Contractual interest on export obligation default cannot be reduced without enabling authority, despite later public notice.

Interest payable under a bond for export obligation default is a contractual liability, and it remains enforceable despite settlement of the customs duty. A later public notice reducing the agreed rate to 15% for pending EO default cases was considered, but it did not give the Settlement Commission power to further reduce the interest or grant immunity from that liability. The existence of a different order in another matter did not alter the legal position where the bond obligation remained binding. The challenge to the 15% interest therefore failed, and the reduced rate was left undisturbed.

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Issues: Whether the interest awarded at 15% under the bond executed for export obligation default could be interfered with or reduced.

Analysis: The petitioner had settled the customs duty but remained liable for interest arising from the unfulfilled export obligation. The bond executed with the DGFT created a contractual liability to pay interest. The later public notice reducing the agreed rate from 24% to 15% for pending EO default cases was taken into account by the Settlement Commission. The subsequent circular did not confer any power to reduce the interest rate or grant immunity from such liability. The fact that a different Settlement Commission order had reduced interest in another matter did not alter the legal position where the bond obligation remained enforceable.

Conclusion: The challenge to interest at 15% failed, and no reduction to 10% was warranted. The issue is against the petitioner.

Final Conclusion: The petition was rejected, and the interest liability fixed by the Settlement Commission was left undisturbed.

Ratio Decidendi: Interest payable under a bond executed for export obligation default is a contractual liability, and in the absence of enabling authority the Settlement Commission cannot grant immunity from or reduce such interest.

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