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TMI Blog2006 (5) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... CIF value of capital goods to be imported within 5 years from the date of issue of license. The license was for CIF value of Rs. 68,50,655/- and the applicant was under obligation for export worth US$ 8,68,546. The applicant (formerly known as Shreeji Analytical Lab. Ltd.) had executed a Bank Guarantee of Rs. 7,87,000/- with the zonal Jt. DGFT, New Delhi. The applicant imported capital goods vide Bills of Entry No. 2705, dated 28-3-1995, 5895 dated 20-3-1995, 5167 dated 28-3-1995 and 797 dated 4-4-1995. The subject goods were cleared claiming the benefit of exemption Notification No. 122/93-Cus., dated 14-5-1993 as amended. 2.2 A Demand Notice vide F.No. 20/1161/94/EPCG/IV/74, dated 6-4-2004 was issued to applicant by DGFT for failure to fulfill the Export obligation within the stipulated time limit directing the applicant (i) to get the duty saved amount certified from the respective Custom authority, (ii) to pay the duty saved amount on the unfulfilled portion of export obligation together with applicable rate of interest. 2.3 The applicant filed application for settlement before the Commission on 13-9-2005 under Section 127B of the Customs Act, 1962 (in short the Act) for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate it to the Bench with a copy to the applicant. 2.7 The Commissioner of Customs (EP), Air Cargo Complex, Mumbai vide his letter F.No. S/3-Misc-EPCG/539/2005 ACC, dated 29-12-2005 furnished his report under Section 127C(1) of the Act, wherein he reported that the duty liability calculated by the applicant by applying duty rate of 25% BCD + 10% CVD was not applicable to all the 4 Bills of Entry, because one Bill of Entry No. 2705 dated 6-2-1995 attracted BCD @ 40% and CVD @ 10%. As a result there is difference between the duty liability calculated by the applicant (at Rs. 11,60,402/-) and that by the department (at Rs. 11,91,899/-), the difference being Rs. 31,497/-. The exact calculation was indicated in Annexure-I to his letter mentioned above. 2.8 The case came up next for hearing on 4-1-2006. Shri V.M. Doiphode, Advocate was present on behalf of the applicant and Shri Birender Singh, Appraising officer, Commissionerate of Customs (EP), Air Cargo Complex, Mumbai represented the Revenue. The ld. Advocate for the applicant informed the Bench that as per the Admission Order the applicant has deposited the balance liability amounting to Rs. 3,73,402/- on 23-12-2005 vide Pay Orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported in 2005 (185) E.L.T. 253 (Tri.-LB). However, he conceded that interest was chargeable as per LUT given to the DGFT. But he sought immunity from interest for the period from 31-5-2002 when the Oriental Bank of Commerce, who had given the Guarantee Bond wrote to the DGFT to release the said bond in order to enable them to release the security. That since the DGFT did not respond to the Banker s letter, the applicant should not be made to pay for the DGFT s inaction. The ld. Advocate concluded by submitting that interest being chargeable as per LUT cannot be decided by the Commission, being not under the Customs Act and requested to keep it open to be decided by the DGFT. 2.11 The representative of the Revenue submitted that as per the entry register maintained by the Appraising officer, the date in the Bill of Entry is 6-2-1995 and it was assessed on 7-4-1995. However, he did not object to the benefit of Rs. 31,547/- to the applicant if the Bill of Entry was filed on 28-3-1995 after obtaining the license on 15-3-1995. After perusing the records the Bench gave the ruling that the date of the Bill of Entry No. 02705 being 28-3-1995, the duty liability calculated by the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to levy interest in this case. The second point raised by the ld. Advocate for the applicant was regarding its bankers letter dated 31-5-2002 to the DGFT, New Delhi requesting to return the guarantee bond to enable them to release the security held there against to the Customs department. He, therefore, reiterated his earlier submission during the earlier hearings that since the guarantee bond was not released by the DGFT the applicant should not be penalised by way of charging interest from this date (i.e., 31-5-2002). 4. The Bench asked the DGFT representative as to how much interest they would levy in this case. The representative submitted that as per Public Notice No. 9/2002-2007/22-5-2003, the rate of interest on the duties saved amount in EPCG cases shall be @ 15%. 5. The Bench has gone through the records and considered the submissions made on behalf of the applicant and the Revenue. There is no dispute about the fact of non fulfillment of export obligation by the applicant and the consequential duty liability arising therefrom. There is also no dispute now about the amount of duty liability as well as the rate of interest chargeable for the delayed payment of duty in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est was reduced from 24% to 15% p.a. vide Public Notice No. 9/2002-07, dated 22-5-2003 for all pending cases under the EPCG Scheme irrespective of the date of issuance. Hence the reduced rate of interest @ 15% will be chargeable. The interest shall be calculated by the Revenue (Commissioner of Customs (EP), Air Cargo Complex, Mumbai) within 15 days of date of receipt of the order and communicate it to the applicant, who shall deposit the same within the next 15 days under intimation to the Commission and the Revenue. With regard to the plea of the applicant that they should not be charged interest from 31-5-2002, the plea would have strength had the Bank Guarantee not expired on 17-3-2001. In fact the DGFT authorities have kept mum as to the whereabouts of the expired guarantee. Similarly it is not forthcoming from the applicant s side as to how the bank issued the pay order on 16-1-2006 after this Bench ordered encashment of the guarantee bond when the said bond had expired and the DGFT authorities had not released the said bond even till 16-1-2006; in fact it is not clear as to why the guaranteed amount in absence of the guarantee bond could not be released through an earlier pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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