By TIOL News Service

MUMBAI, AUG 26, 2014: THE appellant had imported S.S. Tubes vide 'Into Bond Bill of Entry' for warehousing. As the appellants were not having licence for import of the goods duty-free, they kept the goods in the bonded warehouse. After getting the Special Imprest Licence to import, they filed Bills of Entry and the goods were cleared. The appellant did not pay duty but the department asked the appellant to pay interest for the warehousing period as they were not having license during the period. The appellant paid interest Under Protest.

Later, they filed a refund claim of the interest paid by them for warehousing period.

The lower authorities rejected the claim on the ground that the appellant had not passed the bar of unjust enrichment.

The appellant is before the CESTAT and relies upon the decision in Amtrex Hitachi App. Ltd. - 2008-TIOL-376-CESTAT-MUM.

The Bench observed -

++ It is not disputed that the appellant has paid the interest for the period of the goods warehoused as per Section 61(2) of the Customs Act, 1962. Therefore, as per Circular No. 475/39/90-Cus VII dated 08.08.1990, provisions of Section 27 is not applicable to the facts of the case and consequently bar of unjust enrichment is not applicable.

++ The same view was taken by this Tribunal in the case of Amtrex Hitachi App. Ltd. .

Following the cited decision, the CESTAT held that the appellant is not required to pass the bar of unjust enrichment and is entitled for refund claim of interest.

The appeal was allowed with consequential relief and the adjudicating authority was directed to implement this order within 30 days.

In passing:

+Extract from Circular dt. 8.8.90 -

It has been advised that Warehousing interest levied under Section 61(2) of the Customs Act is distinguishable from Customs duty defined under Section 2(xv) ibid. Accordingly provisions of Section 27 will not apply to refund of interest recovered under Section 61(2). However, the period under the Limitation Act may be applicable.

+The Customs (Amendment) Act, 1991 [w.e.f 23.12.1991] -

Amendment of section 27.

2. In section 27 of the Customs Act, 1962 (52 of 1962)(hereinafter referred to as the principal Act),--

(i) in sub-section (1), for the word "duty", wherever it occurs,the words "duty and interest, if any, paid on such duty" shall be substituted;

(ii) in sub-section (2), except in clauses (d) and (e) of the first proviso, for the word "duty", wherever it occurs, the word "duty and interest, if any, paid on such duty" shall be substituted.

(See 2014-TIOL-1597-CESTAT-MUM)