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Commissioner of Customs Vijayawada Versus Ruchi Soya Industries Limited

2016 (7) TMI 88 - CESTAT BANGALORE

Interest liability on the differential duty of the customs which was paid after 103 days from the date due to be paid to the national exchequer - violation of Section 47(2) or not - Respondents are arguing that under the provisions of Section 28AA of Customs Act they have the time of three months to make the payment of differential duty and the liability of interest can accrue only after the expiry of said three months prescribed in Section 28AA of the Customs Act and the department's demand for .....

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ents in Ajantha Tubes Ltd. case [2006 (9) TMI 381 - CESTAT, NEW DELHI] by my learned brother, Member(T) in my opinion is misplaced as the provisions of Section 28AA and Section 28AB are not invoked. On appreciation of facts, it is clear that there is no violation of Section 47(2) of the Act. The liability to pay interest cannot be assumed. - Decided against the revenue. - C/150/2007-DB - Final Order No. A/20417/2016 - Dated:- 8-6-2016 - Archana Wadhwa, Member (J) And Ashok K. Arya, Member (T) Fo .....

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er (Appeals). It is pointed out that originally the Deputy Commissioner of Central Excise and Customs, Kakinada Division had confirmed the liability of payment of interest of ₹ 6,96,558/- (Rupees Six Lakhs Ninety Six Thousand Five Hundred and Fifty Eight only) against the respondent namely M/s. Ruchi Soya Industries Ltd. along with imposition of penalty of ₹ 10,000/- (Rupees Ten Thousand only). This order of original adjudicating authority was reversed by the impugned order passed by .....

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te i.e. on 21.11.2000 the duty on the subject goods was revised vide the Notification No. 142/2000-Cus. dated 21.11.2000 and 144/2000-Cus. dated 21.11.2000. The appellant (department) argues that as per Section 15 of the Customs Act the relevant date for determination of rate of duty in case of the bill of entry which had been presented before the date of the entry inwards of the vessel, it would be the date when the entry inwards is granted to the vessel carrying the goods. 6. The law of the Cu .....

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enhanced from 35% to 65% w.e.f. 21.11.2000, which is the day when the vessel had factually been granted entry inwards. There is no dispute on these facts in the present case. 7. Respondents are arguing that under the provisions of Section 28AA of Customs Act they have the time of three months to make the payment of differential duty and the liability of interest can accrue only after the expiry of said three months prescribed in Section 28AA of the Customs Act and the department's demand for .....

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hanced rate of duty in spite of the reassessment of the subject bill of entry as per the rates prevalent on the relevant date for determination of rate of duty as per Section 17 of the Customs Act, they are liable to pay the interest for the delay in making the payment of the differential duty payable as per law. 9. The original adjudication order passed by the Deputy Commissioner confirmed the demand of interest against the respondents wherein he has referred to Section 47(2) of the Customs Act .....

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L.T 97 (Tri. -Del.)] saying that statutory interest is always attracted and it is automatically payable wherever there is a delay in payment of duty. It is pointed out that the case law quoted namely Ajanta Tubes Ltd. Vs. CCE, Meerut-II (supra) by the department is in respect of the facts of central excise but the ratio of the decision regarding liability of interest, wherever there has been delay in payment of duties to the national exchequer would be applicable to the facts of the present case .....

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as per the CESTAT's decision in the case of Ajanta Tubes Ltd. (supra) , for the period of delay they are liable to pay the interest for the said period of delay. The provisions of Customs Act both under 47 of the Customs Act as well as Section 28(1) of the Customs Act 1962 make it clear that the interest for delayed payment of duty is liable to be payable by the respondents. When the respondents have deliberately violated the provisions of law and have not paid the interest which was duly pa .....

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r proposed by learned brother, I proceed to refer to some of the important facts. As per the facts on records, the respondents filed a Bill of Entry on 20.11.2000 for clearance of the declared quantity of RBD Palmolein (edible grade) on 20.11.2000. As the rate of duty on the goods on that date was 35% ad valorem , the Bill of Entry was assessed by the Customs officers with the duty liability of ₹ 1,62,40,718/-. The appellant paid the said assessed duty on 20.11.2000 and the requisite order .....

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ions of Section 15 of the Customs Act, 1962. The said facts of enhancement of rate of duty did not come to the notice of the Customs officers, who passed the out of charge' order on 23.11.2000 and the goods were accordingly cleared by the respondents. 16. Subsequently, a letter was issued to the importer on 24.11.2000 and they were directed to pay the differential duty amounting to ₹ 1,02,84,944/-. As the respondent did not deposit the said amount during the intervening period, the dup .....

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e Revenue on the ground that they should pay the entire duty in one go as there is no provision for part payment of duty under the Customs Act. Ultimately, the total differential duty of ₹ 1,02,84,944/- was paid by the respondents on 10.3.2001. 17. The dispute in the present appeal relates to payment of interest and imposition of penalty upon the respondents. They were issued a show-cause notice dated 3.4.2001 alleging contravention of provisions of Section 47(2) of the Customs Act, 1962 a .....

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on the factual position. Admittedly, the Bill of Entry filed by the respondents on 20.11.2000 was assessed by applying the old rate of duty of 35% adv. and the "let go order was made on 23.11.2000. The respondents deposited the duty, as assessed by the Customs officer and the goods were accordingly cleared. It is only subsequently the Revenue found out the correct position and directed the respondents to deposit the differential duty. The respondent did not challenge the said direction and .....

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f the provisions of the said section, and there was no late payment of duty so assessed by the Customs, no demand for interest can be raised under Section 47(2) of the Act. 20.For better appreciation of the provisions of Section 47, I reproduce the same. "47. Clearance of goods for home consumption - (1) Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charge .....

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t, by notification in the Official Gazette], on such duty till the date of payment of said duty." As is clear from the reading of the above provisions, sub-section (2) of Section 47 provides for interest in those cases where importer has not paid the import duty assessed in terms of sub-section (1) of Section 47 within a period of 2 days from the date on which the assessed Bill of Entry is returned to him for payment of duty. In the present case, the respondent has admittedly paid the duty .....

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ants had paid the above amount of duty on 20.11.2000 and the requisite order to clear the goods for Home Consumption under Section 47(1) of the Act was made on 23.11.2000 itself. Hence, there is no case for the department to allege any delay in payment of duty so assessed. The provisions of Section 47(2) ibid could possibly be pressed into service only if there was a case of delay in payment of duty beyond 2 days from the date on which the said Bill of Entry was returned to the appellants for pa .....

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…… 12. I do not see any merit and substance in the department's above contention that the appellants had contravened the provisions of Section 47(2) ibid. Inasmuch as they had not made the payment of differential duty within a period of 2 days from the date of receipt of communication of reassessment of B/E i.e. from 24.11.2000. There is no such provision in Section 17 of the Act that an importer must pay the duty so reassessed within a period of 2 days from the date of communi .....

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ch as there is no ambiguity in the language of the Section 47(2) of the Customs Act and reading of the same clearly supports the above reasoning of the above appellate authority. 22. It is further seen that the Commissioner (Appeals) has also taken into account the provisions of Section 17 of the Customs Act, 1962 and has concluded as under: "15. It is significant to note that provisions of Section 17(4) and Section 47(2) of the Act are mutually exclusive to each other. The provisions of Se .....

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f 2 days from the date of return of such Bill of Entry. Once, the goods are finally assessed to duty and the duty so assessed has been paid by the importer and out of charge' order under Section 47(1) ibid, has been given by the proper officer, there is no room for reassessing the Bill of Entry under Section 17(4) and recover interest by alleging contravention of Section 47(2). Of course, any short levy or short payment of duty or interest etc. can be recovered in the manner prescribed under .....

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ntry was modified by way of an endorsement which was made only on 12.3.2001. For better appreciation, paragraphs 16 & 17 of the impugned order are reproduced : "16. It is significant to note that the duplicate copy of the said Bill of Entry carries following endorsement : "Differential duty payable due to increase of customs duty from 35% to 65% w.e.f. 21.11.2000 vide Notification No. 88/2000-Cus dated 21.11.2000 and duty on the excess discharged cargo amounts to ₹ 1,02,84,91 .....

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d to be cleared for Home Consumption under Section 47(1) ibid on 23.11.2000 itself. Under such circumstances, I find ample force in the appellants' contention that after having given out of charge' by the Customs Authorities the subject Bill of Entry could not be reassessed under Section 17. But the demand of differential duty / interest could still be raised under Section 28 (1) of the Act. There is no other provision under the Act by which differential duty, resulting out of any reasse .....

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n 28(1) of the Act. 17. It may be appreciated that the only provision, under which interest on delayed payment of duty could be demanded, is under Section 28AA or Section 28AB of the Act. Interest under Section 28AA could possibly be recovered if there was any delay of more than 3 months in payment of duty short levied / short paid etc. from the date of a formal order under Section 28(2) determining there under the duty short levied / short paid etc. It is an undisputed fact that no demand of di .....

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e elements were not alleged in the present case. Hence, the provisions of Section 28AB also had no application on the relevant date. It is needless to mention here that the SCN impugned before the adjudicating authority did not invoke the provisions of Section 28AA or Section 28AB. 23.The above observations made by the Commissioner (Appeals) are very relevant, keeping in view the factual position. There was admittedly a short levy of duty, but instead of issue a show-cause notice for such levy i .....

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be invoked. The said interest provisions require an assessee to pay the assessed duty within a period of 3 months from the date of determination of duty. If there is no such determination by the Revenue, the question of payment of interest does not arise. As such, I find no infirmity in the views adopted by the Commissioner (Appeals). Similarly, I agree with the Commissioner (Appeals) that when there is no interest liability alleging contravention of provisions of Section 47(2) of the Act, impo .....

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ich arose between members while deciding the above appeal. The point of difference is Whether the appeal filed by the revenue has to be allowed, as held by the Member (Technical) of the same has to be rejected as held by the Member (Judicial) . 2. The facts with relevant dates having been narrated by the learned Member(J), I do not wish to repeat the same. The issue is whether respondents are liable to pay interest on the differential duty. The letter directing to pay the differential duty of &# .....

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