TaxTMI 
TaxTMI 
1996 (3) TMI 134
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....house within fifteen days of the said notice after paying duty due thereon. The respondent, however, did not clear the goods until September 9, 1988 on which day he paid a duty of Rs. 1.40 crores and interest of Rs. 81.49 lakhs as demanded by the authorities. Having cleared the goods, the respondent filed a writ petition in the Karnataka High Court contending that levy of interest from November 11, 1983 upto the date of clearance of the goods from the warehouse and that too treating the rate of duty as ninety percent is contrary to law and unsustainable. It asked for refund of excess amount of interest collected from it. Its case was that the initial warehousing period was for three years and, therefore, the interest, if it all, should be c....
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....ed an importer either to clear the goods immediately on their import or to warehouse them without paying the duty. The warehousing of the goods without paying the duty was, however, subject to certain conditions specified in Section 59. Sub-section (1) of Section 59, which alone is relevant for our purposes, read thus at the relevant time: "59.Warehousing bond. The importer of any- (1) dutiable goods which have been entered for warehousing and assessed to duty under Section 17 or Section 18 shall execute a bond binding himself in a sum equal to twice the amount of the duty assessed on such goods; (a) to observe all the provisions of this Act and the Rules and Regulations in respect of such goods; (b) to pay on or before a date spec....
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....by Act 11 of 1983] read as follows: Where any warehoused goods remain in a warehouse beyond the"(2) period of one year or three months specified in clause (a) or clause (b) of sub-section (1) by reason of the aforesaid period or otherwise, interest at such rate, not exceeding eighteen percent per annum as is for the time being fixed by the Board, shall be payable on the amount of duty on the warehoused goods for the period from the expiry of the period of one year or as the case may be, three months, till the date of the clearance of the goods from the warehouse : Provided that the Board may, if it considers it necessary so to do in the public interest, by special order and under circumstances of an exceptional nature to be specified ....
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....e parties in these appeals. The Division Bench of the High Court has held that the interest is chargeable only for the period March 22, 1985 [on expiry of fifteen days from the date of notice dated March 7, 1985] to September 9, 1988. The Division Bench has further directed that interest shall be calculated taking the rate of duty in force from time to time during the said period. The State has preferred these appeals contending that (1) it is entitled to interest from November 11, 1982 and (2) the interest should be charged calculating the duty @ ninety per cent for the entire period November 11, 1982 to September 9, 1988. 5.We do not think that the claim of the appellant is sustainable in law. The language of Section 59(1)(b), as it st....