Page 245 - ELT_15th July 2020_Vol 373_Part 2

2020 ] COMMR. OF CUS. & C. EX., COIMBATORE v. LAKSHMI MACHINE WORKS LTD. 227

5. We do not think that the claim of the appellant is sustainable in
law. The language of Section 59(1)(b), as it stood at the relevant time, is
clear and unambiguous. It says that the importer shall have to execute a
bond undertaking inter alia to pay interest from the date specified in the no-
tice of demand. We have already extracted clause (b) in full hereinbefore.
The liability to pay interest arises only after the expiry of the period pre-
scribed in the notice of demand. It has been held by the High Court that the
present matter is not governed by Section 61(2), as it stood at the relevant
time, but by Section 59(1) alone. Indeed, it is submitted that when the re-
spondent applied for extension of time of warehousing under Section 61(2),
the Government told it that the said provision had no application and
hence, time cannot be extended thereunder. Once that is so, we must go by
what Section 59(1) says. According to it, the duty became due on issuing the
notice of demand. The notice prescribed fifteen days for payment. Interest
is chargeable only thereafter as held by the High Court, which, in our opin-
ion, is a reasonable way of understanding the provision. Secondly, we see
no justification or legal basis for the appellants plea that the interest must
be paid taking the rate of the duty at ninety per cent for the said entire peri-
od. As a matter of fact, the rate of duty on the said goods was not ninety
percent through out the period March 22, 1985 to September 9, 1988. It was
varying. The High Court’s direction, therefore, to take the actual rate in
force from time to time is a reasonable one. We are, therefore, of the opinion
that the judgment of the High Court does not call for any interference. The
appeals are accordingly dismissed.”
7. In Commissioner of Customs, Chennai v. Lakshmi Electrical Control Sys-
tems Ltd., [2016 (336) E.L.T. 619 (Mad.)], after considering the Circular No.
475/39/90-Cus.VII, dated 8-8-1990, at paras 8 to 10, observed as hereunder :-
“8. But, we do not think that the Learned Senior Panel Counsel is
correct. The correct expression used in Section 27(1) is ‘interest, if any, paid
on such duty’.
The Circular dated 8-8-1990, reads as follows :
“F. No. 475/39/90-Cus.VII, dated 8-8-1990
Government of India
Ministry of Finance (Department of Revenue)
Central Board of Excise & Customs, New Delhi
Subject : Warehousing Interest -
Section 27 of Customs Act inapplicable
****
It has been advised that warehousing interest levied under Sec-
tion 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.”
9. The circular does not refer to Section 27. It refers to only Customs
duty. Definitely, the law makers have understood the distinction between
duty and the interest payable on such duty. If the contention of the Learned
Senior Panel Counsel is accepted, we may have to read ‘interest’ into the
word ‘duty’. The amended Section 27(1) reads as follows :
“27. Claim for refund of duty. - (1) Any person claiming re-
fund of any duty and interest, if any, paid on such duty -

EXCISE LAW TIMES  15th July 2020  245