Extension fee demand held illegal where payment was already made, with time extension directed prospectively.

Additional composition fee demanded for extending time to fulfil export obligation was found unsustainable where the petitioner had already paid the fee and the extension application had remained pending. The Court held that the respondent could not, after acting on the earlier extension order, impose a fresh and substantially enhanced demand by recomputing the fee, as the impugned demand was without jurisdiction and illegal. The respondent was bound to give effect to the payments already made without insisting on any further amount. Extension of time was directed prospectively from the date of the fresh order for six months.

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Issues: Whether the additional composition fee demanded for extension of time to fulfil the export obligation was legally sustainable, and whether the petitioner was entitled to extension of time prospectively on the basis of the fee already paid.

Analysis: The application for extension of time had remained pending, though the petitioner had already remitted the composition fee of Rs. 22,212/- and had again made the payment. The respondent could not, after having proceeded on the basis of the earlier order granting extension, impose a fresh and substantially enhanced demand under the guise of recomputing the fee. The impugned demand was held to be without jurisdiction and illegal. The Court also held that the extension had to be granted prospectively from the date of the fresh order, and the respondent was bound to act on the payments already made without insisting on any further amount.

Conclusion: The demand for additional composition fee was quashed, and the petitioner was held entitled to extension of time prospectively for six months from the date of the order to be passed by the second respondent.

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