Interest on warehoused goods is not payable merely because clearance occurs after the warehousing period.

Warehoused goods cleared after the statutory warehousing period did not attract interest liability under the Customs Act, 1962. The High Court followed binding Supreme Court rulings that importers are not liable to pay interest merely because the goods were exempt from duty at the time of clearance. On that settled legal position, the direction fastening interest could not stand, and the adverse writ order was set aside.

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Issues: Whether the importer was liable to pay interest on warehoused goods under the Customs Act, 1962 when the goods were cleared after the statutory warehousing period.

Analysis: The appeal concerned the demand of interest on warehoused goods under the statutory warehousing scheme. The Court followed the binding Supreme Court rulings which had already settled that importers are not liable to pay interest in respect of warehoused goods merely because the goods stood exempted from duty at the time of clearance. In view of that legal position, the direction fastening liability to pay interest could not survive.

Conclusion: The importer was not liable to pay any interest on the warehoused goods, and the adverse direction of the writ court was set aside.

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