11 October 1996
Supreme Court


Case number: /
Diary number: 1 / 4608






DATE OF JUDGMENT:       11/10/1996




JUDGMENT:                             WITH            CIVIL APPEAL NOS. 13097-l3l00 OF 1996      (Arising out  of S.L.P.(Civil)  Nos. 6015/93,  6016/93, 6017/93, 6018/93)                             AND      Civil  Appeal  Nos.  2416-18/93,  2419/93,  2420-25/93, 2426-28/93, 2429-32/93, 2433-38/93 ------------------------------------------------------------                       J U D G M E N T      Paripoornan.J.      Leave granted in all the special leave petitions.      In this  batch of  at appeals  a common question of law arises for consideration. It is regarding the interpretation to  be   placed    on  Section  61(2)  of  the  Customs  Act (hereinafter referred  to as  the ‘Act’).  The High Court of Bombay dismissed  a batch of 36 writ petitions in the matter by a common judgment dated 19th November, 1932. The question that arose for consideration was posed, thus:-      "On importation  of goods under OGL      if the  importers had kept the same      in the  warehouse under  Section 59      of the  Act  and  after  expiry  of      statutory period of three months if      they  clear  the  goods  under  the      Advance Licence  issued under  DEEC      Scheme, whether  such importers are      liable  to   pay  interest  on  the      amount of  duty which  was assessed      and  ascertained  on  the  date  of      warehousing  until   the  goods  is      cleared under Section 68 of the Act      (excluding the free period of three      months)." 3.   Writ Petition  No. 1854 of 1991 was treated as the main case. The facts in the said case were adverted to in detail. The judgment  in the  said case  was followed  in all  other cases, including  writ Petition  Nos. l908 of 1991,  1958 of 1991 and 3145 of 1991. The three appeals C.A. Nos. 2416-2418 of 1993 are preferred against the judgments in the said writ petitions. For  convenience sake  the facts relevant to Writ



Petition No.  1854 of  1991  (the  main  judgment)  will  be adverted to  since the facts are almost identical in all the other cases. 4.   There are  two petitioners in Writ Petition No. 1854 of 1991. The  first petitioner  is  a  public  limited  company incorporated  under  the  Companies  Act,  1956  The  second petitioner is  a shareholder.  The company is engaged in the business as  Importers,  Exporters  and  Manufacturers.  The first respondent  is Union of India and the second and third respondents  are   officials  of   Customs  Department.  The petitioners  imported  Polyester  Filament  Yarn  of  Taiwan origin. The said goods were shipped by the foreign suppliers from the  port of  shipment Keelung  and on  removal of  the goods  the   petitioners  filed   6  Bills   of  Entry   for warehousing. The goods were allowed to be warehoused under 6 Bonds all  dated 4th  December, 1990  expiring on 3rd March, 1991. On  or about  9th May  1991, the  petitioners filed  6 Bills  of   Entry  for   Ex-Bond  clearance   for  the  home consumption, Copies  of these Bills of Entry for Ex-bond are Exhibits B-1 to B-6. In view of the Advance Licence produced by the  petitioners, they  were entitled  to clear the goods under  Exemption   Notification  read  with  Duty  Exemption Entitlement  Certificate   (DEEC).  Respondents  accordingly assessed these  Bills  of  Entry  to"  Nil"  duty  but  they endorsed thereon to recover interest at 18% on duty from 4th March, 1991  till clearance,  although the  duty assessed is nil duty.  The petitioners  cleared  the  goods  under  DEEC Advance Licence. 5.   The action of the respondents to recover interest e per annum was  challenged by the petitioners. According to them, no duty was payable a fortiori, no interest is also payable. The action  is challenged  as  unauthorised,  arbitrary  and illegal. section  01(2) of  the Act,  as  it  stood  at  the relevant time,  is relied  on to  substantiate the plea. The thrust of  the plea is that the goods cleared were duty free and if  no duty was recoverable on the imported goods at the time of  clearance, no  interest can be charged much less at under Section 61(2) of the Act. 6.   In all  these cases,  the assessees have imported goods under OGL  and filed  Bills of  Entry under  Section 59  for warehousing. Accordingly,  the imported  goods were  kept in warehouse.  It   is  also  common  premise  that  all  these importers have obtained Advance Licence under DEEC Scheme at a later  point of time. It is also common premise that after expiry of  three months  period, these importers cleared the warehoused goods  against their  respective licence  without payment of duty and refused to accede to the request made by the  respondents  to  pay  interest  on  the  duty  assessed (earlier) at the time of warehousing the goods. 7.   The Division  Bench of  the Bombay  High  Court,  after referring to  Sections 2(14),  2(15), 12, 15, 25(1) and (2), 59, 61  and 68,  and  the  Exemption  Notification  (General Exemption No.147) and Duty Exemption Entitlement Certificate (DEEC) (pages  168-170 and  176 of  the paper book), came to the following  conclusion in  paragraph 20  of the judgment, thus:      "....until goods  were sought to be      cleared  against   Advance  Licence      till then,  duty under  the Customs      Act was payable to the Respondents.      By reason  of  facility  under  the      DEEC  scheme,  the  importers  were      permitted  to   apply  for  Advance      Licence.  The  amount  of  interest      therefore  started   accruing   and



    remained accumulated  from the date      when  goods   were  warehoused  and      subject  to   statutory  period  of      three  months   as  provided  under      Section 61(1)  (b) of  the Act.  In      our opinion,  the interest  started      automatically   accruing   to   the      amount  of  duty  after  expiry  of      period of  three  months  till  the      date of clearance of goods from the      ware house."      It further held thus:-      "We hold  that the  petitioners are      liable  to   pay  interest  on  the      amount of  duty payable at the time      when  goods  were  warehoused  till      they are  cleared at  the rate then      prevailing  under   Customs  Tariff      Act."           (emphasis supplied)      It was  concluded that  the various  assessees  --  the importers ---  are liable  to pay  interest on the amount of duty withheld  by them  in respect of warehoused goods after the expiry  of the  period of  three months till the date of clearance. 8.   We heard counsel. 9.   The main  facts,  relevant  statutory  provisions,  the Notification  and  Scheme  quoted  hereinbelow  are  not  in dispute. The  assessees imported  goods under  Open  General Licence and  filed Bills  of  Entry  under  Section  59  for warehousing. The  goods were  kept  in  the  warehouse.  The assessees obtained  Advance Licence  under DEEC  Scheme at a later point of time. This was admittedly after the expiry of the three  months period  stipulated under  Section 61(1) of the Act.  At the  time of  clearance of  the goods  from the warehouse against  the  respective  licences,  no  duty  was payable. The  question posed is :- Is it open to the Revenue to demand interest from the assessees under Section 61(2) of the Act?  We should  make it clear that in these cases it is common ground  that the  assessees have paid the charges due for the  warehouses ---  the charges like rent, etc. due for the respective warehouses. 10.  The following  statutory  provisions  are  relevant  in these cases:-      "2(14) "dutiable  goods" means  any      goods which  are chargeable to duty      and on  which  duty  has  not  been      paid;      (15) "duty" means a duty of customs      leviable under this act."      xxx                            xxxx      xxxxxx      "12. Dutiable goods -      (1) Except as otherwise provided in      this Act,  or any other law for the      time  being  in  force,  duties  of      customs shall  be  levied  at  such      rate as  may be specified under the      Customs Tariff  Act,  1975  (51  of      1975), or  any other  law  for  the      time  being   in  force,  on  goods      imported  into,  or  exported  from      India.      (2) The  provisions of  sub-section      (1) shall  apply in  respect of all



    goods belonging  to  Government  as      they apply  in respect of goods not      belonging to Government."      xxx                            xxxx      xxxx      "15. Date for determination of rate      of duty  and  tariff  valuation  of      imported goods-  (1)  The  rate  of      duty and  tariff valuation, if any,      applicable to  any imported  goods,      shall be  the rate and valuation in      force,---      (a) in  the case  of goods  entered      for home  consumption under Section      40, on  the date on which a bill of      entry in  respect of  such goods is      presented under that section;      (b) in  the case  of goods  cleared      from a  warehouse under  Section 68      on the  date on which the goods are      actually    removed     from    the      warehouse;      (c) in the case of any other foods,      on the date of payment of duty;      Provided that  if a  bill of  entry      has been  presented before the date      of entry  inwards of  the vessel by      which the  goods are  imported, the      bill of  entry shall  be deemed  to      have been  presented on the date of      such entry inwards."      xxx                             xxx      xxx      "25. Power  to grant exemption from      duty   -   (1)   If   the   Central      Government is  satisfied that it is      necessary in the public interest so      to do  it may,  by notification  in      the    public    Gazette,    exempt      generally  either   absolutely   or      subject in  such conditions  (to be      fulfilled    before     or    after      clearance), as  may be specified in      the  notification   goods  of   any      specified  description   from   the      whole  or   any  part  of  duty  of      customs leviable thereon.      (2) If  the Central  Government  is      satisfied that  it is  necessary in      the public  interest so  to do,  it      may, by special order in each case,      exempt from  the payment  of  duty,      under    circumstances     of    an      exceptional nature  to be stated in      such order, any goods on which duty      is leviable."      xxx                             xxx      xxx      "59. Warehousing  bond  -  (1)  The      importer of  any goods specified in      sub-section (1) of Section 61 which      have been  entered for  warehousing      and assessed to duty under Section      17 or  section 18  shall execute  a      bond binding himself in a sum equal



    to the  amount of the duty assessed      on such goods--      (a) to  observe all  the provisions      of  this  Act  and  the  rules  and      regulations  in   respect  of  such      goods;      (b) to  pay on  or  before  a  date      specified in a notice of demand,--      (i) all  duties, and  interest,  of      any, payable  under sub-section (2)      of Section 61.      (ii) rent  and changes claimable on      account of  such goods  under  this      Act, together  with interest on the      same from  the date so specified at      the rate  of six per cent per annum      or such  other rate  as is  for the      time being fixed by the Board; and      (c)  to   discharge  all  penalties      incurred  for   violation  of   the      provisions  of  this  Act  and  the      rules and regulations in respect of      such goods."      xxx                         xxxxxxx      xxxx      "61. Period  for  which  goods  may      remain warehoused.      (1) Any  warehoused  goods  may  be      left in the warehouse in which they      are deposited  or in  any warehouse      to which, they may be removed --      (a) in the case of --      (i) non-consumable store; or      (ii) goods intended for supply to a      foreign diplomatic mission; or      (iii) goods intended for use in any      manufacturing  process   or   other      operations in  accordance with  the      provisions of section 65; or      (iii) goods intended for use in any      hundred  percent   export  oriented      undertaking; or      (v)   goods   which   the   Central      Government may,  if it is satisfied      that it  is necessary  or expedient      so to  do, by   notification in the      official Gazette,  specify for  the      purposes of  this clause,  till the      expiry of one year:      Explanation --  For the purposes of      sub-clause (iv), ""hundred per cent      export-oriented  undertaking"   has      the same  meaning as in Explanation      2 to  sub-section (1)  of section 3      of the  Central  Excises  and  salt      Act, 1944;      (b) in the case of any other goods,      till the  expiry of  three  months,      after the  date on which the proper      officer made an order under section      60 permitting  the deposit  of  the      deposit of the goods in a warehouse      Provided that --      (1) in the case any goods which are      likely    to    deteriorate,    the



    aforesaid period  of  one  year  or      three months,  as the  case may be,      may be  reduced by the Collector of      Customs to  such shorter  period as      he may deem fit;      (ii) in the case of any goods which      are not  likely to deteriorate, the      aforesaid period  of  one  year  or      three months,  as the  case may be,      may,  on   sufficient  cause  being      shown be  extended by the collector      of  Customs   for  a   period   not      exceeding six  months  and  by  the      Board for such further period as it      may deem fit:      Provided  further   that  when  the      licence for  any private  warehouse      is  cancelled,  the  owner  of  any      goods  warehoused   therein  shall,      within seven  days from the date on      within seven  days from the date on      which notice  of such  cancellation      is given  or within  such  extended      period as  the proper  officer  may      allow, remove  one goods  from such      warehouse to  another warehouse  or      clear them  for home consumption or      exportation.      (2)  Where   any  warehoused  goods      remain in  a warehouse  beyond  the      period of  one year or three months      specified in  clause (a)  or clause      (b) of sub-section (1) by reason of      the  extension   of  the  aforesaid      period or  otherwise,  interest  at      such rate,  not exceeding  eighteen      per cent  per annum  as is  for the      time being fixed by the Board shall      be payable on the amount of duty on      the warehoused goods for the period      from the  expiry of  the period  of      one year  or, as  the case  may be,      three  months,  till  the  date  of      clearance of  the  goods  from  the      warehouse.      Provided that  the Board may, if it      considers it  necessary so to go in      the  public   interest,  waive,  by      special     order     and     under      circumstances  of   an  exceptional      nature  to  be  specified  in  such      order, the  whole or  part  of  any      interest payable  under  this  sub-      section   in    respect   of    any      warehoused goods."      xxx                             xxx      xxx      68. Clearance  of warehoused  goods      for   home   consumption   --   The      importer of  any  warehoused  goods      may    clear    them    for    home      consumption, if --      (a)  a   bill  of  entry  for  home      consumption  in   respect  of  such      goods has  been  presented  in  the



    prescribed form;      (b) 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      (c)............ "      (emphasis supplied)      The General  Exemption and  the  Import-Export  (Trade) Policy, 1990-93  regarding the  scheme of import of items in advance of issue of licence (para 355) provide as follows:-      GENERAL EXEMPTION NO. 147      Exemption to goods imported against      advance licences  -- In exercise of      the powers conferred by sub-section      (1) of  section 65  of the  Customs      Act,  1962  (52  of  1962)  and  in      supersession of the notification of      the  Government  of  India  in  the      Ministry of  Finance (Department of      Revenue)  No.   116/88  -   Customs      [G.S.R. No. 406 (E)] dated the 30th      March,    1988,     the     Central      Government, being satisfied that it      is necessary in the public interest      so  to  do,  hereby  exempts  goods      imported  into   India  against  an      Advance Licence  issued  under  the      Imports  (control)   Order.   1955,      being  materials   required  to  be      imported   for   the   purpose   of      manufacture       of       products      (hereinafter  referred  to  as  the      resultant       products)        or      replenishment of  materials  having      identical    specifications     and      technical characteristics  as these      actually used in the manufacture of      the resultant  products exported or      both, or  for export  as mandatory,      spares  alongwith   the   resultant      products, for  execution of  one or      more export  orders or for transfer      to another  Advance Licence holder,      from  the  whole  of  the  duty  of      customs leviable  thereon which  is      specified in  the First Schedule to      the Customs Tariff Act, l975 (51 of      1975) and  from the  whole  of  the      additional  duty  leviable  thereon      under section 3 of the said Customs      Tariff   Act,    subject   to   the      following conditions, namely :-      (a) ..............      (b) the  importer at  the  time  of      clearance of the imported materials      makes-      (i)  a  claim  in  writing  to  the      Collector  of   Customs  for   such      exemption and  executes a  bond  or      legal   undertaking   before   such      authority as may be approved by the      Central  Government  for  complying      with the  conditions  specified  in      this notification :



    (ii)  a   declaration  before   the      Assistant  Collector   of   Customs      binding himself to pay on demand an      amount equal  to the  duty leviable      but  for   the  exemption,  on  the      imported materials  in  respect  of      which the  conditions specified  in      this  notification  have  not  been      complied with:"      Explanation - in this notification      (i) .......................      (ii) .......................      (iii).........................      (iv) ...........................      (v) "  Imported into  India against      an Advance Licence" includes --      (a)  goods   imported   under   any      licence  (including   Open  General      Licence) issued  under the  Imports      and Exports (Control) Act, 1947 (18      of 1947),  for which at the time of      clearance out  of Custom’s Control,      a valid Advance Licence is produced      by the importer;"      xxx                             xxx      xxx      "IMPORT  -  EXPORT  (TRADE)  POLlCY      1990-93. (Blue Book)      Import of items in advance of issue      of licence      355(1)  Where   the   exporter   is      otherwise eligible to import an OGL      item or other items against his own      licences  and   also   claim   duty      exemption   benefits   under   this      Scheme, it  will be  open to him to      import such  items in advance under      OGL or against his own licences and      keep the  same in  Customs Bond for      getting clearance  against a  valid      licence issued  subsequently  under      Duty exemption scheme. Clearance of      the items  from the  Customs  Bonds      can,  however,  be  effected  after      obtaining  the  licence  under  the      said Scheme  and without  which the      benefit of  duty exemption will not      be   admissible.    The    declared      supporting  manufacturer   of   the      applicant can  also avail  of  this      facility by  effecting imports  OGL      items as an Actual User and get the      same cleared subsequently against a      valid licence issued under the said      Scheme in  favour of the applicant,      provided       the       supporting      manufacturer holds  a valid  letter      of   authority    issued   by   the      applicant in his favour in terms of      para 352 above.      (2) The  facility of  the aforesaid      provision  for   import  of   items      against  other   licences  will  be      available subject  to the condition      that  the   licence   in   question



    debited  at the time of import will      not be  re-credited after clearance      made    against  a  licence  issued      under Duty Exemption Scheme. It is,      however,   clarified that  in  case      the  applicant   is  already     in      possession  of  a  valid    licence      issued under the said scheme on the      date of arrival of the consignment,      then such items will be  cleared by      the  Customs  with  duty  exemption      benefits  without   insisting    on      keeping the  goods, in  the Customs      Bond before clearance."      (emphasis supplied) 12.  On a fair reading of the relevant provisions of the Act and in  particular Sections  15, 25,  59, 61  and 68 and the General Exemption granted by the Notification (pages 169-170 of the  paper book)  and the  Import-Export (Trade)  Policy, 1990-93 (Blue  Book) (page 176 of the paper book), we are of the opinion  that the  entire Scheme  is in  a ’package’. In allowing exemption to imported goods the Government had made it clear  that goods imported into India against the Advance Licence includes goods imported under any licence (including Open General Licence) for which at the time of clearance out of Customs  control a  valid Advance  Licence is produced by the importer. It is open to the importer to import the items in advance  under Open  General Licence and keep the same in Customs Bond  for getting  a  clearance  against  the  valid Licence issued  subsequently under  Duty  Exemption  Scheme. When the  notification granting  the exemption  and also the Import Policy  has totally  liberalised the  entire process, the mere  fact of  warehousing the goods on an anterior date and clearing  the same  on the basis of a subsequent Advance Licence,  validly  obtained  under  Duty  Exemption  Scheme, cannot by any stretch of imagination import the idea of levy of interest for the period the goods were kept in the warehouse. The  liability of  the assessee  to pay  the duty arises only  on clearance of the goods from a warehouse. The assessee has  no obligation to pay duty as long as the goods were kept  or remained  in the warehouse It is only in cases where the  goods kept in the warehouse are exigible to duty, and they  are so  kept in  the warehouse  for more  than the permitted  period,   and  the   said   goods   are   cleared subsequently and  duty paid,  interest is chargeable for the period of  delay in  the clearance  of the  goods. Since the goods warehoused  are kept  for a  longer period  such delay details delayed  payment of  duty payable and to interest is charged for such delayed payment of duty. 13.  In fiscal  Statutes, the  import of the words -- "tax", "interest",  "penalty",   etc.  are   well  known  They  are different concepts. tax is the amount payable as a result of the charging provision. lt is a compulsory exaction of money by a  public authority  for public  purposes, the payment of which is enforced by law. Penalty is ordinarily levied on an assessee for  some contumacious  conduct or for a deliberate violation of  the  provisions  of  the  particular  statute. Interest is  compensatory in  character and is imposed on an assessee who  has withheld  of any tax as and when it is due and payable. The levy of interest is geared to actual amount of tax  withheld and  the extent  of the delay in paying the tax on  the due  date. Essentially,  it is  compensatory and different from penalty-- which is penal in character. 14.  In the  above backdrop,  let us  consider the scope and content of  Section 61(2)  of the  Act as  it existed at the



relevant time.  Section 61(1)  prescribes the  period during which the  goods imported  may remain  in the warehouse. The normal period  in  different  cases  are  provided  therein. Extension of  time in special cases is also provided. If the goods  imported   remain  in  warehouse  beyond  the  period provided or  extended under  Section 61(1), the consequences are specified  in Section  61 (2)  of the  Act. As  per  the provisions of  the Act duty is payable (only) when the goods are cleared  . If  the goods are not cleared within the time granted under  Section 61(1)  of the  Act, and the goods are cleared later,  the payment  of duty  exigible on  the goods gets  automatically   delayed.  It   is  to  meet  the  said contingency  Section   61(2)  provides  that  if  the  goods warehoused are  cleared beyond the time specified or granted under Section  61(1) of  the Act, interest not exceeding 18% per annum  shall be  payable on  the amount  of duty  on the warehoused goods.  It  is  implicit  from  the  language  of Section 61(2)  of the Act that the interest shall be payable on the  amount of  duty "payable  or due  on the  warehoused goods for  the period from the expiry of period specified or granted till  the date  of clearance  of the  goods from the warehouse. In  this case,  on the  date of  clearance of the goods, no  duty is  payable. The  goods are  not exigible to duty at  that time. Calculation of interest is always on the principal amount.  The interest  payable under Section 61(1) (2) of  the Act is a mere "accessory of the principal and if the  principal  is  not  recoverable,  payable,  so  is  the interest on  it. This  is a  basic principle based on common sense and  also flowing  from the  language of Section 61(1) (2) of the Act. The principal amount herein is the amount of duty payable  on clearance  of goods.  When  such  principal amount is nil because of the exemption, a fortiori, interest payable is  also nil.  In other  words, we  are clear in our mind that  the interest  is necessarily  linked to  the duty payable. The  interest provided  under Section  61(2) has no independent or separate existence. When the goods are wholly exempted from  the payment  of  duty  on  removal  from  the warehouse, one  cannot be  saddled with the liability to pay interest on  a non-existing  duty. Payment of interest under Section 61(2)  is solely  dependent upon  the exigibility or factual liability  to pay the principal amount, that is, the duty on  the warehouse   goods  at the  time of delivery. At that time, the principal amount (duty) is not payable due to exemption. So,  there is  no occasion  or basis  to levy any interest, either. We hold accordingly. 15.  Counsel for  the Revenue  placed heavy  reliance on the decision of  this Court in Union of India vs. Bangalore Wire Rod Mill  (1996 (83)  ELT 251  (SC) ).  That was  a decision rendered in  appeal from  the decision of the Karnataka High Court reported  in 1992  (61) FLT 37 (Kar.) In that case the assessee -- M/s Bangalore Wire Rod Mill -- imported goods on which customs  duty was  leviable under the Act, in the year 1982. On  11.11.1982 it  warehoused the  said goods  without paying the duty as contemplated by Sections 58 and 59 of the Customs Act,  1902. On  7.3. 1985,  the  authorities  issued demand notice  calling upon  the assessee to clear the goods from the  warehouse within  15 days  after paying  duty  due thereon. On  the date  of warehousing the goods, the rate of customs duty  chargeable on  the imported  goods was  40% ad valorem. Fore  more than  three years  the assessee  did not clear the  goods. On  9.9.1988 the assessee paid the duty of Rs.1.40 crores  and interest  of Rs. 81.49 lakhs as demanded by the  authorities. On the date the goods were cleared from the warehouse,  duty was  leviable on the goods and the rate was 90%.  The assessee  contended that levy of interest can,



if at  all, be  only after  the period  fixed or  prescribed under Section  61(1) (a).  The said  period  was  originally three  years   but  was  reduced  by  amendment  Act  w.e.f. 13.5.1983 to  one year. The High Court held that interest is chargeable on  expiry of  15 days  from the  date of  notice dated  7.3.1985,   that  is  for  the  period  22.3.1985  to 9.9.1988. It was further directed that the interest shall be calculated taking  the rate  of duty  in force  from time to time during  the said period. The Revenue pleaded that it is entitled to interest from 11.11.1982 and the interest should be charged  calculating the  duty  at  90%  for  the  entire period, i.e.,  from 11.1  82 to  9.3.1988. The  plea of  the Revenue was  repelled. The  High Court  issued the following directions:-      "(a) The  respondents are  directed      to   re-compute   the   amount   of      interest payable  by the petitioner      at the  prescribed rate with effect      from 22.3.1985 upto 9.9.1988 on the      basis of the amount of customs duty      which  the  petitioner  would  have      been liable  to pay  to the Central      Government at  the rate,  which was      prevailing  during   the  different      period   between    22.3.1985    to      9.9.1988;      (b)  After   computing  the   total      amount of  interest payable for the      entire period  as  directed  above,      the respondents  shall  refund  the      balance of  the amount  of interest      collected from the petitioner."      In appeal,  this Court affirmed the said decision. This Court further  held that  according  to  the  Act  the  duty payable would  be the duty in force on the date of clearance of goods  from the warehouse and not the one in force on the date of  import or  on  the  date  of  warehousing  and  the liability to  pay interest  arises only  after the expiry of the period of 15 days from the date of demand notice. lt was further held  that since  the rate  of duty on the goods was not 90%  through-out the  period from 22.3.1985 to 9.9.1388, but was varying, the direction of the High Court to take the actual rate  in force  from time  to time  is reasonable. We fail to  see how  the said  decision is  applicable  in  the instant cases.  That was  a clear  case where the goods were exigible  on   duty  on  the  date  of  clearance  from  the warehouse. It  was not  a case  where the  goods were exempt from the levy of duty on the date of clearance. The interest was payable  on expiry  of 18  days from  the date of demand notice on  the duty  payable. The facts in the said case are clearly distinguishable  and can  have no  application to  a situation such  as the  one in  the present  case where  the goods are  not exigible  to duty  at  all  on  the  date  of clearance from  the warehouse  being totally exempt from the levy. 16.  We are  of opinion that the High Court erred in holding that the  importers --  assessees are liable to pay interest in the  instant cases in respect of warehoused goods, though at the  time of clearance the goods were exempt from payment of duty.  The common judgment of the Bombay High Court dated 19th November, 1992 is reversed. All the appeals are allowed with costs, including counsel fee Rs. 5,000/- in each case.