Warehousing – Waiver of interest on Customs duty on warehoused goods – consolidated instructions

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.....No.475/82/92-LC, dated 27.12.1993, Circular No.57/2000-CUSTOMS, dated 07.07.2000 (F.No.475/6/99-LC), Circular No.62/2004-Cus., dated 29.10.2004 (F.No.473/07/2004-LC), Circular No.38/2005-CUSTOMS, dated 28.09.2005 (F.No.473/07/2005-LC) in the matter relating to waiver of interest on Customs duty on warehoused goods. 2. A need was felt in the Board to combine all these instructions into one consolidated circular on the aforesaid matter to ensure uniformity to consider the request for waiver of interest on Customs duty on any warehoused goods u/s 61 of the Customs Act, 1962. Accordingly, in supersession of these previous guidelines and circulars on the aforesaid matter, the instructions have been consolidated in this Circular. 3. N....

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....g Industry, Power Generating Project, the imported goods have to be generally retained for a longer period of time. Charging of interest would escalate the costs unnecessarily. In essence the guidelines cover the following cases. This would however be subject to the individual merits of a case :- (i) Goods supplied as ship stores/aircraft stores (ii) Goods supplied to diplomats (iii) Goods used in the units operating under manufacture-in-bond scheme (iv) Goods imported by 100% EOUs (v) Goods warehoused and sold through duty free shops (vi) Machinery, equipment and raw materials imported for building and fitment to ships (vii) Petroleum products (viii) Plant and Machinery imported for projects ....

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....the ratio of Hon'ble Supreme Court's judgement in the case of M/s Pratibha Processors Vs. U.O.I  (1996 (88) E.L.T. 12 (SC), wherein the Apex Court has held that the interest on warehoused goods is merely an accessory of the principal and, if the principal is not recovered/payable, so is the interest on it. The interest under Section 61 (2) of the Customs Act, 1962 has, thus, no independent or separate existence. 7. In all cases, which have been discussed in the para 4 above, the demand for  interest are to be raised when due. The same are, however, not  to be enforced, and on fulfillment of  the purpose of import, the waiver of interest is to be decided within six months. In other words, the activity of the impor....