2013 (1) TMI 643 - HC - Customs

False Telegraphic Release Advice (TRA) used for clearance of kerosene - demand of duty and penalties - Settlement Commission after petitioner surrendered the balance DEPB licence gave the benefit of settlement of the case by granting immunity from prosecution and penalty and the duty paid was acknowledged and discharged the petitioner from further payment of duty - Held that - This Court, sitting under Article 226, is not inclined to go into the merits of the discretion exercised by the Settlement Commission one way or other. The factum of full disclosure and co-operation is not the matter in dispute, but, as to what will be the interest that may be levied on the duty that has not been paid in time, is a matter for the Commission to decide from case to case. Further, as held in Union of India v. Ind-Swift Laboratories Ltd. 2011 (2) TMI 6 - SUPREME COURT the order of the Settlement Commission cannot be dissected and challenged only in respect of interest and accepting the rest. It is to be noticed that Revenue has lost substantially due to non-payment of duty at the time of import. In the result, this Court finds that the order of the Settlement Commission is a well-considered order based on the materials disclosed. The exercise of discretion with regard to interest alone does not require to be interfered with. Further, when the Revenue is entitled to interest in terms of Chapter XVI-A of the Customs Act as well, the levy of interest stands justified - writ petitions stand dismissed.

Summary

Issues:
Challenging Settlement Commission's orders on duty exemption passbook licenses (DEPB) for imported kerosene oil; Levying of interest by Settlement Commission; Discretionary powers of Settlement Commission in granting immunities.

Analysis:

1. Challenge to Settlement Commission's Orders:
The petitioner challenged the Settlement Commission's order, primarily contesting the levy of interest despite cooperating and discharging the duty liability as per the admission order. The petitioner sought total relief from the interest portion, citing a previous court order. The court noted the petitioner's cooperation and full disclosure but upheld the Settlement Commission's decision to impose interest, stating that the Commission's discretion in this matter should not be interfered with.

2. Levy of Interest by Settlement Commission:
The Settlement Commission imposed interest at 10% per annum on the duty liability settled by the petitioner. The petitioner argued against the levy of interest, relying on cases where total immunity from interest was granted. However, the court upheld the Settlement Commission's decision, emphasizing that the Commission has the discretion to impose interest based on the circumstances of each case. The court agreed with the respondent's counsel, supporting the Commission's decision to impose interest along with duty liabilities.

3. Discretionary Powers of Settlement Commission:
The court highlighted the discretionary powers of the Settlement Commission in accepting voluntary payment of duty and determining interest. It emphasized that the Commission's decision should not be dissected and challenged selectively, as observed in a Supreme Court judgment. The court held that the Commission's order was well-considered, and the exercise of discretion regarding interest did not warrant interference. Additionally, the court justified the levy of interest, considering the Revenue's loss due to non-payment of duty at the time of import.

In conclusion, the court dismissed the writ petitions, finding no merit in challenging the Settlement Commission's orders. The court upheld the Commission's decision to levy interest and emphasized the Commission's discretionary powers in settling duty liabilities and imposing interest. The judgment reaffirmed the Settlement Commission's authority to make decisions based on the circumstances of each case, without selective challenges to specific aspects of its orders.