1996 (7) TMI 252 - AT - Customs

Tribunal Upheld Interest Calculation Decision from 8th Day Post Return of Bills of Entry

PESTICIDE INDUSTRIES Versus COLLECTOR OF CUSTOMS, JAIPUR

PESTICIDE INDUSTRIES Versus COLLECTOR OF CUSTOMS, JAIPUR - 1996 (87) E.L.T. 678 (Tribunal) Issues:Calculation of interest period under Section 61(3) of the Customs Act, 1962.Analysis:The judgment dealt with three appeals concerning the calculation of interest under Section 61(3) of the Customs Act, 1962. The dispute arose when importers warehoused goods and were later asked to pay interest from the expiry of 7 days from the date of returning Bills of Entry until physical clearance from the warehouse. The importers claimed a refund, arguing that interest should only apply after the permissible 30-day warehousing period. The Assistant Collector issued demand notices, which were confirmed by the Collector (Appeals). The appellants then appealed to the CEGAT.The legal adviser for the appellants contended that interest should only accrue after the permissible warehousing period, as per Section 61(1)(b). He argued that interest is compensation for the use of borrowed money and should not be charged before the duty payment date. The Assistant Collector's refusal to follow the Collector's initial direction for a refund was challenged. The legal adviser cited case law and emphasized that changing findings on the same facts was improper.On the other hand, the SDR argued that interest calculation from the 8th day after returning Bills of Entry was correct, citing Section 61(3). He addressed the apparent contradiction in the Collector's orders, stating that the second order considered the previous findings before reaching a decision.The judgment analyzed Section 61 of the Customs Act, highlighting the distinction in warehousing periods and interest calculation for different categories of goods. Goods falling under Section 61(1)(b) have a 30-day warehousing period and accrue interest from the date of returning Bills of Entry. The judgment emphasized that officers must adhere to the law's provisions rather than abstract concepts. The refusal to entertain refund claims and confirm demands by the Assistant Collector aligned with Section 61(3) and was upheld by the Tribunal.Regarding the alleged contradiction in the Collector's orders, the Tribunal declined to delve into the merits of the previous order not challenged in the appeal. The judgment focused on upholding the Assistant Collector's decision based on Section 61(3) requirements. Consequently, the appeals were deemed meritless, and the Tribunal rejected them.