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TMI Blog2006 (6) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case are that the applicant is engaged in the manufacture of instrument cooling fans. The applicant was issued an EPCG Licence No. P/CG/2133445, dated 6-9-1994 for CIF value of Rs. 26,81,750/- with export obligation of US $-3,40,000 which was to be completed within a period of 5 years from the date of issue of the licence. The applicant was thus entitled to import capital goods under concessional rate of duty at 15% under Customs Notification No. 160/92-Cus., dated 20-4-1992. The applicant had executed a Legal Undertaking (LUT) for the same with the Director General of Foreign Trade (DGFT) with the condition that in the event of default in meeting the export obligation it will pay interest @ 24% on the duty saved from the date of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was yet to receive any communication from the Revenue regarding correctness of the Customs duty admitted. He further reiterated that the difference between the duty demanded and the duty admitted is on account of the fact that the applicant had fulfilled partial export obligation to the extent of 58.75%. None appeared on behalf of the DGFT although a notice was sent to them. The representative of the Revenue (Customs) submitted that they were unable to certify the correctness of the Customs duty as no communication was received by them from the DGFT regarding fulfilment of the export obligation claimed by the applicant. After hearing both sides the Bench vide Interim Order No. 31/CUS/2006, dated 31-3-2006 directed the DGFT and the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m vide letter dated 27-4-2006. 10. The representative of the Revenue (Customs) also could not give any quantification of the duty liability stating that the applicant had not given the correct set of documents to them and so also the DGFT s letter is made available to them today only i.e., on 4-5-2006. 11. After hearing both sides the Bench vide Interim Order No. 37/CUS/2006, dated 8-5-2006 noted that prima facie the calculations submitted by the DGFT were not correct and gave inter alia the following directions to be complied with by the DGFT, New Delhi, the applicant and the Revenue :- (i) The DGFT, New Delhi should submit a detailed report furnishing shipping bill wise particulars showing the percentage of export obligation fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from DGFT in the matter. However no report has been received by this department from DGFT till date, despite reminding telephonically to DGFT, Mumbai several times to persue the matter. Regarding repon on the basis of photocopies of documents submitted by the importer against EPCG Lic. No. P/CG/2133445, dt. 6-9-1994, on scrutiny of records it appear that importer had utilized the abovesaid EPCG Lic. for the CIF Value of USD 74,000. On the basis of this they had to export the goods worth USD 296,000. Besides importer was also to maintain annual average export performance of USD 105264. However they could export goods worth 270210 only in the first year of EO period. After setting aside the requisite average export performance of USD 10526 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms) strongly contended that interest would be leviable in the case as the applicant had entered into a bond committing to pay interest in case of default in fulfilment of export obligation. Further referring to the decision of the Hon ble Calcutta High Court in Commissioner of Customs (Ports) v. Settlement Commission, Cus. C. Ex. reported in 2005 (179) E.L.T. 386 (Cal.) he submitted that the Commission is statutorily not empowered to grant immunity from interest to the applicant. As far as immunity from penalty and prosecution is concerned the representative left it to the discretion of the Bench. The representative of the DGFT endorsed the contentions raised by the Revenue (Customs) in opposing the grant of immunities to the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts that the applicant s claim is not correct, the applicant would stand to loose the immunities, granted by the Commission as the order of settlement would be void in terms of sub-section (9) of Section 127C of the Act. Accordingly, the Bench, lays down the following terms and conditions under Section 127C(7) of the Act for settlement of this case :- Customs duty : The Customs duty in the case is settled at Rs. 2,16,610/-. This amount already stands paid. Interest : The Hon ble Calcutta High Court in the case of Commissioner of Customs (Port) v. Settlement Commission, Customs and Central Excise reported in 2005 (179) E.L.T. 386 (Cal.) have held that payment of interest under a bond is a contractual obligation and the Settlement Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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