2006 (6) TMI 335 - Commission - Customs

Summary

Issues:
Settlement of duty liability under Customs Act, 1962 for non-fulfillment of export obligation, calculation discrepancies between applicant and authorities, grant of immunities from interest, penalty, and prosecution.

Analysis:
1. The case involved an application for settlement filed by a company engaged in manufacturing instrument cooling fans, regarding a Demand Notice issued for non-fulfillment of export obligation under an EPCG Licence.

2. The applicant admitted a duty liability of Rs. 2,16,610, citing discrepancies in duty demanded due to incomplete utilization of the license and partial export obligation fulfillment.

3. The Commission allowed the case to proceed, directing the applicant to deposit the admitted duty liability within 30 days.

4. Subsequent hearings revealed conflicting reports from the DGFT and Customs regarding the extent of export obligation fulfillment and the corresponding duty liability.

5. The Bench noted the lack of clear reports from the DGFT and Customs, leading to delays and inconclusive information for settlement.

6. Despite the discrepancies, the Commission settled the duty liability at Rs. 2,16,610, already paid by the applicant.

7. Regarding interest, the Commission held that the applicant is liable to pay interest at 15% per annum as prescribed under the Bond, reducing the rate retrospectively from the due date till payment.

8. Immunity from penalty and prosecution was granted to the applicant, citing contractual obligations and statutory limitations on the Commission's power to grant interest immunity.

9. The settlement order would be void if obtained through fraud or misrepresentation, as per the Act's provisions.

10. The decision highlighted the importance of accurate reporting and timely compliance by all parties involved for effective settlement under the Customs Act, emphasizing the legal obligations and consequences of the settlement terms.