Interest on EPCG imports requires express statutory authority; policy conditions and undertakings cannot by themselves justify recovery.

In EPCG imports under Notification No. 160/92-Cus., interest could not be demanded at 24% per annum because the notification then in force contained no express statutory clause authorising interest, and interest could not be inferred from policy documents, handbook conditions, circulars, or the importer's undertaking alone. A later notification introducing an interest provision confirmed the absence of such authority in the earlier regime. On settlement, the applicant's full and true disclosure, part payment of admitted duty, and bank guarantee for the balance satisfied the statutory requirements, so the duty liability was settled at the admitted figure and immunity from fine, penalty, and prosecution was granted for the settled matter.

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Issues: Whether, on the facts of the EPCG import, interest at 24% per annum could be demanded in the absence of a specific stipulation in Notification No. 160/92-Cus., and whether the settlement application could be allowed on the terms recorded by the Commission.

Analysis: The import was made under the EPCG scheme against Notification No. 160/92-Cus., which required production of the licensing authority's certificate and a declaration undertaking payment of duty leviable on the capital goods if the conditions were not complied with. The Commission noted that the notification, as it then stood, did not contain any express provision authorising recovery of interest, whereas later Notification No. 49/2000-Cus. introduced an interest clause. The Commission also relied on judicial authority holding that interest cannot be levied merely on the basis of circulars, policy documents, or contractual undertakings unless supported by statutory authority. On the settlement side, the applicant had made a full and true disclosure, paid part of the admitted duty, furnished bank guarantee for the balance, and the case was fit for settlement under the statutory scheme.

Conclusion: Interest was not payable to the Revenue. The duty liability was settled at the admitted figure, the applicant was granted immunity from fine and penalty and from prosecution for the settled matter, and the settlement application was allowed on the recorded terms.

Final Conclusion: The dispute was finally settled by directing payment of the remaining duty amount while rejecting the revenue claim for interest and extending the usual statutory immunities attached to settlement.

Ratio Decidendi: In the absence of an express statutory provision in the governing customs exemption notification, interest cannot be demanded merely on the basis of the import policy, handbook conditions, or an undertaking executed by the importer.

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