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of <h1>Tribunal rules in favor of appellant, denies interest recovery due to bond terms. Custom duty demand confirmed.</h1> <h3>M/s. Ion Exchange (India) Ltd. Versus Commissioner of Customs (Adjudication), Mumbai</h3> The tribunal ruled in favor of the appellant, dropping the demand for interest recovery based on the absence of specific terms in the bond, aligning with ... Recovery of interest - N/N. 36/97-Cus dated 11/4/1997 - though the appellant was required to execute the bond in respect of duty and interest thereon. However the appellant executed the bond only in respect of duty and there is no mention about interest in the said bond. Even the bond accepting authority has not raised any objection at the time of execution of the bond - Held that: - The identical issue has been decided by the Hon’ble Apex Court in case of Jayaswal Neco Ltd [2015 (8) TMI 243 - SUPREME COURT] wherein Hon’ble Apex Court held that when the bond does not contain the terms of payment of interest, recovery of interest cannot be made, despite there is a condition of executing the bond not only for the duty but also for the interest, in terms of notification - demand of interest set aside - the confirmation of demand and appropriation of amount of duty paid by the appellant are maintained - appeal allowed - decided in favor of appellant. Issues:1. Recovery of interest under the terms of a bond executed by the importer.Analysis:The appeal challenged an order confirming a custom duty demand and the recovery of interest under the terms of a bond executed by the importer. The appellant imported goods for a specific project financed by the World Bank, but it was later found that the World Bank had suspended and discontinued the financing. The appellant cleared the goods under a customs notification. The appellant did not contest the duty demand but challenged the recovery of interest, arguing that the bond was executed only for duty, not interest. The Ld. Commissioner ordered interest recovery based on the bond's terms. The appellant cited a Supreme Court case where interest recovery was denied due to the absence of such terms in the bond.2. Interpretation of bond terms for interest recovery.The Ld. Commissioner and the Revenue argued that interest recovery is permissible if it is a condition of the notification, citing a previous tribunal decision. The tribunal analyzed the bond executed by the appellant and noted that it only mentioned duty, not interest. The tribunal referred to the Supreme Court judgment where interest was denied due to the absence of specific terms in the bond. The tribunal distinguished the Revenue's cited case as it was different in terms of timing and conditions of bond execution.3. Application of legal precedent on interest recovery.The tribunal referenced the Supreme Court judgment, which involved a notification similar to the one in the present case. The court ruled that interest is payable only if specified in the bond. As the bond in this case did not mention interest, the tribunal dropped the demand for interest while upholding the duty payment. The tribunal concluded that the case was identical to the Supreme Court precedent, leading to the dismissal of the interest recovery demand.In conclusion, the tribunal ruled in favor of the appellant, dropping the demand for interest recovery based on the absence of specific terms in the bond, aligning with the legal precedent set by the Supreme Court. The confirmation of the custom duty demand and the appropriation of paid amounts were upheld, and the appeal was disposed of accordingly.
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