Legal principle

Interest on a duty liability arising from confiscation and redemption under Section 125 can run only from the date that liability is determined in adjudication, not from the date of the original assessment of the Bill of Entry.

Court decision

The petition was partly allowed. Customs must recompute the interest, excluding the whole period from the original assessment in May 2015 to 28.02.2023 (the date of the Order-in-Original), and charge interest only for the period after that, if payable under law. It must give credit for all payments and the re-assessment of 29.08.2023, and issue a fresh computation within four weeks. The Order-in-Original itself was not disturbed.

Facts

Vishal Oil and Lubricants Co. filed Bill of Entry No. 9174780 on 08.05.2015 at ICD Tughlakabad declaring "Bitumen" (CTH 27132000) worth Rs.36,73,758, with duty of Rs.9,22,210 assessed. On examination and a CRCL test, the goods were found to be "Used Oil" (CTH 27101990). They were seized on 05.06.2015 and a show cause notice was issued on 15.09.2015. Despite the importer asking for quick adjudication, the Order-in-Original came only on 28.02.2023. It held the goods liable to confiscation (taken by the government) under Sections 111(l) and 111(m), allowed redemption on a fine of Rs.1,83,000, imposed penalties of Rs.5,000 and Rs.1,83,000, and found no extra duty payable. Customs EDI then showed interest growing to Rs.15,21,645, counted from May 2015. The importer filed a writ in the Delhi High Court.

Key provisions

• Section 125(2), Customs Act, 1962 — Option to pay fine in lieu of confiscation