner initiated the proceedings against the Respondents and demanded duty along with interest @ 20%.: The duty was paid by the respondents. The interest was also demanded from the date of expiry of the warehousing period in terms of Section 61(1) of the Customs Act, 1962. Therefore the interest was also confirmed. The respondent was aggrieved over the decision of the Original authority. Hence they appealed to the Commissioner (Appeals). On examining the entire matter and relying on the decision of the Honble High Court of Delhi in the case of Ghahshyam Das Suresh Chand v. Union of India reported in 2004 (165) E.L.T. 514 (Del), the Commissioner (Appeals) held that no interest is payable by the appellant in the instant case. The duty was paid on 24 -8 -99 and the demand notice was issued on 18 -11 -1999, i.e. the duty obligation was fulfilled before the issue of the demand notice. In the High Court decision, it was held that the interest liability beyond the permitted period of warehousing does not accrue automatically, but needs to be triggered only by the invocation of bond obligation under Section 59(1)(b) of the Customs Act, 1962 by raising a demand notice and the liability can utmost be from the date of the demand or from the date specified in the demand notice. Therefore in a case where the demand notice is issued rate for recovery of interest, the interest cannot be collected for the period covering the period beyond the purview of Section 61(1) of the Customs Act, 1962. He also in his order had referred to the view of the Supreme Court according to which wherever extension of warehousing period is permitted by the Government, the applicability of Section 61 seizes and any interest will accrue only after a demand is issued in this regard under Section 59(1) of the Customs Act, 1962.