TaxTMI 
TaxTMI 
Interest payable on clearance of warehoused goods when duty paid through DEPB debit
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.... say that a reference was received in the Board seeking clarification whether interest on warehoused goods is chargeable, if the Customs duty is paid by way of debit in DEPB. 2. The issue was examined and necessary clarification in the matter has been issued vide F.No. 605/85/2006-DBK, dated 21-7-2006 to the Commissioner concerned. Having regard to the general implications of the matter, a copy of the same is enclosed for information and necessary action. 3. In brief, the issue involved is, whether the duty paid through debits under DEPB is to be treated as payment of duty or exemption from duty. Hitherto, the stand taken by the Department was that goods cleared through debit under DEPB are exempted goods and, accordingly, no CENVAT....
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....e, the situation is slightly different. As explained above, the notification issued under DEPB Scheme provides for exemption subject to debit of duties in DEPB scrips. It is thus not a case where the goods are unconditionally exempt from duty. 6. In the light of the position explained above, it is clarified that interest is chargeable on duty paid by way of debit in DEPB on goods cleared from the warehouse. 7. The contents of this Circular may be brought to the notice of the field formations under your jurisdiction. F.No. 605/85/2006-DBK Ministry of Finance Department of Revenue Central Board of Excise & Customs New Delhi, the 21st July, 2006. Shri Najib Shah Commissioner of Customs (Imports) Mumbai-II Nhava Sheva. Sir, Subje....
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....s the duty is debited from the DEPB scrips. It may be appreciated that unlike other exemption notifications whereunder no duty is payable, the exemption notification issued under DEPB Scheme provides for exemption subject to debiting of duty from DEPB. Therefore, it was clarified vide Circular No. 5/2005-Cus., dated 31-1-2005 that education cess has to be debited from DEPB Scrips in case of imports under DEPB Scheme. As for the CESTAT decision in the case of Reliance Industries Ltd., it is informed that the Board has directed the concerned Commissioner to file an appeal before the Hon'ble High Court against the said decision. 4. The issues regarding interest on warehoused goods have already been clarified by the Board vide Circular No. 10/....