AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 661
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....ce to the Assistant Commissioner of Customs or Deputy Commissioner of Customs a certificate from the licensing authority for having executed a bond under paragraph 45 of the Policy. 3. The term, "Licensing Authority", has been explained in the very same notification, which reads as follows:- "(iii)"Licensing Authority" means an authority competent to grant a licence under the Import (Control) Order, 1955, made under the Imports and Exports (Control) Act, 1947 (18 of 1947), or the Director General of Foreign Trade appointed under the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorised by him to grant a licence under the said Act." 4. The term, "Export and Import Policy" also has been explained in the same notification as follows:- "(ii)"Export and Import Policy" means the Export and Import Policy, 1 April 1992-31 March 1997 published vide Public Notice of the Government of India in the Ministry of Commerce, No.1-ITC (PN) 92-97, dated the 31st March 1992, as amended from time to time." 5. Yet another condition of the said notification is that the importer, at the time of clearance of the said capital goods shall make a declaration before th....
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....and I have also perused the records carefully. 9. The main contention of the learned counsel for the petitioner is that under the Customs Act, there is no provision for levying interest for failure to comply with the export obligation in terms of the licence. The learned counsel would further contend that in the Foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade (Regulation) Rules, 1993 also, there is no provision which empowers the second respondent to demand interest for the failure to comply with or fulfil the export obligation in terms of the licence. 10. The learned counsel for the petitioner would, however, admit that a bond was duly executed in terms of the licence, under which, the petitioner Company agreed to pay interest at the rate of 24%. But, the learned counsel for the petitioner would contend that such condition, which has been imposed in the bond, is wholly without jurisdiction for want of sanction of law and therefore, the same is void. In such view of the matter, according to the learned counsel, the demand of interest made on the condition, which is void, is illegal and therefore, the impugned order is liable to be set aside. 11. In ord....
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....gn Trade (Regulation) Rules, 1993. Under sub-rule (2)(b) of Rule 6 of the said Rules, the licensing authority has got power to demand execution of a bond by the applicant for complying with the terms and conditions of the licence. It is under this Rule, a bond was required to be executed by the petitioner and accordingly, the petitioner executed the bond. Therefore, according to the learned standing counsel, the execution of the bond incorporating the said clause for payment of interest cannot be stated to be void. For this proposition, the learned counsel relies on a judgment of the Hon'ble Supreme Court in Rexnord Electronics and Controls Limited vs. Union of India and others, reported in (2008) 12 Supreme Court Cases 156, wherein, the Hon'ble Supreme Court has held that the interest payable under the bond cannot be equated to the interest payable under the provisions of the Customs Act. The Hon'ble Supreme Court has further held that payment of interest under the bond is a contractual obligation and the Settlement Commission has no power to grant immunity to interest covered by such bonds. Eventually, the Hon'ble Supreme Court has held that such demand for payment of interest un....
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....ation) Act, 1992. The Rule 6(2)(b) of the Foreign Trade (Regulation) Rules, 1993, says that the applicant for a licence shall execute a bond for complying with the terms and conditions of the licence. It is only in exercise of the said power conferred under Rule 6(2)(b) of the Foreign Trade (Regulation) Rules, 1993, before issuing licence to the petitioner, the second respondent required the petitioner to execute a bond. It is only in terms of the said Rule, the bond was executed. Therefore, it cannot be stated at any stretch of imagination that the execution of the bond has got no sanction of law. I hold that the execution of the bond has a legal backing of the Foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade (Regulation) Rules, 1993. 18. Admittedly, at the time when the petitioner applied for licence, he was required to execute a bond and accordingly, he executed the bond, thereby, undertaking to pay interest at the rate of 24%, in the event of failure to fulfil the export obligation. Admittedly, the petitioner had failed to fulfil the export obligation, though, he had imported goods by using the licence. It is also admitted that he paid less duty in te....
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....cheme, the Hon'ble Supreme Court has held that the Settlement Commission had no power to waive the interest, which was required to be paid in terms of the bond executed. 20. While concluding so, the Hon'ble Supreme Court, in the said judgment i.e., Rexnord Electronics and Controls Limited vs. Union of India and others, reported in (2008) 12 Supreme Court Cases 156, had occasion to elaborately deal with the Scheme under the Foreign Trade (Development and Regulation) Act, 1992 and the customs duty payable under the Customs Act. In paragraph No.16 of the said judgment, the Hon'ble Supreme Court has framed the following question:- "16. The core question which, therefore, arises for consideration is as to whether the term "interest" used therein would include within its fold interest payable under the bond furnished by the appellant before the Director General of Foreign Trade." In paragraph No. 25 of the said judgment, the Hon'ble Supreme Court has held as follows:- "25. The appellant having evaded payment of duty was bound to pay the same and furthermore was bound to pay interest in terms of the bond executed by it. The Settlement Commission, therefore, could not have given any di....
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....stoms Act. The whole gamut of argument of the Customs Department before the Division Bench was that, as per the provisions of the Customs Act, interest could be demanded for the failure of the exporter to fulfil the licence conditions issued under the Foreign Trade (Development and Regulation) Act, 1992. The Division Bench, after having elaborately dealt with the provisions of the Customs Act, ultimately held that for such failure to fulfil the export obligation in terms of the licence, the customs authority has got no power to demand interest. Regarding that proposition laid down by the Division Bench, I am in full agreement. But, before the Division Bench, it was not at all argued that the demand of interest could be made by the authority under the Foreign Trade (Development and Regulation) Act, 1992, in terms of the bond, which is outside the purview of the Customs Act. 24. As I have already pointed out, in the instant case, interest is demanded not within the purview of the Customs Act, but, as per the terms of the bond executed in terms of the Foreign Trade (Development and Regulation) Act, 1992. Thus, the Division Bench had no occasion to consider, whether the authority unde....