TaxTMI 
TaxTMI 
2008 (3) TMI 8
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....00 and US $ 3,47,600 respectively within a period of five years from the date of issuance thereof. Appellant, however, could not meet its export liability and the value of the exports made by it was to the extent of US $ 2,79,210 and US $ 2,80,450.83 respectively. In terms of the aforementioned Notification the appellant was required to furnish a bond and undertaking before the Director General of Foreign Trade, an authority created under the Foreign Trade (Development and Regulation) Act, 1992. Appellant had also undertaken to pay interest on the differential amount. 4. On the appellant's failure to meet its export obligations in terms of the said licences as also the Scheme aforementioned, a demand notice was issued for payment of duty of 6,03,400/- and Rs.4,30,184/- respectively alongwith 15% interest per annum payable to the Revenue from the date of clearance of the capital goods till the date of payment of the duty demanded. 5. On receipt of the said notices, the appellant filed two applications before the Settlement Commission for settlement of its cases on 10^th November, 2005 and 30^th January, 2006. By an or....
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....the obligations of the party are fulfilled to the full and final satisfaction of the government as specified above and till such satisfaction is communicated to the party. (x) That the party irrevocably undertakes that in the event of his default in meeting the aforesaid export obligation/conditions, they shall pay an amount equal to 24% interest per annum on the amount of customs duties saved from the date of import of the first consignment till the date of payment." 11. Indisputably the appellant could not meet its obligations in terms of the said undertaking. The customs duty, therefore, became payable. If customs duty is not paid, interest is payable in terms of Section 28AA of the Act, which reads thus :- 28AA. Interest on delayed payment of duty: Subject to the provisions contained in section 28AB where a person, chargeable with the duty determined under sub-section (2) of section 28, fails to pay such duty within three months from the date of such determination, he shall pay in addition to the duty, interest at such rate not below ten percent and not exceeding thirty percent. &nb....
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.... scheme envisaged under the aforementioned Notification dated 20^th April, 1992 is, however, completely different. 15. Keeping in view the aforementioned back drop, we may notice the provisions governing settlement of cases. Chapter XIVA of the Act provides for settlement of cases. It was inserted by Finance Act, 1998 (Act 21 of 1998). Section 127B of the Act provides for filing of an application for settlement of cases wherein a full and true disclosure of the applicant's duty liability which had not been disclosed before the proper officer, the manner in which such liability had been occurred, the additional amount of customs duty accepted to be payable by the applicant and such other particulars, as may be specified by rules including the particulars of such dutiable goods in respect of goods whereof the applicant admits short levy on account of misclassification or otherwise of the goods before the Settlement Commissioner to have his cases settled. The procedures laid down therefor are required to be followed by the Settlement Commission. In the event, the Settlement Commission accepts the said application and passes an order thereupon, the a....
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.... therein would include within its fold interest payable under the bond furnished by the appellant before the Director General of Foreign Trade. 17. The statutory scheme for the purpose of approaching the Settlement Commission and the mode and manner in which appropriate order is to be passed thereupon, are governed by Chapter XIVA of the Act. With a view to enable the Settlement Commission to pass an order, an applicant is required to make a full and true disclosure of his liability. As noticed hereinbefore, in the event his application is accepted, an immunity is granted from prosecution of any offence under the Customs Act or under the Indian Penal Code or under any other Central Act for the time being in force and also either wholly or in part from imposition of any penalty, fine and interest under the said Act, with respect to the cases covered by the settlement. The same has nothing to do with payment of any interest under any other Act. If any interest became payable under the Act, indisputably the Settlement Commission, will have the requisite jurisdiction to grant immunity in respect thereof either wholly or in part. All penalties, fin....
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....oach the Settlement Commission. Once the petitioners have voluntarily chosen the jurisdiction of the entire issue by the Settlement Commission afresh, in the light of the disclosure made by them it was open to the Settlement Commission to direct the petitioners to pay the customs duty with interest. Although the Settlement Commission has levied interest at a percentage, much less than what was agreed to pay by the petitioners in their bond and legal undertaking, the same being not an issue in this petition, we are not expressing any opinion in that behalf. Therefore, we have no hesitation in holding that once the petitioners committed breach of the terms of the exemption Notification No. 204/92, the Customs authorities were entitled to enforce the declaration with bond and legal undertaking given by the petitioners and recover customs duty with interest. If the customs authorities were entitled to recover duty with interest then no fault could be found with the Settlement Commission in directing the petitioners to pay customs duty with interest." We are not concerned with such a case here. 19. We may, however, notice that a learned Single Judge of Calcutta High Court in Commi....