9911796707
|
Home
Issues involved: Challenge to order of Settlement Commission requiring payment of interest at 15%, reduction of interest rate to 10%, interpretation of relevant circulars and judgments regarding payment of interest under bond, and non-encashment of bank guarantee.
Challenge to order of Settlement Commission: The petitioner challenged the order of the Settlement Commission requiring payment of interest at 15% due to non-fulfillment of export obligation despite settlement of customs duty and grant of immunity from penalty and prosecution. The Commission justified the interest levy by referring to the bond executed with the DGFT and a subsequent reduction in interest rate to 15% as per a public notice. The petitioner sought reduction of interest to 10% based on a circular from another case. Interpretation of circulars and judgments: The petitioner relied on a circular from a Chennai case awarding interest at 10% to support the request for reduction in interest rate. However, the High Court noted a Commerce Ministry circular from 2003 and a judgment from the Calcutta High Court emphasizing that payment of interest under the bond is a contractual obligation, and the Settlement Commission cannot grant immunity to interest covered by such bonds. The High Court found no provision in the circular to reduce the interest rate. Non-encashment of bank guarantee: The petitioner argued that a bank guarantee was not encashed by the department, which could have been used to recover the amount secured. However, the High Court observed that the bank guarantee had expired earlier, rendering the argument unsubstantiated. Consequently, the petition was dismissed.
|
