JAYATHI KRISHNA AND CO. Vs. CC

JUDGEMENT

(1.) THIS appeal arises from Order -in -Original dated 4.12.1998 passed by the Commissioner of Customs, Chennai denying the appellants benefit under DEEC scheme and directing them to clear the goods which are bonded by paying duty and interest in terms of the provisions of Customs Act, 1962. The contention of the appellants are that the goods had been originally imported by one M/s. Square D' Bio -tech Ltd., who imported the impugned goods namely Polypropylene Granules and bonded the goods vide Bond No. 239/96 dated 5.1.1996 at CWC Virugambakkam. These goods were sold to the appellants and the appellants executed a double duty bond under Section 59(3) of the Customs Act covering altogether 10 ex -bond bills of entry for clearance of the goods under transferable under DEEC licence. It is the contention of the appellants that they applied for clearing the goods in terms of the licence and the scheme referred to, however the Commissioner refused to grant them the benefit and passed the impugned order. It is their contention that the facts of the present case are squarely covered by the ruling of the judgement rendered by the Hon'ble Supreme Court in the case of M/s. Prathiba Processors v. UOI as . It was cited before the Commissioner, who has not applied the same on the following rulings:

(2.) THE learned advocate submits that in the present case, the appellants cannot be denied the benefit of DEEC scheme and if the benefit of the scheme is given to the appellants, logically it follows that no duty is leviable on the goods and are required to be released from the warehouse. It also follows that no interest is leviable on such goods which are required to be cleared at 'nil' rate of duty. She points out that the Hon'ble Supreme Court judgement cited supra is directly on the same issue on identical facts and the Supreme Court clearly laid down that when the goods at the time of removal from warehouse are wholly exempted from payment of duty under DEEC scheme, then in such instance, the liability to pay interest cannot be saddled on a non -existing duty. It has been further held in the cited case that liability to pay interest under Section 61(2) of the Customs Act is solely dependent upon the exgibility or actual liability to pay duty. Therefore, the learned advocate submits that attempt made by the Commissioner to deny the benefit and also to deny the benefit of the scheme is totally unjustified and the Commissioner has not given any reasons to deny the benefit. She therefore, submits that the appeal is required to be allowed and a direction may be given to the Customs authorities to clear the goods under the scheme without charging duty and interest.

(3.) HEARD learned D.R., who submits that the background of the case is required to be viewed inasmuch as that the original importer M/s. Square D' Biotech had bonded the goods without claiming the benefit of DEEC scheme. The bond had also expired on 4.1.1997. They have not made any application for extension of the bond and therefore, the question of extending the benefit to the present party does not arise. As there was no such claim filed by the original importer, therefore, the order of the Commissioner is totally justified. He also submits that the reliance made by the Commissioner on the judgement of Hon'ble Supreme Court in the case of Kesoram Rayon as is totally justified.