Customs warehousing interest applies only while goods remain warehoused beyond the permitted period, not after clearance.

Interest under the Customs warehousing scheme arises only while goods remain warehoused beyond the permitted period, and ceases once the goods are cleared within that period. Section 59(1)(b) cannot be used on its own to create an interest liability, because the charging basis operates only in conjunction with Section 61. The later enhanced interest rate under Notification No. 143/83 could not apply to goods already cleared in 1982. On that reasoning, no interest was leviable and the demand was unsustainable.

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Issues: Whether interest was leviable on warehoused goods after they had been cleared from the warehouse within the prescribed warehousing period, and whether Section 59(1)(b) could be applied independently of Section 61 of the Customs Act, 1962.

Analysis: The goods were cleared from the warehouse within the one-year warehousing period and therefore ceased to be warehoused goods on clearance. Interest under Section 61 applies only where warehoused goods remain in the warehouse beyond the prescribed period. Prior to 13-5-83, Section 61 did not provide for recovery of interest, and the enhanced rate under Notification No. 143/83 dated 13-5-83 could not govern goods already cleared in 1982. Section 59(1)(b) could not be invoked in isolation, because the interest liability arose only in conjunction with Section 61.

Conclusion: No interest was leviable on the goods, and the demand was unsustainable. The appeal was against the assessee.

Ratio Decidendi: Interest under the Customs warehousing provisions is chargeable only while goods remain warehoused beyond the permitted period, and the charging provision cannot be applied independently after the goods have ceased to be warehoused goods.

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