CUS CIR NO. 42/2003 DATE 20/05/2003

Clarification regarding the scope of amendment made to Section 68 of the Customs Act, 1962 made in the Finance Bill, 2003

It may be recalled that Section 68 of the Customs Act, was amended in Budget 2003, to incorporate the following proviso, -

“Provided that the owner of any warehoused goods may, at any time before an order for clearance of goods for home consumption has been made in respect of such goods, relinquish his title to the goods upon payment of rent, interest other charges and penalties that may be payable in respect of the goods and upon such relinquishment, he shall not be liable to pay duty thereon. "(emphasis supplied).

2. While it is clear that upon relinquishment of the title of the goods, the importer gains a freedom from liability to pay duty thereon, there appears to be some confusion in the field, whether such freedom also extends to the ‘interest accrued on the said duty till the date of such relinquishment’. The confusion appears to have generated from the word 'interest' appearing in the text of the proviso.

3. In this regard it is clarified that the word 'interest' appearing in the said proviso, does not relate to 'interest accrued on the said duty till the date of such relinquishment' but relates to interest on other dues such as warehouse charges, rent etc.

4. The trade and field formations may be informed suitably.

5. This issues with the approval of the Member (Customs) (CBEC).

Sd/-
(Gautam Bhattacharya )
Director (TRU)

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