Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Circular No.15/2009- Customs
Dated the 12 May, 2009
Subject: Levy of Interest under Section 47(2) of the Customs Act, 1962 for
delayed payment of duty in respect of clearance of goods from a bonded warehouse
– Reg.
A reference is invited to Section 47 (2) of the Customs Act 1962, which provides
that where the importer fails to pay the import duty within 5 working days from
the date on which the Bill of Entry for home consumption is returned to him for
payment of duty, he shall pay interest on the amount of duty till the date of
payment of the duty, at the rate fixed by the Central Government. A doubt has
been raised whether such interest under Section 47 (2) is payable on goods
deposited in a warehouse and for which a Bill of entry for home consumption is
filed under Section 68 of the said Act, if the importer fails to pay the duty
within 5 working days from the date on which such Bill of Entry filed under
Section 68 is returned to him for payment of duty.
- The matter has been examined by the Board. As per Section 46 of the Customs
Act, 1962, the importer of any goods, other than goods intended for transit or
transshipment, shall make entry thereof by presenting to the proper officer a
bill of entry for home consumption or warehousing in the prescribed form. The
provision regarding payment of interest for delayed payment of duty after the
return of Bill of Entry is contained in Section 47 which reads as under:
“(1) Where the proper officer is satisfied that any goods entered for home
consumption are not prohibited goods and the importer has paid the import duty,
if any, assessed thereon and any charges payable under this Act in respect of
the same, the proper officer may make an order permitting clearance of the goods
for home consumption.
(2) Where the importer fails to pay the import duty under sub-section (1) within
five days excluding holidays from the date on which the bill of entry is
returned to him for payment of duty, he shall pay interest at such rate, not
below ten per cent and not exceeding thirty six per cent. per annum, as is for
the time being fixed by the Central Government, by notification in the Official
Gazette, on such duty till the date of payment of the said duty”.
- A harmonious reading of the above provisions indicates that the provisions of
Section 47 (1) are applicable to the goods entered for home consumption by
filing a bill of entry accordingly, and the interest liability for delayed
payment of duty after the return of Bill of Entry is attracted on import duty as
assessed under Section 47 (1) on such goods.
- In case of goods deposited in a warehouse and being cleared for home
consumption, the entry for clearance (i.e. ex-bond Bill of Entry) is made under
Section 68. As per Section 68 of the Act, the importer of any warehoused goods
may clear them for home consumption, if
- a bill of entry for home consumption in respect of such goods has been
presented in the prescribed form;
- the import duty leviable on such goods and all penalties, rent, interest and
other charges payable in respect of such goods have been paid; and
- an order for clearance of such goods for home consumption has been made by
the proper officer.
- Section 68 is a self-contained provision dealing with the clearance of goods
from a warehouse for home consumption and this provision does not contain a
reference to payment of interest on delayed payment of duty after return of Bill
of Entry.
- Further, as per the provisions of Section 61 (2), interest on warehoused
goods is payable when they remain in the warehouse beyond the permitted
warehousing period specified in Section 61 (1). Such interest is payable on the
amount of duty payable at the time of clearance of the goods from the expiry of
the said warehousing period (including such extended period), till the date of
payment of duty on the warehoused goods. Thus, when a provision has been made
for warehousing of imported goods, without payment of interest for a specified
period, it is not the intention to charge interest within the said interest-free
period, even if duty is paid after 5 days after return of the ex-bond Bill of
Entry. Interest in any case is chargeable if the warehoused goods remain in the
warehouse beyond the permitted period for the period from the expiry of the said
period till the date of payment of duty on the warehoused goods.
- In view of the foregoing, it is clarified that the provisions of Section 47
(2) are not attracted in case of clearances made under Section 68. Consequently,
no interest is liable to be paid on goods deposited in a warehouse and being
cleared for home consumption by filing the Bill of Entry prescribed under
Section 68 of the Act, ibid, for delayed payment of duty i.e. if the importer
fails to pay the duty within 5 working days from the date on which such Bill of
Entry is returned to him for payment of duty. However, interest on warehoused
goods is payable when they remain in a warehouse beyond the period specified in
sub-section (1) of Section 61 as per provisions of sub-section (2) of Section
61.
- Wide publicity to this Circular may be given by way of issuance of public
notice and standing order.
- Difficulties, if any, faced in the implementation of this circular, may be
immediately brought to the notice of the Board.
- Please acknowledge receipt.
- Hindi version follows.
Yours faithfully,
(P. S. Pruthi)
Commissioner (Customs &EP)
F. No. 473/01/2007 – LC