MODI RUBBERS LTD Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) SHRI Ravinder Narain, ld. Advocate arguing the stay petition submits that the Collector has asked for deposit of interest though the period of warehousing was to expire in December, 1999. He submits that such a direction is clearly contrary to the terms of Section 61 of the Customs Act. He submits that pursuant to this direction, the appellants have received a notice on 27 -10 -1999 stating that "As the demand made under Section 72(1) of the Customs Act, 1962, made in the inter -est -cum -demand notice issued under C.No. V(30)91/Tech/Modi/97/Pt -I, dated 6 -10 -1999 has not yet been discharged by you, I hereby give you notice under Section 72(2) of the Act (i) that the goods specified in the enclosed An -nexure -I have been detained with a view to effect recovery of the duty as per this office notice referred to above (ii) that if the demand be not discharged within 5 days (five days) from the date of this notice, the goods will be disposed of by auction under the same Section without further reference to you without prejudice to your liability for any further charges accrued in respect of the goods or due under the bond executed by you and (iii) that if the sale proceeds be not sufficient to cover the full amount of duty warehouse rent and all other charges, you will be liable under the terms of the bond executed by you for payment of the balance remaining and proceedings will be taken against you under that bond for the recovery of such balance." He submits that the operation of this order may be stayed.

(2.) SHRI Mewa Singh, ld. SDR submits that when the goods are permitted to be warehoused, the duty was quantified and, therefore the interest should be quantified also.

(3.) HEARD the rival submissions. We find that Section 61 provides for charging of interest. This interest is charged after quantifying the amount of duty. The duty is quantified at the time of clearance of the goods. In the instant case, warehousing period has been extended upto December, 1999. Thus clearance has not taken place. Since clearance has not taken place, therefore the duty cannot be quantified because for quantification of the duty which is rate of duty applicable on the date of clearance of the warehoused goods is required. We agree with the contention of the Counsel that the question of charging interest on the date of clearance. Therefore the direction of the authority are contrary to the provisions of law. In this view of the matter, we set aside the stay operation of the impugned order, and direct the authority below not to take coercive action till finalisation of the appeal. This stay petition is therefore allowed. Copy of this order should be issued Dasti to the appellants.