Page 244 - ELT_15th July 2020_Vol 373_Part 2

226 EXCISE LAW TIMES [ Vol. 373

ing himself to pay double the amount of duty assessed on the said goods
and undertaking “to pay on or before a date specified in a notice of demand
all duties, rent and charges claimable on account of such goods under this
Act, together with interest on the same from the date so specified at the rate
of six per cent per annum or such other rate as is for the time being fixed by
the Board”. Clause (a) of sub-section (1) of Section 61, as obtaining on the
date of warehousing of the said goods, [it is not disputed before us that the
imported goods represent “consumable stores” within the meaning of Sec-
tion 61(1)(a)] prescribed a period of three years beyond which the imported
goods could not be warehoused. On May 14 1983, however, this clause was
amended and the period of three years was reduced to one year. Sub-
section (2) of Section 61 [as inserted by Act 11 of 1983] reads as follows :-
“(2) Where any warehoused goods remain in a warehouse
beyond the period of one year or three months specified in clause (a)
or clause (b) of sub-section (1) by reason of the aforesaid period or
otherwise, interest at such rate, not exceeding eighteen per cent per
annum as is for the time being fixed by the Board, shall be payable on
the amount of duty on the warehoused goods for the period from the
expiry of the period of one year or as the case may be, three months,
till the date of the clearance of the goods from the warehouse :
Provided that the Board may, if it considers it necessary so to
do in the public interest, by special order and under circumstances of
an exceptional nature to be specified in such order to whole or part of
any interest payable under this sub-section in respect of any ware-
housed goods.”
We have referred to sub-section (2) of Section 61 for the reason that it
was relied upon by the appellant before us, though, in our opinion, it is not
really relevant herein as we shall point out presently.
4. In this case, the respondent did execute a bond as contemplated
by Section 59(1) while warehousing the goods on November 11, 1982.
Though the period of three years prescribed in Section 61(1)(a) was reduced
to one year by an Amendment Act with effect from May 13, 1983, neither
the respondent cleared the goods nor the authorities issued a demand no-
tice within one year from May 13, 1983. Only on March 7, 1985 did the au-
thorities issue a notice to the respondent calling upon him to clear the
goods on paying the appropriate duty. Now, according to the Act, the duty
payable would be the duty in force on the date of clearance from the ware-
house and not the date in force on the date of import or on the date of
warehousing. For one or the other reason, the respondent did not clear the
goods immediately but cleared them only on September 9, 1988. He paid
the duty at the rate of ninety per cent and that aspect is no longer in issue
herein. While clearing the goods, the authorities demanded and collected
interest on the said amount of duty for the period commencing from No-
vember 11, 1982 to September 9, 1988. It is this aspect which alone is in dis-
pute between the parties in these appeals. The Division Bench of the High
Court has held that the interest is chargeable only for the period March 22,
1985 [on expiry of fifteen days from the date of notice, dated March 7, 1985]
to September 9, 1988. The Division Bench has further directed that interest
shall be calculated taking the rate of duty in force from time to time during
the said period. The State has preferred these appeals contending that (1) it
is entitled to interest from November 11, 1982 and (2) the interest should be
charged calculating the duty @ ninety per cent for the entire period No-
vember 11, 1982 to September 9, 1988.
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