2006 (11) TMI 431 - AT - Customs

Summary

Issues:
1. Waiver of pre-deposit amount of interest under Section 129E of the Customs Act, 1962.
2. Time-barred demand of duty.
3. Applicability of Section 28AB of the Customs Act for demanding interest.
4. Jurisdiction of authorities in cases of contractual obligations for interest payment.

Analysis:
1. The case involved an application for waiver of pre-deposit amount of interest under Section 129E of the Customs Act, 1962, concerning a confirmed duty amount of Rs. 13,16,216/- for non-fulfillment of export obligation. The applicant had paid the duty under protest before adjudication of the show cause notice. Previous proceedings before the Settlement Commission and the High Court of Gujarat were detailed, leading to the appeal for waiver of pre-deposit.

2. The contention was raised regarding the time-barred demand of duty, arguing that the show cause notice issued beyond five years from the relevant date was invalid. The timeline of bill entries and the issuance of the notice were scrutinized to determine the validity of the demand.

3. Another issue was the invocation of Section 28AB of the Customs Act for demanding interest, with conflicting views between the authorities. The order-in-original confirmed the duty and levied interest under Section 28AB, while the Ld. Commissioner (Appeals) held that Section 28AB was wrongly invoked. The plea of time bar under Section 28 of the Customs Act was also discussed.

4. The jurisdiction of authorities in cases involving contractual obligations for interest payment was debated. It was argued that if a party had a contractual obligation to pay interest, the authorities had no jurisdiction to adjudicate the case, suggesting that only a civil suit would be appropriate. The argument regarding the authority's role in such cases was a focal point of the discussion.

In the final judgment, considering the contentions presented and the early payment of the duty amount, the tribunal found in favor of the appellant. The tribunal concluded that the appellant had prima facie established a case and that the balance of convenience favored them. Consequently, the pre-deposit amount of interest was waived, and a stay was granted on its recovery pending the appeal's disposal. The decision was pronounced on 24-11-2006.