Circular No. 64 dated 26^th July 2000

I am directed to invite your attention on the subject mentioned above and to state that a case was referred to for clarification on certain doubts regarding levy of interest for delayed payment of duty under Section 47(2) of the Customs Act, 1962 where the bill of entry for certain imports was assessed provisionally denying the benefits of EPCG scheme, as EPCG license was not produced at the time of assessment. The importer did not clear the goods. Subsequently, the importer got the EPCG license issued and submitted to customs. The bill of entry was reassessed allowing the benefits of EPCG scheme, thus reducing the duty liability on the importer. The importer paid the duty so reassessed. A doubt was raised whether the date of original assessment or date of reassessment would be relevant for calculation of interest under section 47(2) of Customs Act. Another doubt raised was whether interest would be charged on originally assessed amount for the period during date of original assessment to date of reassessment and on reassessed amount for the period subsequent to reassessment to date of payment of duty.

2.      The issues have been examined in consultation with the Ministry of Law, Department of Legal Affairs. It has been clarified that the interest in cases similar to as cited above would be payable on the reassessed amount for the period 2 days after the date of original assessment to the date of payment of duty.

3.      Kindly acknowledge receipt of the letter.