Order Date – 20 February 2023

Parties: M/s. DCM Hyundai Ltd., vs. The Commissioner of GST & Central Excise

Facts-

• The Appellant, M/s. DCM Hyundai Ltd. is engaged in the manufacture and export of Marine Freight Containers. The appellant earlier was 100% EOU and De-Bonded as per the Ex-Bond Bill of Entry.
• The appellant had applied for De-Bonding and paid appropriate duties on the capital goods, imported raw materials, finished stock, and indigenous capital goods lying as stock. It was noticed that certain raw materials were lying in stock beyond the warehousing period of three years. The appellant paid duty on raw materials lying in stock to the tune of Rs. 40, 89,232/- along with duties on other items.
• The department stated that the duty paid on raw materials warehoused beyond the period of three years was liable to interest at the rate of 15% per annum.

Issue –

• Whether the appellant is liable to pay interest on the duty paid on the stock of raw material warehoused beyond the period of three years or whether the SCN is time-barred?

Order –

• The Court observed that the Board Circular dated 14.02.2006 provides the guidelines where the interest would generally be waived have been framed keeping in mind the fact that for certain specified categories of imports such as ship stores and others, the import duty is finally not payable. Charging of interest would escalate the costs unnecessarily, essence the guidelines cover Goods imported by 100% EOUS. The said circular intends to give some solace to a 100% EOU by waiving the liability of interest.
• The Tribunal in the case of Commissioner of Customs, Madras Vs Electronic Research Ltd. (supra) held that in absence of any limitation period for demanding interest in respect of Customs duty payable in term of Section 61(3) of Customs Act, in the case of warehoused goods, the limitation period would be the period prescribed in Section 28 of the Act ibid. The Tribunal relied on the judgment in the case of TVS Whirlpool Ltd (Supra).
• After appreciating the facts, evidence and the decisions as above, the Tribunal was of the view that the demand of interest cannot sustain as the SCN is time barred.
• In the result, the impugned order is set aside. The appeal is allowed with consequential reliefs, if any.