Commissioner of Central Excise Vs. Special Prints Ltd.

Commissioner of Central Excise vs Special Prints Ltd.

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Apr 30, 2002

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Citation: sooperkanoon.com/28123
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: J Balasundaram, S T S.S.
Decided On: Apr 30, 2002
Subject: Service Tax

Case Summary

AI-generated summary - not the official court judgment text.

Service Tax

Key legal issue: Service Tax

Parties & Advocates

Appellant / Petitioner

Commissioner of Central Excise

Respondent

Special Prints Ltd.

Legal References

Reported In: (2002)LC788Tri(Mum.)bai

Excerpt

.....assessee-respondents.we find that the warehoused goods were cleared within the period of one year that is within the warehoused period stipulated in section 61 of the customs act. on clearance, they ceased to be warehoused goods. it is only if goods remained in warehouse after expiry of the warehousing period, that the law provides for levy of interest. prior to 13-5-83, section 61 did not provide for recovery of interest. in the finance act, 1983, sub-section (2) which provided for recovery of interest on warehoused goods remaining in the warehouse beyond the prescribed period was incorporated and simultaneously, by issue of notification 143/83, dated 13-5-83, the rate of interest in section 59(1)(b) was increased from 6% to 12% per annum. thus, it is seen that section 59 and section 61 will come into play only in respect of warehoused goods.the department is seeking to rely upon provisions of section 59{l)(b) in isolation of the provisions of section 61, which is not permissible in law. it is section 61 that provides for levy of interest on warehoused goods remaining in the warehouse beyond the prescribed period, and the provision for recovery of interest was introduced only on 13-5-83. in other words, section 61 is applicable only to warehoused goods. in the present case, the goods ceased to be warehoused goods in august, 1982 itself when they were cleared from the warehouse.therefore, the question of levy of interest does not arise. we also find that in the case of cce, surat v. sasme co-op. soc. ltd. the issue has been decided in favour of the assessee respondent (order nos.1058-1064/97/wzb, dated 6-1-98).3. we, therefore, see no ground to interfere with the impugned order.hence, following the ratio of the earlier order supra, we uphold the same and reject the appeal.

Full Judgment

1. The respondents herein had imported polyster filament yarn (PFY) in 1982 for which Bill of Entry for warehousing was filed at Mumbai. The goods were then removed under bond for re-warehousing at Surat. At the relevant time, the goods were liable to duty at the rate of 200% Basic Customs Duty, 10% Auxiliary Duty and CVD at Rs. 87.50 per kg. Before ex-bonding the goods at Surat, a dispute arose as to the interpretation of Notification No. 38/78, dated 1-3-78 regarding the payment of auxiliary duty and additional duty. The respondents filed writ petition before the Hon'ble Delhi High Court on this issue and obtained interim stay on 28-5-82. In the meanwhile, the goods were allowed to be ex-bonded on execution of bond for full amount supported by bank guarantee for 50% of the differential duty. Ex-bonding of the goods from the warehouse took place during June, 1982 to August, 1982 by paying only the basic customs duty. On 23-8-82 the interim order dated 28-5-82 was vacated. The writ petition was finally dismissed by the Delhi High Court by its order dated 26-3-93. Thereafter, the differential amount of duty of Rs. 18,03,761/- was paid in July, 1993.

Show cause notice dated 21-10-93 was issued under Section 124 of the Customs Act, 1962 calling upon the respondents to pay interest amount of Rs. 27,18,344/- at the rate of 12% from 6-9-93,18% from 20-9-88 and 20% from 23-12-91 until the date of actual payment under Section 61{2) read with Section 59 of the Customs Act, 1962. The notice was confirmed by the Asstt. Commissioner whose order was set aside by the Commissioner (Appeals). Hence, this appeal.

2. We have heard Shri M.H. Shaikh, DR for the appellant-Commissioner and Shri J.F. Pochkhanwala, ld. Advocate for the assessee-respondents.

We find that the warehoused goods were cleared within the period of one year that is within the warehoused period stipulated in Section 61 of the Customs Act. On clearance, they ceased to be warehoused goods. It is only if goods remained in warehouse after expiry of the warehousing period, that the law provides for levy of interest. Prior to 13-5-83, Section 61 did not provide for recovery of interest. In the Finance Act, 1983, sub-section (2) which provided for recovery of interest on warehoused goods remaining in the warehouse beyond the prescribed period was incorporated and simultaneously, by issue of Notification 143/83, dated 13-5-83, the rate of interest in Section 59(1)(b) was increased from 6% to 12% per annum. Thus, it is seen that Section 59 and Section 61 will come into play only in respect of warehoused goods.

The department is seeking to rely upon provisions of Section 59{l)(b) in isolation of the provisions of Section 61, which is not permissible in law. It is Section 61 that provides for levy of interest on warehoused goods remaining in the warehouse beyond the prescribed period, and the provision for recovery of interest was introduced only on 13-5-83. In other words, Section 61 is applicable only to warehoused goods. In the present case, the goods ceased to be warehoused goods in August, 1982 itself when they were cleared from the warehouse.

Therefore, the question of levy of interest does not arise. We also find that in the case of CCE, Surat v. Sasme Co-op. Soc. Ltd. the issue has been decided in favour of the assessee respondent (Order Nos.

1058-1064/97/WZB, dated 6-1-98).

3. We, therefore, see no ground to interfere with the impugned order.

Hence, following the ratio of the earlier order supra, we uphold the same and reject the appeal.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Commissioner of Central Excise vs Special Prints Ltd. Same Subject Service Tax Same Judge J Balasundaram, S T S.S.