2001 (11) TMI 85 - HC - Central Excise

Summary

Issues:
Challenge to demand letter issued by Deputy Commissioner of Customs regarding conversion of EPCG Licence from zero duty scheme to 15% duty scheme.

Analysis:
The petitioner sought the quashing of a demand letter dated 6-9-2000, issued by the Deputy Commissioner of Customs regarding the conversion of an EPCG Licence from a zero duty scheme to a 15% duty scheme. The letter stated that after the conversion, the petitioner was liable to pay 15% Basic Customs duty and Special Customs Duty/Surcharge on goods cleared under the EPCG Licence, along with interest at 24% from the date of clearance till the date of payment. The petitioner argued that the letter was adverse, but the court found that it was sent based on the petitioner's request for conversion. The court noted that the letter was a reminder for the petitioner to comply with the new terms following the conversion of the licence.

The court observed that the impugned letter was not an order or demand based on any adverse order against the petitioner. It emphasized that the conversion was done at the petitioner's request, and the letter merely outlined the consequences of the conversion in terms of duty payment. The court found no wrongdoing on the part of the authority in sending the letter to ensure compliance with the new terms post-conversion. Additionally, the court dismissed the relevance of certain notifications cited by the petitioner, stating that the challenge was specific to the single letter in question.

The petitioner contended that the letter's inclusion of interest charges was unauthorized under the Customs Act. However, the court refuted this argument, citing Sections 28 and 28AA of the Customs Act, which do allow for the charging of interest. The court deemed the argument meritless and highlighted that the provisions for interest charging were established by Act No. 22 of 1995. Ultimately, the court found the petition lacked merit and dismissed it in limine, considering it an abuse of the court process. The judgment concluded that the petition failed to establish a case worthy of admission.