2001 (3) TMI 322 - Commission - Central Excise

Summary

Issues Involved:

1. Validity of the duty demand notice.
2. Compliance with EPCG Scheme conditions.
3. Liability for interest on unpaid duty.
4. Immunities sought by the applicant.

Summary:

1. Validity of the Duty Demand Notice:
The applicant, Rajshri Plastiwood Ltd., was issued a Duty Demand Notice No. 5/40-SPL-121/94 IIA, dated 20-8-1998, by the Commissioner of Customs (Export Promotion) for Rs. 25,73,271/- plus interest @ 24% per annum, for failing to provide valid proof of fulfilling the export obligation under the EPCG Scheme.

2. Compliance with EPCG Scheme Conditions:
The applicant was issued an Import Licence No. P/CG/2131015, dated 15-9-1993, under the EPCG Scheme, permitting import of capital goods at a concessional duty rate of 15%, with an export obligation of PVC Rigid Foam Sheets worth US $ 2654490. The applicant imported capital goods under three Bills of Entry but only partially fulfilled the export obligation, leading to the duty demand notice.

3. Liability for Interest on Unpaid Duty:
The applicant contested the interest liability, arguing that Notification No. 160/92-Cus. did not provide for interest on unpaid duty. The Commission noted that the Notification No. 160/92-Cus. lacked provisions for interest, unlike Notification No. 49/2000-Cus. The Commission referred to judicial pronouncements, including Tan India Ltd. v. Collector of Central Excise, Madras, and Delta Paper Mills Ltd. v. Collector of Central Excise, Guntur, which held that interest cannot be levied without statutory provision.

4. Immunities Sought by the Applicant:
The applicant sought immunities from further customs/excise duty, interest, fines, penalties, and prosecution. The Commission, considering the applicant's cooperation and partial fulfillment of the export obligation, granted the following:
- Immunity from further customs/excise duty.
- Immunity from interest liability.
- Immunity from fines and penalties.
- Immunity from prosecution under the Customs Act, Indian Penal Code, and Foreign Trade (Development and Regulation) Act, 1992.

Findings/Conclusions:
The Commission concluded that the applicant's duty liability of Rs. 25,73,271/- was valid. The applicant had already paid Rs. 2,64,066/- and provided a Bank Guarantee for Rs. 21,00,000/-. The applicant was directed to pay the balance amount of Rs. 2,09,205/- within 30 days. The Commission found no statutory basis for the interest demand and granted the requested immunities, emphasizing the applicant's cooperation and the need for settlement to support the revival scheme under the Sick Industrial Companies Act.