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TMI Blog2005 (10) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date of issue of the said licences, by exporting the resultant products viz. Dyed/Dyed and printed polyester fabrics/sarees. The details of Grey Polyester Fabrics which were allowed to be imported to the extent of CIF value and quantity and the details of the resultant products which were required to be exported to the extent of FOB value and quantity to discharge the export obligation were specified in the said licences. The applicant had imported Grey Polyester Fabrics under 13 Advance Licences. The applicant discharged its export obligation in respect of 8 licences. It however, could not discharge its obligation in respect of 5 licences even after the licenses were revalidated granting extension of the export period by Jt. DGFT, Surat. 3. A Show Cause Notice vide F. No. ICD/Sachin/153/99-2000 dated 30-3-2005 was issued to the applicant demanding duty of Rs. 13,16,216/- besides invoking interest provisions under the Customs Act, 1962 (in short the Act) read with the relevant notification No. 31/97-Cus, dated 1-4-1997. The Show Cause Notice is pending adjudication. The applicant deposited the entire duty under protest on 30-3-2005 vide TR6 Challan. 4. The applicant file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to the interest liability. 8. The ld. Advocate for the applicant vide his letter dated 27-9-2005 submitted his written submissions. In support of his submissions he cited the following cases :- (i) Delta Paper Mills Ltd. v CCE, Guntur reported in 1995 (77) E.L.T. 544 (A.P.). (ii) Elel Hotels and Investment Ltd. v UOI reported in 1989 (3) SCC 698 (iii) Srinivasa Theatre and Ors etc. v. Govt. of Tamilnadu and Ors. Reported in 1992 (2) SCC 643 (iv) Subhash Photographics v. UOI reported in 1993 (66) E.L.T. 3 (S.C.) (v) UOI v. Jalyan Udyog reported in 1993 (68) E.L.T. 9 (S.C.) (vi) Commissioner of Income Tax, Jalpaiguri v. Om Prakash Mittal reported in 2005 (184) E.L.T. 3 (S.C.) (vii) ACC v. Commercial Tax Officer reported in AIR 1981 SC 1887 (viii) Commissioner of Customs (Sea Port), Chennai v. S.R.F. Ltd., reported in 2004 (164) E.L.T. 412 (Mad.). 9. Referring to the aforesaid cited case laws he inter alia made the following submissions :- (i) Levying of interest is one of the modes of recovery of tax or collection of tax to compel the assessee to pay the tax in time. In other words levy of interest is a part of collection of tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reason that the functions of the licensing authorities and the Customs authorities operate in different fields though they are at times interested so as to operate in same common area. (vii) The jurisdiction of Settlement Commission under the Income Tax Act is plenary in nature and is not controlled by any assessment. Though the Apex Court held that interest cannot be waived by the Income Tax Settlement Commission based on the express provisions of the Income Tax Act, the ratio that jurisdiction of settlement commission under the Income Tax Act is plenary will apply with equal force to the Honourable Commission under the Customs Act by virtue of the parallel provisions in Section 127C(7) corresponding to Section 245D interpreted in the Supreme Court s judgment. (viii) The Supreme Court judgment rendered in 2005 was not available to the Calcutta High Court on 23-8-2004. If the Commission is convinced that the interest should be waived in a particular case it has all the powers under the Act irrespective of the interest being under a notification or under Section 28 etc. (ix) Interest will be payable only if the imported inputs have not been used in export production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases :- (i) In Re : Bell Granito Ceramica Ltd. reported in 2001 (133) E.L.T. 495 (Sett. Comm.) (ii) Mahendra Petrochemicals Ltd.v. UOI Reported in 2004 (165) E.L.T. -499 (Guj.) (S.L.P. filed against this order has been dismissed by Supreme Court on merits as well as on time bar) 12. The ld. Advocate has pleaded that the decision of the Hon ble Calcutta High Court is per incurium. We find that none of the case laws cited by the ld. Advocate have dealt with the issue of contractual obligation to pay interest in terms of the bond entered into by an importer. The reliance placed by the ld. Advocate on Hon ble Madras High Court decision in the case of Commissioner of Customs (Sea Port), Chennai v. S.R.F. Ltd., is misplaced in as much as it has dealt with a notification which does not lay down any condition regarding payment of interest in case of failure to fulfill the export obligation. The relevant portion of the said judgment inter alia reads as below :- In so far as interest is concerned, the Settlement Commission by referring Notification 204/92-Cus., dated 19-5-1992, arrived at a conclusion that it does not lay down any condition requiring payment of interest in c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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