ORDER
V.P. Gulati, Member (T)
1. A common issue is involved in all the stay applications and these are therefore taken up together for disposal.
2. The Ld. Lower Authority has held that the demand raised is barred by limitation. Ld. D.R. on behalf of the Revenue has pleaded that the demand has been raised for the reason that the appellants had not paid the interest in terms of Section 47 read with Section 61(3) of the Customs Act, 1962. He has pleaded interest in respect of the goods which have been assessed from the Warehousing is required to be paid. He has pleaded no doubt in terms of Section 47 read with Section 61(3) of the Customs Act, 1962 no period of limitation has been provided for recovery of the interest for the period after seven days of the assessment of Bill of Entry till the clearance of the goods for either consumption or warehousing but the facts remain that the law provides for such interest to be paid and if there is no limitation the period of limitation as provided under the Limitation Act would apply. He has therefore pleaded that the demand of interest could not be hit by bar of limitation.
2. The Ld. Consultants with others who are appearing on behalf of the Respondents have pleaded that the appellants had paid their interest as per earlier demand in terms of the bonds executed for Warehousing of the goods and the bond have also been cancelled. Their plea is that the interest is recoverable from the importers both in terms of Section 47 and in terms of Section 61. In terms of Section 47 after the period of 7 days after the assessment of Bill of Entry till the warehousing of the goods and in terms of Section 61 for the period the goods over stayed in the Warehousing beyond the permissible Warehousing period. They have pleaded that the interest in question in the appeals before us relates to the period till the stage of the Warehousing. At this stage Ld. D.R. pointed out that in case Warehoused goods while the rate applicable for recovery of interest is set out under Section 47 the interest to be recovered is in terms of Warehousing provisions under Section 61(3) and therefore the recovery of the interest has to be in terms of bond executed by the appellants if the same is not paid at the time of clearance of the goods. In the present case he pleaded that the goods had been cleared and the interest calculated based on the understanding of the law by the authorities was also paid. Subsequently it was felt that the appellants were required to pay further interest for the period beyond seven days after the assessment of the Bin of Entry and therefore there was a demand for balance interest amount due. He fairly conceded that this demand was raised after two years beyond the period of six months after the clearance of the goods. He has pleaded that inasmuch as under Section 61 (3) no period of limitation has been prescribed for recovery of interest the department is entitled to claim the interest due in terms of the general period of limitation prescribed under Limitation Act and which is three years.
4. We have considered the submissions made by both sides. We observe that no period of limitation has been prescribed under Section 61(3). A reasonable period of limitation will have to be read under this section as held by the Hon’ble Supreme Court in the case of Government of India v. Citedal Fine Pharmaceuticals – 1989 (42) E.L.T. 515 (SC). This Tribunal in number of cases where the demands were raised under Rule 57-I at a time when no period was prescribed for recovery of Modvat credit has held that the reasonable period of limitation would in that case would be six months or five years depending upon whether there was any suppression of facts involved or not. We observe that the scheme of the Customs Act is similar to the scheme of Central Excises and Salt Act and in that view of the matter we hold that similar view has to be taken in the case of recovery to be made under the Customs Act where no period of limitation has been prescribed. In this premise we therefore hold that the lower authority’s order is prima facie maintainable in law and the prayer of the department for stay of the operations of the order of the Ld. Lower Authority has to be dismissed. Inasmuch as it is a covered matter by our decisions referred to supra the appeals themselves are also taken up for disposal with the consent of the both sides. The only plea of the Revenue is that in the absence of any period of limitation provided under Section 61(3), the general period, of limitation prescribed under the Limitation Act should be made applicable. We are unable to accept this plea of the Ld. D.R. in view of the judgment of the Hon’ble Supreme Court in the case of G.O.I. v. Citedal Fine Pharmaceuticals (supra). The Hon’ble Supreme Court in para 6 has held is reproduced below:
“Ld. Counsel appearing for the respondents urged that Rule 12 is unreasonable and violative of Article 14 of the Constination, as it does not provide for any period of limitation for the recovery of duty. He urged that in the absence of any prescribed period for recovery of the duty as contemplated by Rule 12, the officer may act arbitrarily in recovering the amount after lapse of long period of time. We find no substance in the submission. While it is true that Rule 12, does not prescribe any period within which recovery of any duty as contemplated by the Rule is to be made, but that by itself does not render the Rule unreasonable or violative of Article 14 of the Constitution. In the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable, would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether in the facts and circumstances of the case notice or demand for recovery was made within reasonable period. No hard and fast rules can be laid down in this regard as the determination of the question will depend upon the facts of each case.”
5. This Tribunal in the context of the demands raised under Rule 57-I of the Central Excises and Salt Act, 1944 when no period of limitation was prescribed under the said rule has held that taking into consideration the scheme of the Central Excise Law and the limitation periods prescribed for various purposes under different sections and rules reasonable period limitation, would be six months or five years depending upon whether there has been any suppression of facts etc. with the fraudulent intention or not. We observe as pointed out before us that the scheme of the Central Excises and Salt Act so far as the recovery of duty etc. is concerned is similar to that under the Customs Act, 1962. Here also we observe under Section 28 of Customs Act, 1962 period of limitation prescribed for recovery of duty is six months or five years as above and also the period for claim of refund is also six months. The position being similar we hold that the same logic should apply in respect of the recovery to be made under the Customs Act where no period of limitation has been prescribed. We therefore hold that the Ld. Lower Authority is right in holding that the demand for interest beyond the period of six months from clearance of goods is barred by limitation and we therefore uphold the order of the lower authority and dismiss the appeals. We observe that the relevant date for demand of duty would be date on which goods were allowed clearance from the Warehouse as the interest is required to be paid till the date of clearance in terms of Rule 61(3) of the Customs Act, 1962. The department recovered at the time of clearance the duty as well as interest as held payable at that time and cancelled the bonds. Taking into consideration the relevant date the demand have been clearly raised much after the period of six months. The Appeals of the Revenue are therefore dismissed.