By TIOL News Service

MUMBAI, SEPT 08, 2016: THIS is an appeal filed in the year 2005.

The appellant warehoused the imported goods in a private bonded warehouse during the period January 2001 to May 2001. At the time of warehousing the goods, interest free period was provided for 180 days (6 months), section 61 of Customs Act, 1962 refers.

However, as per the Notification 23/2001-Cus(NT) dated 22/5/2001, effective from 1/6/2001, the interest was chargeable after expiry of bond period of 30 days.

The appellant cleared the warehoused the goods during the period June, 2001 to December, 2001 and interest was paid considering 180 days as interest free period. Revenue's contention is that since the goods remained bonded after issuance of Notification 23/2001-Cus(NT), the interest free period that is available to the appellant is only 30 days and interest is chargeable over and above the 30 days of bonding of the goods.

Before the CESTAT, the appellant submitted that since the goods were warehoused prior to the notification, therefore, the period of 180 days as interest free shall be applicable and the Notification 23/2001-Cus(NT) will not have retrospective effect. The decision in Caterpillar India Ltd - 2009-TIOL-275-CESTAT-MAD was cited in support.

The AR, while reiterating the findings of the lower authority,cited the Tribunal Delhi decision in Poddar Pigments Ltd. Order no. 778-781/2004-NB(C) dated 18 November 2004.

The Bench observed -

"6. We find that the goods were warehoused prior to issue of Notification 23/2001-Cus(NT) during that time the statue has mandated interest free bonding period of 180 days. Under that provision the appellant has executed the bond and warehoused the goods. Though the Notification No. 23/2001-Cus reduced period of 180 days to 30 days w.e.f. 1/6/2001 but goods which already warehoused prior to that date, will not be governed by amended notification, particularly for the reason that the period of 180 days provided under statue was not curtailed by this statute. In our view, reduced prior of 30 days will apply only in respect of goods warehoused on or after 1/6/2001…."

After extracting the relevant paragraphs from the judgments cited by the appellant and observing that the same are squarely applicable, the Bench distinguished the decision cited by the AR by noting that the same is an ex-parte order and had also not considered the earlier judgments on the subject matter.

Taking a view that the appellants are entitled for the interest free period of 180 days in respect of goods warehoused prior to 1/6/2001 but cleared for home consumption thereafter, the impugned order was set aside and the appeal was allowed.

(See 2016-TIOL-2343-CESTAT-MUM)