Interest on warehouse overstay under the Customs Act was found prima facie unsupported on the facts placed before the Tribunal.

Interest on duty foregone for goods imported under the EOU scheme and retained in a bonded warehouse beyond the permitted period was treated as not prima facie recoverable under Section 61 of the Customs Act on the facts shown. The demand was challenged because no provision in the Customs Act, the rules made under it, or the EXIM Policy was identified as authorising interest for the alleged overstay period, and Section 61(2)(ii) was considered apparently inapplicable. On that basis, waiver of pre-deposit was granted and recovery of the interest demand was stayed.

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Issues: Whether interest was prima facie recoverable under Section 61 of the Customs Act on duty foregone in respect of goods imported under the EOU scheme and kept in bonded warehouse beyond the permitted period.

Analysis: The demand was questioned on the ground that no provision of the Customs Act, the rules made thereunder, or the EXIM Policy was shown to authorise levy of interest on the alleged overstay period. The clause cited by the Revenue under Section 61(2)(ii) was found to be apparently inapplicable to the facts placed before the Tribunal.

Outcome: Waiver of pre-deposit granted and recovery of the interest demand stayed.

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