2002 (4) TMI 302 - Commission - Customs

Issues Involved:
1. Duty demand and differential duty liability.
2. Admission and settlement of the case under Section 127B of the Customs Act, 1962.
3. Levy of interest on the differential duty.
4. Immunity from fine, penalty, and prosecution.

Detailed Analysis:

Issue 1: Duty Demand and Differential Duty Liability
The applicant was issued an EPCG import Licence with an export obligation to export PVC Rigid Foam Sheets worth US $ 26,54,490. The applicant imported machinery valued at Rs. 2,13,66,706/- under Notification No. 160/92, dated 20-4-1992, at a concessional rate of duty. The export obligation was not fulfilled within the prescribed period, leading to a Duty Demand Notice dated 4-1-2001, demanding differential duty of Rs. 19,63,325/-. The applicant admitted a duty liability of Rs. 19,12,579/- in their application to the Settlement Commission.

Issue 2: Admission and Settlement of the Case under Section 127B of the Customs Act, 1962
The applicant filed an application for settlement on 12-4-2001, admitting the duty liability of Rs. 19,12,579/-. The Commissioner of Customs confirmed the correct differential duty amount as Rs. 19,12,579/-. The Commission, in its Interim Order dated 12-7-2001, allowed the application to proceed under Section 127C(1) of the Customs Act, 1962, and permitted the applicant to pay the admitted liability in two instalments. The applicant complied by paying Rs. 10,62,544/- and providing a Bank Guarantee for Rs. 8,50,035/-, which was later encashed by the department.

Issue 3: Levy of Interest on the Differential Duty
The Commission examined whether interest was leviable on the differential duty. The applicant requested waiver of interest, citing similar cases and legal precedents. The Commission referred to previous decisions, including Tan India Ltd. v. Collector of Central Excise, Madras and Philips (India) Ltd. v. Commissioner of Customs, Mumbai, which held that interest could not be levied without statutory provision. The Commission concluded that interest was not leviable on the applicant as per the legal precedents and the absence of any statutory provision in Notification No. 160/92.

Issue 4: Immunity from Fine, Penalty, and Prosecution
The applicant sought immunity from fine, penalty, and prosecution under the Customs Act, the Indian Penal Code, and the Foreign Trade (Development and Regulation) Act, 1992. The Commission granted immunity from payment of any fine, penalty, and prosecution, provided the settlement was not obtained by fraud or misrepresentation of facts.

Findings/Conclusions:
The Commission reviewed the case records, submissions from the applicant and the Revenue, and relevant legal precedents. The Commission found that the applicant had complied with the payment of the admitted duty liability and that interest was not leviable. The Commission ordered the following terms of settlement:
1. The duty liability of Rs. 19,12,579/- was confirmed and already paid by the applicant.
2. The applicant was not liable to pay any interest.
3. Immunity from payment of any fine, penalty under the Customs Act, 1962.
4. Immunity from prosecution under the Customs Act, the Indian Penal Code, and the Foreign Trade (Development and Regulation) Act, 1992.
5. The order of settlement would be void if obtained by fraud or misrepresentation.

These terms concluded the settlement of the case under the provisions of the Customs Act, 1962.

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