TaxTMI 
TaxTMI 
2005 (3) TMI 718
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.... 5A), Chennai Customs, directing the applicant to pay differential duty amount together with interest @ 24 per cent per annum, vide communication No. F. S45/67/94-Gr.VA dated 29-7-1998, within 15 days from the date of this communication. Applicant's case was admitted vide Admission Order No. 42/2004-Cus. dated 17-6-2004. 2. Shri B.N. Gururaj, Advocate, appeared for the applicant and Shri T.H. Rao, Deputy Commissioner, Chennai Customs House, Chennai, represented the Revenue. 3. Briefly narrating facts, the learned Advocate submitted that the applicant, under EPCG licence No. P/CG/2131150 dated 18-10-1993, imported capital goods vide Bill of Entry No. 4490 dated 2-2-1993 and saved considerable duty amount under Notification No....
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.... its IE code has been suspended by the DGFT, due to non-payment of interest. 6. Shri T.H. Rao, who appeared on behalf of Revenue, said that the orders on EPCG Scheme prior to May 1995 shows clearly that - "In case of failure to fulfil the export obligation, either in full or in part, within the stipulated period, the Indemnity-cum-Surety Bond shall be invoked and the bank guarantee shall be enforced. In addition, the licence holder shall also be liable to pay interest at the rate of 24% per annum on the amount of duty saved, from the date of import of the first consignment till the date of payment..........." However, he also pointed out that there is an amendment to the above EPCG Scheme vide Public Notice No. 9/2002-07 dated....
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....rcement of Bank guarantee and partly by cheque. 8. The crux of the applicant's argument praying for waiver of interest is on account of the fact that the Exemption Notification No. 160/92-Cus. dated 20-4-1992 does not provide for demand of interest, or its payment by the importer. The undertaking by the importer, referred to in condition (3) of the notification was only to "pay on demand an amount equal to the duty leviable on such capital goods but for the exemption". The provisions of the Customs Act 1962 also do not justify demanding interest as held by the Hon'ble Mumbai Bench of CEGAT in the case cited in para 4 above. The revenue representative, however, points out to the provisions of paragraph 45 of the Policy, and paragraph....
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....ained in the EXIM Policy, Notification etc. There is no dispute that as per the provisions contained in the EXIM Policy and by virtue of the legal undertaking as well as para 128 of the Handbook of Procedures 1992-1997, the defaulter is liable to pay the interest and the contrary conclusion by the Settlement Commission in so far as the conclusion regarding interest cannot be sustained. While disagreeing with the conclusion of the Settlement Commission with regard to interest in para 6(2), I hold that interest is chargeable as per provisions contained in the EXIM Policy." 10. In view of the foregoing, the Bench is not persuaded to grant immunity from interest. The Bench also observe that the interest rate has come down from 24 to 15 ....