Settlement Commission interest discretion under customs law upheld; selective challenge to the settlement order was rejected in writ jurisdiction.

Interest on delayed duty payment under customs law remained payable, and the Settlement Commission's discretion to grant only partial immunity from interest was not open to interference under Article 226 absent legal error or arbitrariness. The court held that a settlement order cannot be selectively challenged by accepting the favourable parts while assailing only the interest component. In the absence of any infirmity in the exercise of discretion, the writ challenge to the interest levy was rejected.

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Issues: Whether the levy of interest fixed by the Settlement Commission, while granting immunity from penalty and prosecution and settling the duty liability, was liable to be interfered with in writ jurisdiction.

Analysis: The settlement order had accepted the duty liability, granted immunity from penalty and prosecution, and exercised discretion to allow only partial immunity from interest. The Court held that interest on duty not paid in time is payable under the customs law, and that the quantum of interest fixed by the Settlement Commission is a matter within its discretion from case to case. The order of the Settlement Commission could not be dissected by accepting the favourable portions and challenging only the interest component. In the absence of any infirmity in the exercise of discretion, no interference was warranted under Article 226 of the Constitution of India.

Conclusion: The challenge to the interest component was rejected and the writ petitions were dismissed.

Ratio Decidendi: A settlement order under the customs law cannot be selectively challenged by assailing only the interest component, and the Settlement Commission's discretionary determination of interest will not be interfered with in writ jurisdiction unless it is shown to be vitiated by legal error or arbitrariness.

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