Interest on duty liability for breached export obligation upheld; limitation plea cannot defeat recovery under bonded exemption imports.

Interest arising from breach of export obligation under an exemption-based import scheme was treated as recoverable from the date the duty liability arose, and the limitation defence was rejected. Where concessional imports are made subject to fulfilment of export conditions and backed by a bond, failure to satisfy those conditions does not defeat recovery of interest merely by pleading time-bar. The statutory scheme and the bond undertaking supported enforcement of the demand, and the demand was held valid and enforceable.

---

---

Issues: Whether the demand of interest arising from non-fulfilment of export obligation under the exemption notification was time-barred and therefore unsustainable.

Analysis: The respondent had imported goods under an export promotion scheme and had not fulfilled the stipulated export obligation within time. The authority held that the liability to pay interest accrued from the date of duty liability and that the importer's failure to comply with the notification conditions could not defeat the demand on limitation grounds. The demand was also treated as supported by the bond undertaking and by the statutory scheme governing recovery of duty and interest on breach of exemption conditions.

Conclusion: The demand of interest was held to be valid and not time-barred, in favour of Revenue.

Final Conclusion: The appellate order was set aside and the Revenue's challenge succeeded, resulting in restoration of the demand.

Ratio Decidendi: Where concessional import duty is availed subject to fulfilment of export obligation and a bond is executed to secure compliance, interest on the resulting duty liability is recoverable and cannot be defeated merely by pleading limitation.

---