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Issues involved: Whether Settlement Commission was justified in levying penalty and interest on customs duty u/s the Act.
The judgment addressed the question of whether the Settlement Commission was justified in levying penalty and interest on the customs duty settled at a specific amount. The petitioners had argued that without a specific provision under the Act, penalty and interest cannot be imposed. The Commission imposed a penalty and directed payment of interest without providing reasons. The petitioners had already paid the penalty and interest on the basic customs duty settled. The dispute centered around the Commission's jurisdiction to impose penalty and levy interest on customs duty other than the basic customs duty in the absence of explicit power under the Act. The Court observed that the Commission did not consider the petitioners' plea regarding the levy of penalty and interest. Consequently, the Court quashed and set aside the Commission's orders related to the imposition of penalty and interest on customs duty other than the basic customs duty. The matter was remanded back to the Commission for fresh consideration on these issues. The Commission was directed to pass new orders after hearing both parties expeditiously, preferably within three months. All contentions of both parties were kept open, and the rule was made absolute with no order as to costs.
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