2013 (1) TMI 641 - HC - Customs

Advance license - Non-supply of quantity of goods as indicated in the licence - waiver of interest - Held that - Looking at the Scheme, it is a Quantity/Value Based Duty Exemption Entitlement Certificate and not with reference to quantum of foreign exchange earned. Therefore, so far as this concession, irrespective of earning foreign exchange, shortage of supply of goods would come in the way of appellant and the claim in question cannot be accepted. License ending with No.906 - Held that - Once the exporter gets the benefit on the import of goods, having earned the benefit, it is not open to say that there is violation of obligation under the licence. Therefore, the Settlement Commission was justified in rejecting both claims. Waiver of interest as contemplated under Section 127(h), either wholly or in part, a benefit can be extended to the licensee in respect of penalty, fine and interest prior to the amendment in accordance with the procedure applicable at the relevant point of time and not in accordance with the existing Section 127(h). So far as payment of 50% of the impugned demand as indicated in the judgment of the learned Single Judge, the time up to 28.02.2013 extended.

Issues:
1. Benefit of making a representation with regard to waiver of interest alone.
2. Dispute over final order of Settlement Commission pertaining to advance licenses of Export and Import.
3. Interpretation of obligations under advance licenses.
4. Justifiability of rejecting claims by Settlement Commission.
5. Extending benefit of waiver of interest under Section 127(h) and payment deadline extension.

Issue 1: Benefit of making a representation with regard to waiver of interest alone.

The appellant challenged the judgment of the Single Judge, seeking the benefit of making a representation for waiver of interest only, not the other relief sought in the writ petition.

Issue 2: Dispute over final order of Settlement Commission pertaining to advance licenses of Export and Import.

The Settlement Commission passed a final order concerning four advance licenses, leading to a controversy regarding two specific license numbers. The appellant argued that the Commission unjustly found fault with the appellant regarding the non-supply of the quantity of goods specified in the license, emphasizing that the obligation was Quantity/Value based, not solely dependent on foreign exchange earned. The Court held that the shortage of supply of goods could impede the appellant's claim based on the terms and conditions outlined in the advance licenses.

Issue 3: Interpretation of obligations under advance licenses.

Regarding another license, the Court noted that once an exporter benefits from importing certain goods with duty exemption, they cannot claim inadequacy or deficit in supply due to the buyer's non-payment. The Court ruled that having already benefited from the import, the exporter cannot allege a violation of obligations under the license, supporting the Settlement Commission's decision to reject both claims.

Issue 4: Justifiability of rejecting claims by Settlement Commission.

The Settlement Commission's decision to reject the appellant's claims was upheld by the Court, emphasizing that the obligations under the licenses must be adhered to, and benefits obtained from imports cannot be used to excuse shortcomings in fulfilling obligations.

Issue 5: Extending benefit of waiver of interest under Section 127(h) and payment deadline extension.

The Court clarified that the benefit of waiver of interest under Section 127(h) could be extended to the licensee in respect of penalty, fine, and interest prior to the relevant amendment. Additionally, the Court extended the payment deadline up to a specified date, deviating from the Single Judge's decision, thereby offering some relief to the appellant.

In conclusion, the Writ Appeal was disposed of in accordance with the detailed analysis provided for each issue, addressing the appellant's concerns and upholding the Settlement Commission's decisions while providing some relief in terms of interest waiver and payment deadline extension.

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