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TMI Blog2002 (4) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... and all were cleared at concessional rate of duty in terms of Notification No. 160/92, dated 20-4-1992. The export obligation could not be fulfilled by him within the prescribed export obligation period. The Dy. Commissioner of Customs, EPCG Group, New Custom House, Mumbai, therefore, issued Duty Demand Notice dated 4-1-2001 against B/E Nos. 2844, dated 7-4-1994 and 8905, dated 22-4-1994 demanding differential duty of Rs. 19,63,325/-. 3. The applicant filed an application on 12-4-2001 under Section 127B of the Customs Act, 1962 before the Additional Bench of Customs Central Excise Settlement Commission, Mumbai for the settlement of his case In his application, he disclosed and admitted duty liability of Rs. 19,12,579/-. 4. The Commissioner of Customs (EP), Mumbai vide report dated 4-7-2001 has submitted that on re-calculation of duty amount it was noticed that the differential duty amount reflected in the show cause notice was wrong. The correct differential duty amount is Rs. 19,12,579/- as admitted by the applicant. 5. The hearing for admission of the case was held on 10-7-2001. The Commission, vide Interim Order dated 12-7-2001, allowed the application to be proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble Commission on similar lines. He had nothing more to add. In response to a query made by the Commission regarding Philips India case, the Revenue informed that the case is coming up in the High Court for admission hearing on 19th April, 2002. FINDINGS/CONCLUSIONS 10. The Commission has gone through the case records, submissions made by the Applicant and the Advocate and the submissions made by the Revenue from time to time. The admitted facts of the case is that the Applicant have imported certain machinery at concessional rate on the EPCG Scheme. The Applicant was required to fulfill the export obligation under Notification No. 160/92, dated 20-4-1992. The Applicant has failed to fulfill the export obligation and accordingly the Duty Demand Notice dated 4-1-2001 was issued, inter alia, demanding the differential Customs duty leviable thereon amounting to Rs. 19,63,325/-. 11. The Applicant has filed an application before the Settlement Commission admitting a duty liability of Rs. 19,12,579/-. In Annexure-C to the Application, the applicant has made the following prayers : 1. The applicant prays that the case may be admitted following the ratio of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y statutory provision, the department cannot claim interest on delayed payment only on the basis of CBEC Circular. In the case of Delta Paper Mills Ltd. v. Collector of Central Excise, Guntur the Hon ble Andhra Pradesh High Court observed, inter alia, that levy of interest is a part of collection of taxes and, therefore, it is covered by the second limb of Article 265 of the Constitution of India and it should be by an authority of law. It was held that interest cannot be charged or levied by way of formal instruction under Rule 233 of the Central Excise Rules, 1944. Thereafter the Hon ble High Court has held as below : The payment of interest in case of default in payment of tax is a means of compelling an assessee to pay tax by a prescribed date. Interest is made payable on that amount of tax which ought to have been paid earlier, i.e., within the prescribed time or the specified period and which has not been paid; that interest is made payable because Government to that extent is deprived of the use of money which otherwise it could have got at an early point of time and that on the contrary, provision for payment of interest being a method for collecting or recovering its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaking required to be furnished by the importer and applying for a EPGC licence. This undertaking provides a clause that the importer shall pay full amount of Customs duty saved, and 24% interest thereon, for the total CIF value of imported goods from the date of import, in the event that the capital goods are not used for the purpose for which they were imported. There is clearly a conflict between what is contained in the undertaking and what is contained in the notification. The undertaking provides for recovery of proportionate duty, that is the duty other than full amount of customs duty saved. The meaning of the words occurring in the undertaking will only be that the duty is payable in case the export obligations is not completed has to be in proportion to the extent of shortfall in that export obligation. The notification, however, is clear that it is the entire duty that is to be paid. It requires the importer to pay duty leviable on such capital goods but for the exemption contained therein. That duty is obviously is the entire duty that has been exempted. As we have noted, there is no provision in the notification for recovery of interest, while there is no provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Reference Application will not render the decision of the Tribunal in-effective. Besides, the Commission has examined the laws laid down by various High Courts on the issue of levy of tax and interest without authority of law. Article 265 of the Constitution clearly stipulates that no tax can be levied without authority of law. Act, 265 : Taxes not to be imposed save by authority of law - No tax shall be levied or collected except by authority of law. 21. Accordingly, the Commission orders the following Terms of Settlement : TERMS OF SETTLEMENT 1. The duty liability of the applicants come to Rs. 19,12,579/- (Rupees Nineteen lakhs twelve thousand five hundred and seventy nine only). The applicant has paid the said amount in compliance with the Interim Order of the Settlement. Therefore, the Applicant is not liable to pay any further amount towards duty liability. 2. Inasmuch as the interest liability is concerned, for reasons discussed supra, the applicant is not liable to pay any interest to the Revenue. 3. The applicant is granted immunity from payment of any fine, penalty under the Customs Act, 1962. 4. The Applicant is granted immunity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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