1. This is an appeal filed by M/s. Southern Iron Steel Company Ltd. (SISCOL, importer-assessee) against the Order in Appeal No. 01/2006 CUS (SLM) dated 28.4.2006 passed by the Commissioner of Central Excise (Appeals), Salem. The facts of the case are that SISCOL had imported and warehoused in their private customs bonded warehouse an Air Separation Plant (ASP) and design documents in 4121 packages valued at Rs. 22,94,76,040/- under warehousing Bill of Entry No. 33496 dated 25.06.1997. The value of the consignment declared as per contract No.96YC/45XY64A1 dated 10.04.1996 between SISCOL and M/s. China Iron & Steel Industry and Trade Group Corporation, Beijing was Rs. 22,94,76,040/- crores. The consignment was classified under CTH No.8419.06. The appellants had cleared the goods under the cover of four Bills of Entry leaving nine packages comprising parts of ASP and design documents. Duty due on the uncleared goods had been paid and on 29.8.2003 after the warehousing period including the extension allowed was over. One ex-bond Bill of Entry was filed to cover clearance of remaining parts of ASP and another Bill of Entry exclusively for clearing design documents. The Bill of Entry covering machinery parts was declared to be of value Rs. 31,93,893/- and duty Rs. 16,22,498/- and the interest on duty on the equipment was only Rs. 21,84,491/-. In the Bill of Entry covering documents, they were declared to be of value of Rs. 5,73,69,010/-. The duty payable was shown as "Nil". The details relevant for assessment were not furnished. However, the assessee had filed a letter dated 17.01.04 claiming that the value of the documents covered by the Bill of Entry was Rs. 5,73,69,053/- and that the goods were classifiable under heading No. 49.06 of the Customs Tariff and exempt under Notification No. 21/02 Cus dt. 01.03.02. It was also stated in the said letter that they had paid excess duty and interest and therefore, they were eligible for the refund of the same.
2. The assessee had obtained a second set of invoices from their supplier bearing the same number and date as the original invoice for the entire consignment, giving the break up of the value of machinery and documents supplied, whereas the original invoice had contained a single price for the plant and documents which had been submitted at the time of warehousing of the goods imported.
3. On 30.3.2005 a Show Cause Notice was issued to M/s. Southern Iron Steel Company Ltd. (SISCOL): (1) demanding duty of Rs. 3,07,65,945/- involved on the uncleared goods that lay in the warehouse beyond the expiration of the warehousing period under Section 72 of the Customs Act, (ii) proposing to appropriate the same amount paid by SISCOL vide TR6 Ch. No. 1/2003-04 dated 29.08.2003, (iii) demanding Rs. 4,14,22,762/- being interest under Section 72 of the Customs Act and 4. While resisting the proposals, the assessee admitted that they had subsequently obtained the break up of the price of documents and equipments. They challenged the classification of design documents (manual and drawings) under CTH No. 8419.06 in the warehousing Bill of Entry and claimed that the designs and drawings were classifiable under CTH No. 49.06 and chargeable to 'nil' rate of duty. The transaction was at arms length. They claimed support from the Madras High Court judgment in the case of CC Madras v. Thungabhadra Fibres reported in 1995 58 ECR 429 (Mad.) and highlighted the court's observation that; 6 ...it cannot be accepted that such a valuation made for the purpose of execution of a warehousing bond is conclusive. That at best can be regarded only as a tentative estimate of the liability to pay duty, which is secured under the terms of the warehousing bond.
The value declared in the into bond Bill of Entry was not sacrosanct.
They claimed that it was the onus of the revenue to establish under valuation, if any, alleged. They claimed that they were eligible for refund of excess duty paid owing to the incorrect valuation and classification of designs and drawings made.
5. In the adjudication order, the Assistant Commissioner observed that after obtaining the extension of warehousing period up to 31.03.02, the Chief Commissioner had declined further extension and there remained in the warehouse 11 packages (actually 9) of value Rs. 6,05,62,883/-. She observed that the work on the project was completed and the plant commissioned in the year 2000. Since the plant had been installed and functioned since 2000, the goods remaining uncleared in the warehouse were of no consequence and the assessee had attributed a major part of the value of these items at Rs. 6.05 crores and claimed that out of this, Rs. 5.75 crores was on account of designs and drawings for which they claimed exemption. In para 25 of the order, the Assistant Commissioner found as follows: If the goods lying in CBW are really worth of the order of Rs. 6.05 crores as claimed by M/s. SISCOL, then definitely they should have been used in the project execution because the value of the goods uncleared as attributed constitutes nearly 1/4 th or 25% of the total project cost. Such valued goods could not have been insignificant in the project and would have played a critical role in the project execution necessitating their removal. If the goods were not cleared even after eight years and after more than five years of commissioning of Air Separation Plant, it only lays bare the truth that the goods lying in warehouse are only unwanted and unworthy goods. All the goods required for the Plant were cleared earlier itself at less than their actual value resulting in passing in of a higher value for balance goods in warehouse. By undervaluing the goods cleared earlier, M/s. SISCOL were able to clear all the essential goods required for the Air Separation Plant on payment of a lesser customs duty and postponing the payment of duty for a major part of value to a later date. This was how the balance goods lying in warehouse have acquired a larger value then their real worth. As the value of the goods remaining in the warehouse are not worth the value attributed and also as they are of not much use in the commissioning and running of the Air Separation Plant, M/s. SISCOL is unenthusiased to clear the goods on payment of appropriate customs duty and interest on such goods as the amounts involved are too high and in particular the accumulated interest was more than the duty. This has been the reason for their reluctance and disinterest to clear the goods.
The Assistant Commissioner went on to find that in order to avoid paying interest due on the full value of the goods lying uncleared, the assessee had filed one Bill of Entry for a value of Rs. 5.75 Crores claiming to represent the value of designs and drawings, and claiming its classification under Chapter 49 as printed materials exempt from customs duty in terms of Notification No. 21/2002-Cus. dated 1.3.2002.
She also observed that the claim was being filed after seven long years of receipt of goods, five years after commissioning of Air Separation Plant and two years after expiration of the warehousing period. As the exemption was available to printed materials all along, there was no reason for the assessee to wait so long, seeking extension of warehousing period also for these designs and drawings. According to her, the appellants had not attempted to clear their design documents earlier owing to its dutiability. The Bill of Entry had been filed claiming exemption to delay paying interest. Relying on the following observations of the Apex Court in Kesoram Rayon v. Collector , the Assistant Commissioner attempted to establish that the Bill of Entry for clearing the design documents had not been filed validly.
Section 72 deals with goods improperly removed from a warehouse.
Goods are improperly removed from a warehouse under the terms of Sub-section (1) if they are removed without clearance under Section 71 (Clause (a)); if they are taken as samples but without payment of duty (Clause (c)); if a warehousing bond has been executed in respect of the goods under Section 59 but they are not satisfactorily accounted for (Clause (d)); and if they have not been removed from the warehouse on the expiration of the permitted period or its permitted extension (Clause (b)). In all such cases the Customs Officer is empowered to demand, and the importer shall pay, the full amount of duty chargeable on the goods and internet, penalties, rent and other charges thereon. If payment as demanded is not made, it is recoverable by sale of other goods of the importer in the warehouse.
Goods which are not removed from a warehouse within the permissible period are treated as goods improperly removed from the warehouse.
Such improper removal takes place when the goods remain in the warehouse beyond the permitted period or its permitted extension.
The importer of the goods may be called upon to pay Customs duty on them and, necessarily, it would be payable at the rate applicable on the date of their deemed removal from the warehouse, that is, the date on which the permitted period or its permitted extension came to an end.
Section 15(1)(b) applies to the case of goods cleared under Section 68 from a warehouse upon presentation of a bill of entry for home consumption; payment of duty, interest, penalty, rent and other charges; and an order for home clearance. The provisions of Section 68 and, consequently, of Section 15(1)(b) apply only when goods have been cleared from the warehouse within the permitted period or its permitted extension and not when, by reason of their remaining in the warehouse beyond the permitted period or its permitted extension, the goods have been deemed to have been improperly removed from the warehouse under Section 72.
She noted that the design documents were part and parcel of the plant and machinery imported. As per SISCOL's contract with the Chinese supplier, SISCOL had undertaken to pay Rs. 22,94,76,040/- crores for supply and commissioning of Air Separation Plant. As per the warehousing Bill of Entry, the value of the goods warehoused was Rs. 22.94,76,040/- crores. Therefore, the warehoused goods had to be cleared on payment of duty on a value of Rs. 22,94,76,040/- crores.
6. The Assistant Commissioner concluded that the assessment of warehoused goods changed when the goods were cleared only as regards rate of duty, in terms of Section 61 of the Customs Act. The Assistant Commissioner ordered that SISCOL was liable to pay interest on the uncleared goods, from the date the warehousing period expired till the date when the duty had been paid i.e. 29.08.2003. Accordingly, she confirmed demand of Rs. 4,14,22,762/- being interest on duty in terms of Section 61 of the Act. As the assessee had failed to comply with the warehousing provisions and contravened provisions of Section 61, she imposed a penalty of Rs. 10,000/- on SISCOL under Section 117 of the Customs Act. A duty demand of Rs. 3,07,65,945/- on the 11 packages, was confirmed and appropriated under Section 72 of the Customs Act.
7. In the impugned order, the Commissioner (Appeals) rejected the arguments advanced by them in the appeal as in their reply to the Show Cause Notice. He also held that the design documents were not eligible for re-classification under Chapter Heading 49 and upheld the order of the original authority. He found that the appellants had not denied their liability to pay interest demanded under Section 72 of the Act in the original order. He found that the Assistant Commissioner had rightly relied in Kesoram Rayon v. Collector (supra) and had passed the order in original in accordance with law. He concurred with the findings of the original authority and found that the demand was sustainable. He referred para 13 of the order in original wherein the original authority had extracted the reply to the Show Cause Notice by appellants wherein it is, inter alia, stated by them as under: The total contract price for the Equipment and Documentation to be supplied by M/s. China Iron & Steel Industry and Trade Group Corporation, a Government of China Organisation (CSGC) was US$ 6320000. As per the agreement entered into by M/s. SISCOL with the supplier, the aforesaid price shall be the price of the equipment and documentation supplied by the supplier within its scope and supply as mentioned in appendix 2 (equipment) and appendix 5 (documentation). The contract value is thus inclusive of the equipment, documents and drawings.
The drawings imported consist of preliminary design, mid design and final design. The preliminary drawings relate to lay out drawings, civil foundation, interconnecting cabling/piping etc. The mid design relates to drawings required for executing the installation as per the requirement. The final design consisted of operation manual, maintenance manual, etc.
Citing the following ratio of the VBC industries Ltd v. CC, Chennai , the lower appellate authority held that classification of goods made at the time of warehousing the goods could not be altered at the time of ex-bond clearance.
had held, while examining provisions of the Customs Act and the forms prescribed in the Bill of Entry (Forms) Regulations, 1976: The contrast that finds emphasis in the sections as well as the forms above referred to is of clearance for home consumption as opposed to clearance for warehousing. The presentation of a bill of entry for home consumption only means that the importer does not intend to warehouse the goods; in the latter case, he is not required to pay the import duties, if any, immediately....
Therefore, the presentation of the into-Bond Warehousing Bill of Entry, in this case, will only be construed to be a desire, of an importer, not to pay import duties immediately. The assessments required to be made, as per law and the instructions in the Appraising Manual postulate the determination of the valuation and tariff classification and thereafter execution of a Bond, undertaking to pay the duty as assessed on into warehouse Bill of Entry, warehouse charges etc., before the goods are deposited in the Customs Bonded Warehouse. On the desire of the importer, to remove the goods for home consumption under Section 68, or expiry of the warehousing period permissible in law, the question of recovery of duty arises. This recovery is subject to the provision of Section 15(1)(b) which reads as: 15 (1) the rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force - (b) in the case of goods cleared from a warehouse under Section 68, on the date on which the goods are actually removed from the warehouse.
This provision permits revaluation only of tariff related goods and determines the rate of duty as applicable on the date of physical removal or deemed removal in case of expiry of warehouse period. In all cases the original classification of the goods as determined and classified, when placed in the Bond on assessment of the into-bond Bill of Entry is required to remain undisturbed except mis-declaration. The provision cannot be expanded to encompass re-determination of classification, when there is no change in the nature of the goods or the tariff by amendments thereof. This aspect has been accepted by the Central Board as the Appraising Manual Para 7, page 94, Vol. III, Chapter 6 on Warehousing which incorporates this interpretation in the following terms: ...Change in Classification - after Warehousing - in respect of warehoused article, which was at the time of assessment classifiable at a later date, owing to change in the wordings of Customs Tariff Act, 1975, under a different heading which carried a different rate of duty re-assessment of duty under such different headings of the tariff would be in order.
Nothing contrary to this has been shown to us. There is no case or cause to even suspect mis-declaration of the goods, there is no change required to be affected by amendments made in the Tariff.
Therefore, classification of the impugned goods arrived at under Heading 98.01, by the proper officer, on assessment of the into-bond Bill of Entry filed under Section 46, cannot be altered at the time of ex-bond clearance on a Bill of Entry filed under Section 68, which may not even qualify to be a Bill of Entry under Section 2(4) of the Customs Act, 1962. The classification, once finally assessed under 98.01, under Project import in this case cannot be altered to Chapter 84, since the classification of any goods imported, as made can be altered subsequently only by following the appellate procedure prescribed in the Customs Act, 1962.
He found that the original authority had demanded interest on warehoused goods after expiry of the warehousing period relying on the decisions of the Tribunal in the case of Jindal Steel and Power India v. CCE and Sunrise Zinc Ltd. 8. In the appeal filed before the Tribunal, the appellants have prayed for orders to the effect that they were not liable to pay the interest amount of Rs. 4,14,22,762/- affirmed in the impugned order under Section 72 of the Act and that no penalty was imposable on them under Section 117 of the Act. They also sought a direction to the effect that they were eligible for refund of Rs. 2,69,58,955.56. It was stated in the appeal that some preliminary documents had been received by air through Customs declaring their notional value. The remaining documents and the Air Separation Equipment to manufacture Oxygen and Nitrogen (liquid and gaseous) and Argon (gas) had been imported subsequently and warehoused under a yellow Bill of Entry dated 25.6.97. The declared value was Rs. 22,94,76,040/- They had cleared several packages under ex-bond Bills of Entry last de-bonding being on 3.3.99. The balance goods lay uncleared in the warehouse. They had paid duty of Rs. 3,07,65,945/- on the above goods on 29.8.03. They did not pay interest due thereon of Rs. 4,14,22,762/- They had filed Bill of Entry Sl. No.1/2003-04, for clearing Air Separation Equipment and design documents (8 packages) declaring the value as Rs. 31,93,893/-and duty as Rs. 16,22,498/- and interest Rs. 21,84,491/- In another Bill of Entry Sl.
No. 2/2003-04 the appellants described the goods to be cleared as "partial clearance of 1 x 150 T/D Air Separation Equipment and design documents" (1 package) declaring the value as Rs. 5,73,69,010/- attracting 'nil' rate of duty. They had filed a letter dated 17.1.04 stating that Bill of Entry No. 2/2003-04 had been filed exclusively for documents and the value of the documents was Rs. 5,73,69,053/-. They claimed the documents to be classifiable under Chapter Heading 49.06 of the Customs Tariff and eligible for exemption under Notification No.21/02 Cus dated 1.3.02.
9. In the grounds of appeal it is claimed that in view of the decisions of the Larger Bench of this Tribunal in the following cases the interest demanded and penalty imposed were not sustainable.Al-Falah Exports v. CCE Surat-I (b) CCE, Delhi III v. Machino Montell (I) Ltd. 2004 (62) RLT 709 (CESTAT-LB) Section 72 and Section 28 of the Customs Act were pari material and in the above mentioned decisions the Larger Bench of this Tribunal had held that no interest could be demanded and penalty imposed on the appellants since they had paid duty involved before the issuance of Show Cause Notice. The transaction between the appellants and the Chinese supplier had been at arms length. As the contract price had included the price of the equipment and documents/drawings they had obtained the break-up of the prices as follows: The price break-up was given in a separate invoice furnished to the Department. The suppliers were a Government of China organization.
Therefore, the aspersions cast on the appellants by the original authority were incorrect in view of the facts of the case. The impugned order contained surmises that the appellants had cleared almost all the balance essential machineries in the previous four clearances leaving some goods in the warehouse which were of no consequence. Such statements were no evidence. In the order-in-original the Assistant Commissioner had similarly observed that the appellants had cleared essential goods on payment of a lesser customs duty and postponed the payment of duty for major part of value to a later date whereby uncleared goods had acquired a larger value than their real worth. It was contended that the observation was presumptive and reflected non-application of mind by the adjudicating authority. Moreover, the ex-bond Bills of Entry filed had been scrutinized and assessed by the jurisdictional officers before clearance of the goods. The observations in the impugned order that the appellants were making claim for exemption on design documents after seven years of receipt of the goods and five years of commissioning of the plant gave the impression that the appellants had to claim the exemption on the design documents within a particular period. It was settled law that the claim for exemption could be made at any stage of proceedings and they cited the following judgments.General Optics (Asia) Ltd. v. CCE, Pondichery 2004 (175) ELT 381(Tri. Chenn) It was further claimed that in view of the Madras High Court's judgment in the case of Commissioner of Customs, Chennai v. Thungabhadra Fibres Ltd. the observation that the value of the warehoused goods could not be altered at the time of ex-bonding was incorrect.
Therefore, the value declared at the time of warehousing was not sacrosanct and could be amended. As regards classification of drawings and designs, the appellants cited the Apex Court's judgment in the case of Commissioner of Customs (G), New Delhi v. Gujarat Perstorp Electronics Ltd. in para 54 of which it had been held that "as noted earlier, HSN has dealt with the point and as per the Explanatory Note, it would fall under Chapter Heading 4911.99". It was argued that inasmuch as the principal was not payable, the interest was not also payable. The principal was not payable as the drawings and designs imported were duty free.
10. During hearing Ld. Sr. Counsel for the appellants invited our attention to the observation of the original authority that the goods required for plant had been cleared earlier itself at lesser than their actual value resulting in passing in a higher value for balance goods in the warehouse. He submitted that this finding was inconsistent with the decision. The order demanded duty and interest on duty on uncleared goods lying in the warehouse whereas the finding cited by him implied that the goods already cleared had been undervalued and the uncleared goods were of much less value. According to him, as per the finding of the original authority, the demand for such short levied duty should have been made under Section 28 of the Customs Act. In the absence of any such proposals in the Show Cause Notice, the said order was not sustainable. In the impugned order, the lower appellate authority had concurred with the findings of the original authority. Therefore, the impugned order also was not sustainable. The original authority or the appellate authority had not determined the value of the uncleared goods. As the value of the documents lying uncleared in the warehouse was of value Rs. 5,73,69,010/- and classifiable under Heading 49.06 subject to nil rate of duty, the interest payable was only on the value of the parts of equipment comprised in eight packages. Duty on these had already been paid. The value of the machinery was Rs. 31,93,893/-.
And duty of Rs. 16,22,498/- had been paid. The interest on duty on the equipment was only Rs. 21,84,491/-. As they had paid an amount of Rs. 3,07,65,945/- as duty on the eight packages on 29.08.03, they were eligible for refund of the balance amount.
11. Ld. Counsel for the Department submitted that both the orders of the lower authorities were in accordance with law and were based on sound reasoning. The observations of the original authority apparently inconsistent with her decision had to be seen as aspersion cast on the appellants and had to be ignored. The order was entirely consistent with the proposals made in the Show Cause Notice and could not be faulted. The impugned order also did not suffer from any such infirmity. There was no dispute that the total value of the warehoused goods was Rs. 22,94,76,040/- and that the four consignments cleared ex-bond had all been described as 'part clearance of 1 x 150 T/D Air Separation Equipment and design documents'. The difference between the declared value of the warehoused goods and the aggregate of the goods cleared ex-bond had been worked out as the value of the uncleared goods. All the prices of the goods cleared had been declared by the appellants themselves. Therefore, the value of the uncleared goods was correctly worked out by the original authority and also the interest due of Rs. 4,14,22,762/-. This amount was rightly demanded. The impugned order affirming the above demand could not be assailed on the ground of the Commissioner concurring with the findings of the original authority. The learned Sr. Counsel for SISCOL submitted that the matter may be remanded for de novo adjudication.
12. We have carefully studied the case records and considered the submissions made by both sides. The main issue in dispute is the demand of interest on the duty payable on the warehoused goods that remained uncleared beyond the normal warehousing period and the extension of time allowed by the competent authority upto 31.3.02. We find that as per the contract between the supplier and the appellants, the total contract price for the equipment and documentation supplied was US $ 6320000 (Rs. 22,94,76,040/-). The goods had been declared as Air Separation Plant and design documents of the above value. Under the cover of four ex-bond Bills of Entry all of which had described the goods under clearance as "part clearance of 1 x 150 T/D Air Separation Equipment and design documents", most of the warehoused equipment were cleared. Therefore, as per the assessee's own declaration the value of the uncleared goods was worked out by the lower authorities and the interest due was calculated at Rs. 4,14,22,762/-. The challenge to the impugned order is mainly on the basis that there is no proper determination of the value of the uncleared goods which lay in the warehouse beyond the warehousing period. In this regard, lower authority had extracted the relevant portion of the contract showing the consideration for the plant and documents which is Rs. 22,94,76,040/-. The entire imported goods including the documents had been warehoused declaring them as air separation equipment and design documents. These had been classified under heading 8419. 60 by the appellants and duty assessed accordingly. From the warehoused goods four parcels of equipment had been cleared under ex-bond bills of entry declaring the relevant value and the uniform description 'part clearance of air separation equipment and design documents 1 x 150 T/D'. From the value declared in the warehousing Bill of Entry, and the value declared in the ex-bond Bills of Entry, the value of the goods remaining in the warehouse was determined. This amount as well as duty and interest were worked out as proposed in the show cause notice on the basis of the appellants' declarations. We do not find that any other exercise or judicial determination is involved in ascertaining the value of the uncleared goods and the duty due on the goods and the interest thereof. It is settled law that the classification and the valuation of warehoused goods should not be altered when the goods are cleared ex-bond. If the wording of the relevant tariff entry is changed, or if tariff value is applicable to the goods and the same is changed at the time of clearance, a reassessment is called for. If there is a change in rate of duty, then also, reassessment has to be made. Otherwise, classification is revised only if it comes to light that at the time of warehousing the description had been misdeclared willfully by the importer. The lower authorities have established the above position with reference to the relevant Sections and supporting judicial authorities.
13. As regards the challenge to the demand of interest on duty on the uncleared goods which are to be treated as goods improperly removed at the expiration of warehousing period, the lower authorities have worked out the interest as prescribed in the Customs Act. We do not find any merit in the plea that the finding of the original authority that the value attributed to the uncleared documents had actually been part of the value of the machinery already cleared and therefore, the demand of interest was not in accordance with the finding. We find that the original authority had made some remarks to the effect that the design documents were not used in setting up the plant or in running the plant. Observations were occasioned by the mis-match between the purpose of these documents as per contract and the use they were put to. The appellants have sought to re-classify part of the warehoused goods, namely the design documents under a different heading viz 49.06 at the time of clearing them from the warehouse. This is not permissible unless there was a misdeclaration of classification initially or change in the wording of the relevant entry. In this connection we rely on the decision of the Tribunal in the case of VBC Industries Ltd. v. CC, Chennai , wherein it was held that classification of goods on assessment of the into-bond Bill of Entry could not be altered at the time of their ex-bond clearance.
Therefore, the plea for assessing design documents of declared value of Rs. 5,73,69,053/- under tariff heading 49.06 of the Customs Tariff at nil rate of duty as per Notification No. 21/02 Cus is not tenable. We find that the appellants have paid the duty amount correctly on the warehoused goods at the time of their clearance and also on the remaining goods lying in the warehouse.
14. As regards the plea to waive penalty and interest following the ratio of the decision of the Tribunal cited, we find that those decisions had dealt with imposability of penalty under Section 11AC and demand of interest under Section 11AB of the Central Excise Act, and penalty under Section 114A of the Customs Act, where duty evaded was paid by the assessee before issue of the Show Cause Notice for demand.
In the instant case penalty is imposed under Section 117 of the Customs Act for the importer's failure to discharge the mandatory liability of interest as per Section 61 of the Act. Where the Act does not provide for imposition of penalty specifically for any such failure, Section 117 can be invoked. Therefore the penalty has been validly imposed.
Moreover, the ratio of immunity in such circumstances had been reversed by the Hon'ble High Court of Punjab and Haryana in the judgment in the case of CCE. Delhi-III v. Electrolus Kelvinator Ltd. 2006-TIOL-284-HC-P&H-CX.15. We find from the judgment of the Hon'ble Madras High Court in the case of Thungabhadra Fibres Ltd. (supra) that assessment of warehoused goods change at the time of their clearance from the warehouse if rate of duty or tariff valuation, if applicable to the goods changed. This is the position as per Section 15(1)(b) of the Act. In the case of Kesoram Rayon v. Collector , the Supreme Court ordered that interest is payable as compensation for the delay in payment of duty and the Court had the affirmed the liability in such circumstances. The immunity from penalty and interest in cases of payment of duty before issue of Show Cause Notice was decided by the larger bench of the Tribunal in the case of Al-Falah (Exports v. CCE Surat-I 2006 (74) RLT 342 (CESTAT-LB). The Punjab & Haryana High Court in its judgment in the case of CCE, Delhi III v. Machino Montell (I) Ltd. 2004 (62) RLT 709 (CESTAT-LB) has decided that such immunity is not available for persons deliberately evading tax. Therefore, ratio of the case law cited in this regard is no longer good law. Non-removal of warehoused goods at the expiration of the warehousing period is dealt with as goods removed improperly. Such goods will be assessed to duty as if they were cleared on the date following the expiration of the warehousing period. This was the law laid down in the case of Kesoram Rayons (supra). In the instant case, the warehousing period had expired on 31.03.2002. Therefore, filing of Bill of Entry for such goods on which duty was paid on 29.08.03, is not of any legal consequence. The goods had already been assessed and duty collected as if they had been cleared on 01.04.2002.
16. In brief, the only issue involved in the appeal is the exact amount of interest due from SISCOL on account of delay in clearance of nine packages, eight covering "ASP Equipment" and one covering the "design documents", beyond the period specified in Section 61(2) of the Act. As per the said sub-section, interest is payable on the amount of duty payable at the time of clearance of warehoused goods, for the delay in payment of the duty due in excess of the period prescribed in the above sub-section. In terms of Section 72(1) "(b) where any warehoused goods have not been removed from a warehouse at the expiration of the period during which such goods are permitted under Section 61 to remain in a warehouse ;", "the proper officer may demand and the owner of such goods shall forthwith pay, the full amount of duty chargeable on account of such goods together with all penalties, rent , interest, penalty and other charges payable in respect of such goods". The Section 72 is self-contained as regards the liability of the importer in respect of the warehoused goods and the same is not dependent on any other provisions of the Act such as those of Section 28. In the instant case, SISCOL had paid duty on the uncleared goods on 29.8.2003.
17. The payment of interest is disputed on the ground that the value of the warehoused goods could be revised on their clearance for home consumption under a Bill of Entry filed under Section 15. If the design documents were assessed on the Bill of Entry, Sl. No. 2/2003-04, the value of the goods was Rs. 5,73,69,053/- and the rate of duty being 'Nil' on the design documents classifiable under CTH 4906, the duty liability would be 'Nil'. Therefore, the interest liability was limited to that attributable to machinery worked out at Rs. 21,84,491/- as against the demand of Rs. 4,14,22,762/-. The duty paid earlier on design documents less the interest of Rs. 21,84,491/- had to be refunded.
decided that "provisions of Section 68 and consequently, Section 15(1)(b) apply only when goods have been cleared from the warehouse within the permitted period or its permitted extension and not when, by reason of their remaining in the warehouse beyond the permitted period or its permitted extension, the goods have been deemed to have been improperly removed from the warehouse under Section 72". Therefore, the ex-bond Bills of Entry Sl. No. 1 & 2/2003-04 are not validly filed and entries therein have to be ignored.
19. However, as regards the appellant's reliance on the ratio of the decision of the Hon'ble Madras High Court in the case of CCE v.Tungabhadra Fibres Ltd., we observe that their lordships had spoken on valuation as the estimate of the duty calculated/assessed on the warehousing Bill of Entry which was only tentative as the same would change with the rate of duty chargeable on the goods at the time of clearance of the goods. In that case, the writ appeal of the importer was not allowed and the importer was asked to pay the enhanced auxiliary duty. The appellants have confused the 'valuation' referred to by the Hon'ble High Court with valuation of the goods warehoused. In view of our above findings, we do not find any infirmity in the demand of interest made by the lower authorities. We find that the appellants had paid appropriate amount of duty on the goods lay uncleared on 29.8.2003 and there was no excess payment of duty to be refunded.
20. The assessee's declaration of a huge value of Rs. 5.73 crores (25% of the total cost of import) for the design documents intended to guide SISCOL in setting up the plant and its maintenance lay uncleared in the warehouse even after the plant was above two years into operation.
Viewed in this background, the original authority's observation that these goods of declared value about Rs. six crores was not worth that value is apparently a finding of the obvious. We cannot fault the Assistant Commissioner if she had found sense in these figures only by the logic recorded in the order which the appellants have described as aspersion cast on them. We do not think that these observations jeopardized her order based on sound legal grounds or the impugned order which affirmed it. In the impugned order, the lower appellate authority upheld the Assistant Commissioner's order and he did not refer to this particular finding of the Assistant Commissioner and endorse it. However, we find that the amount of interest as demanded has not been challenged on any legally valid ground nor have the appellants raised any such challenge to the penalty.
21. In view of our analysis and finding, we uphold the impugned order and dismiss the appeal. Ordered accordingly.