Interest on warehoused customs duty barred by exemption notifications; Revenue's challenge failed.

Interest could not be levied on customs duty payable on goods warehoused under Chapter IX of the Customs Act, 1962 where the governing exemption notifications expressly barred such levy. The dispute concerned an imported consignment by a 100% export oriented unit, but the only issue was the department's claim for interest. Reading the notifications of 09-02-1981 and 01-11-1995 together, the Court held that no interest demand was permissible on the warehoused goods. The Tribunal's acceptance of the assessee's case disclosed no legal error, so the Revenue's challenge failed.

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Issues: Whether interest could be levied on the customs duty payable on goods warehoused under Chapter IX of the Customs Act, 1962 in the light of the applicable exemption notification.

Analysis: The respondent had imported goods as a 100% export oriented unit and claimed exemption under the relevant notification. The dispute before the Court was confined to the department's claim for interest. The notification dated 01-11-1995, read with the earlier notification dated 09-02-1981, made it clear that no interest could be levied on customs duty payable on goods warehoused under Chapter IX of the Act. Since the Tribunal had accepted the assessee's case on that basis, no legal error was shown in the order under challenge.

Conclusion: Interest was not leviable on the customs duty payable on the warehoused goods, and the challenge by Revenue failed.

Ratio Decidendi: Where the governing exemption notification expressly bars levy of interest on customs duty payable on goods warehoused under Chapter IX of the Customs Act, 1962, such interest cannot be demanded.

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