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TMI Blog2010 (6) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent no. 4 from proceeding further with the show cause notices dated 5-9-06 and 13-11-06 at ANNEXURE J and ANNEXURE L hereto. (BB) Your Lordships be pleased to issue a writ of or in the nature of mandamus quashing and setting aside the order of the respondent no. 2 rejecting the representation of the petitioner for extension of the warehousing period and for waiver of interest after 17-3-2006 vide its order No. 01/Panchshil/07-08 dated 7-3-2008/8-3-2008 at ANNEXURE 'N' hereto. (3) Pending admission, hearing and final disposal of this petition, your Lordships be pleased to : i. Stay and suspend operation and implementation of the order passed by the respondent No. 2 rejecting the application of the petitioner for extension of the warehousing period and waiver of interest as communicated by letter dated 3-11-06 at ANNEXURE K hereto and the further pleased to direct the respondents to permit clearance of cargo on such items and conditions as deemed just and proper by the Hon'ble Court. ii. Restrain respondent No. 4 from proceeding further with the show cause notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner could not remove the goods. The petitioner, therefore, made an application dated 20th March, 2006 requesting for waiver of interest and another application dated 26th March, 2006 requesting for extension of warehousing period for three months. Vide show-cause notice dated 5th September, 2006, the petitioner was called up to show cause as to why interest amounting to Rs. 41,74,758/- should not be recovered from it under Section 61(2)(ii) of the Customs Act, 1962. The petitioner submitted its reply to the said show-cause notice stating that its application for waiver was pending. Vide communication dated 3rd November, 2006, the petitioner was informed that its application for waiver of interest payable on clearance of the contaminated cargo as well as application for re-extension of warehousing period has been rejected. Being aggrieved, the petitioner filed the present petition challenging the aforesaid communication 5. On 12th February, 2008, the Court made an order in the following terms in the present petition :- "Having heard Mr. Mihir Joshi with Mr. Dhaval Shah for the petitioner and Mr. R.M. Chhaya, learned Standing Counsel for the Revenue, we are of the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances pointed out by the petitioner indicating compelling reasons beyond its control, the Chief Commissioner was not justified in rejecting the application of the petitioner for further extension. It was urged that considering the fact that delay in clearance of the goods has been occasioned on account of the default on the part of the Customs authorities, the Chief Commissioner was not justified in not granting waiver of interest till the goods were finally cleared. Referring to the contents of the impugned order, it was pointed out that the Chief Commissioner has placed reliance upon a report made by the Commissioner of Customs, Kandla as well as a report of the Additional Commissioner of Customs, Kandla, copies of which had not been supplied to the petitioner and as such, the impugned order stands vitiated on the ground of breach of principles of natural justice. It was accordingly submitted that the impugned order be quashed and set aside and the relief prayed for in the petition, be granted. 9. As can be seen from the impugned order made by the Chief Commissioner, the Chief Commissioner has placed reliance upon the provisions of Section 61 of the Act as well as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehousing period, which was up to 17th March, 2006. 11. On the question of waiver of interest, the Chief Commissioner noted that for the period up to 17th March, 2006 there was a dispute regarding the classification of the goods, which was pending for want of chemical test report; on 9th March, 2006, BPCL Laboratory sent the final test report; and that the warehousing period was extended up to 17th March, 2006 by the Commissioner of Customs, Kandla. The Chief Commissioner was accordingly of the view that the petitioner had a good case for waiver of interest only up to 17th March, 2006. 11.1 The Chief Commissioner further noted that the warehousing period had expired on 18th March, 2006, whereas applications dated 20th March, 2006 and 27th March, 2006 had been made for waiver of interest and for extension of the warehousing period after the expiry of the warehousing period. As regards the contention that the petitioner had requested for retention of cargo of 30% as security for interest which may finally be payable and release of 70% of the cargo, reliance was placed upon the report made by the Additional Commissioner of Customs, Kandla wherein it was stated thus : there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; The details of the persons to whom the cargo is to be sold. (ii) End use bond along with the bill of entry shall be procured from the buyer and that shall be submitted to respondent No. 4 and thereafter end use certificate shall be submitted for discharging the bond to the respondent No. 4. At this stage, two bills of entry were pending clearance. On 20th March, 2006, the petitioner made an application for waiver of interest leviable under Section 61 of the Customs Act. On 27th March, 2006, an application came to be made for extension of warehousing period. For clearance of the goods the respondents insisted on payment of interest. However, since the petitioner did not pay the same the goods were not cleared. The petitioner thereafter made a request to clear 70% of the cargo and retain 30% of the cargo as security towards interest liability which request was accepted by the respondents vide letter dated 23rd May, 2006 and the pending bills of entry were cleared in May/June 2006. Thereafter on 5th September, 2006 show cause notice came to be issued claiming interest of Rs. 41.74 lacs. However, the said show cause notice and subsequent show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any interest payable under this section in respect of any warehoused goods : 14. On a plain reading of the aforesaid provision, it is clear that if goods remain in the warehouse beyond the specified period, the owner of the goods would be liable to pay interest at the specified rate. However, by virtue of the proviso thereto, the Board is empowered to waive the whole or any part of the interest payable under the Section by order and under circumstances of exceptional nature, to be specified in such order. Thus, while considering the application for waiver of interest, the authority concerned is required to examine as to whether any exceptional circumstances have been made out so as to waive interest payable by such person and is also required to specify such reasons in the order granting waiver of interest. In the facts of the present case, as is apparent from the facts noted hereinabove, after the order made by this Court on 7th March, 2006, the only reason advanced by the petitioner is that the respondents were not permitting clearance of goods without payment of interest. Non-payment of interest on the part of the petitioner to facilitate the clearance of goods can at best ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion that the delay in clearance of the goods was not occasioned on account of default on the part of the respondents. The Chief Commissioner in the impugned order has specifically referred to the facts stated in the said report to the extent he has placed reliance upon the same. While challenging the impugned order of the Chief Commissioner, it is not the case of the petitioner in the petition that the findings recorded therein are incorrect. Except for stating that the delay had been caused by the respondents, no specific averments have been made to point out as to how the respondents are responsible for delay, or as to how the factual findings recorded by the Chief Commissioner are erroneous. In the circumstances, the petitioner has not been able to point out any prejudice on account of non-supply of the said reports. 17. Thus, from the aforesaid facts, it is apparent that after the order dated 7th March, 2006 made by this High Court, in Special Civil Application No. 1046 of 2006 directing the Department to permit the clearance of cargo as other "petroleum products, clearance was permitted qua pending bills of entry in May/June. The fact that the respondents were insisting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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