2014 (5) TMI 787 - AT - Customs

Remand for Interest on Expired Goods in Bonded Warehouse: Liability, Quantification, and Hearing

The Tribunal remanded the case regarding liability of interest on expired goods in a bonded warehouse to the lower authority for quantification. The ... Waiver of interest - Duty already paid - Goods kept in warehouse even after expiry of warehousing period - Held that:- The period involved is from 1976. The statutory provision for payment of interest under Section 61 of the Customs Act, 1962 was not existence prior to 23-12-1991 and the appellant have paid duty on 31-3-2004. Therefore the appellant are liable to pay interest from 23-12-1991 till the date of payment of duty. The appellant are contesting the quantification of the interest with effect from 23-12-1991. In these circumstances, case is remanded to the lower adjudicating authority for the limited purpose of quantification of interest from the date of introduction of the provisions for interest. The appellant are at liberty to produce document in support of their claim for the quantification of the amount of interest - Decided in favour of assessee. Issues: Liability of interest on expired goods in bonded warehouse.Analysis:1. The appellant appealed against the Order-in-Appeal upholding the liability of interest on expired goods in their bonded warehouse.2. The appellant imported various items and warehoused them under Section 60 of the Customs Act, 1962. 931 consignments with expired shelf life remained in the warehouse after the warehousing period.3. The department demanded duty and interest for the expired goods. The appellant paid duty but requested waiver of interest, which was rejected.4. The appellant argued they had relinquished the title of the goods and requested destruction of expired goods, which the department did not consider. The appellant contested the quantification of interest.5. The department opposed the appellant's claim of relinquishment and destruction, stating the COD only considered the interest issue. The appellant had already paid duty, leaving interest as the remaining issue.6. The Tribunal noted the sole issue was quantification of interest from 23-12-1991, as the statutory provision for interest payment under Section 61 of the Customs Act, 1962 did not exist before that date. The appellant was liable to pay interest from 23-12-1991 till the duty payment date. The case was remanded to the lower authority for quantification, allowing the appellant to present supporting documents and granting a hearing opportunity.