Warehousing interest amendment applies to post-1 June 2001 clearance, making interest payable on ex-bond removal.

The warehousing interest-free period under Section 61 of the Customs Act was reduced by amendment from six months to one month with effect from 1-6-2001, and the amended provision applied to goods cleared from bond after that date. Interest became payable on clearance on the duty then due, because the relevant event was removal from the warehouse rather than the original date of warehousing. The amendment operated prospectively to post-commencement removals, so goods taken out after 1-6-2001 attracted interest under the revised rule and the refund claim failed.

---

---

Issues: Whether interest on warehoused goods was payable under the amended provisions when the goods were removed from the warehouse after 1-6-2001, and whether the reduced interest-free period applied only prospectively.

Analysis: The statutory period under Section 61 of the Customs Act was amended by Section 106 of the Finance Act, 2001, reducing the interest-free warehousing period from six months to one month with effect from 1-6-2001. Since the goods were cleared from the warehouse after the amendment came into force, interest became payable at the time of removal on the duty then payable. The amendment was applied prospectively to the event of clearance, not retrospectively to the date of original warehousing. The Tribunal also noted that a similar approach had been taken in the context of amended credit restrictions under Rule 57G of the Central Excise Rules, 1944.

Conclusion: Interest was correctly demanded on the warehoused goods removed after 1-6-2001, and the refund claim was rightly denied.

Final Conclusion: The amended warehousing interest provision governed removals made after its commencement, so the assessees remained liable for interest up to the date of ex-bond clearance.

Ratio Decidendi: Where an amendment reducing the warehousing interest-free period comes into force before removal of goods from bond, interest is chargeable on clearance in accordance with the amended provision, even if warehousing began earlier.

---