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<h1>Tribunal rules no interest on duty not paid. Appeal allowed, interest demand set aside.</h1> The Tribunal ruled in favor of the appellants, stating that since the goods were re-exported without payment of duty, they should not be liable to pay ... Customs - Interest on customs duty payable on warehoused goods Issues:1. Liability to pay interest on duty payable on imported goods.2. Interpretation of provisions of the Customs Act, 1962 regarding payment of interest.3. Applicability of case law on liability to pay interest on duty.Analysis:1. The appeal was filed against the orders passed by the Collector of Customs (Appeals) regarding the liability to pay interest on duty payable on imported goods. The appellants imported goods and warehoused them, clearing only a portion of the goods for home consumption. The remaining goods were re-exported after being warehoused for a specific period. The issue was whether interest should be paid on the duty payable for the goods re-exported after being warehoused beyond the normal period.2. The learned Advocate for the appellants contended that under the Customs Act, the liability to pay interest is linked to the liability to pay duty, and both must go together. He argued that since no duty was payable on the re-exported goods, the appellants should not be burdened with interest on a non-existing duty. The J.D.R. supported the Assistant Collector's reasoning that re-exportation does not absolve the liability to pay interest on duty payable on imported goods beyond the normal warehousing period.3. The Tribunal considered the submissions and referred to a decision of the Kerala High Court, emphasizing that the liability to pay interest is connected to the liability to pay duty. The Court highlighted that when goods are exempted from duty before removal from the warehouse, no interest can be charged on a non-existing duty. Applying this principle, the Tribunal ruled in favor of the appellants, stating that since the goods were re-exported without payment of duty, they should not be liable to pay interest on a non-existent duty. The appeal was allowed, setting aside the lower authorities' orders demanding interest from the appellants.This judgment clarifies the interconnection between the liability to pay duty and interest under the Customs Act, emphasizing that interest is a consequence of duty payment. It underscores that when goods are re-exported without duty payment, no interest should be charged on a non-existing duty.
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