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TMI Blog2024 (3) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant herein. It is axiomatic that when a person claims certain benefits on certain conditions and if that benefit is extended to a particular individual, he would have to fulfill his obligations on which basis the licence had been granted, or otherwise the executor can be penalised. In this case he had been granted a benefit of reduced customs duty on the promise of bringing in foreign exchange into the country. Since, it had not full filled its part of obligations, definitely it is liable to be penalised. The condition which the appellant counsel seek to be void on the basis of not being supported by any substantive provision would have to fall, since an execution of bond is contemplated under Rule 6 (2) (b) of Foreign Trade (Regulation) Rules 1993 and the reason for the execution of the bond is for the appellant to fulfill its obligation under the licence. Therefore, it is too farfetched for the appellant to content that the said condition would be a void condition. Thus, we are not inclined to interfere with the order passed by the learned Single Judge. In fine, this Writ Appeal fails and is accordingly, dismissed. - Honourable Mr. Justice R.Suresh Kumar And Honourable Mr. J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted, the appellant was not able to full fill its obligation under the licence. 5. In the interregnum, the Director of Revenue Intelligent, had issued a show cause notice calling upon the appellant to explain as to why the differential duty should not be demanded and as to why they should not be liable to charged with interest at 24% per annum, on the basis of the bond that had been executed. By an order dated 23.02.2000 the Commissioner of Customs had passed orders confiscating the goods imported. But however allowed them to be redeemed the same on payment of a fine of Rs. 11,58,000/-. The said authority had also confirmed the difference in duty, apart from imposing a penalty of Rs. 1,16,000/- in terms of section 11(a) of Customs Act, 1962, besides the demand of 24% interest per annum on the differential custom duty. Against which, a Statutory Appeal had been preferred before the Appellate Tribunal. The Appellate Tribunal, by its order dated 13.09.2002 had confirmed the demand of duty, but, however had set aside the confiscation and the penalty and also the demand of interest at 24%. 6. He would further submit that the second respondent herein by a notice dated 27.03.2002 had ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant had been granted licence to import machinery for the manufacture of air purifiers with a the condition that the appellant exports a quantified number of air purifiers manufactured by using the said machineries. Based upon the said licence issued to them, the appellant had imported the machineries and had availed the benefit of reduced customs duty. However the appellant had not exported even one air purifier, as obligated under the licence, even after the extended period. He would submit that while granting a licence, the appellant had executed an Indemnity cum Guarantee Bond in the year 1993, under which they were obligated to perform their export obligation and realise a free foreign exchange to an extent of USD 817520 within the period specified under the agreement. On failure to fulfill his obligations, they were obligated to pay an amount equal to 24% of interest per annum on the amount of duty saved from the date of import of first consignment till the date of payment. Admittedly, in this case, the appellant has not exported any materials bringing in any foreign exchange whatsoever. Hence, as per the Indemnity cum Guarantee Bond executed by the appellant, they are lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be applied to the facts of the present case, which had also been rightly done by the learned Single Judge. The learned counsel for the respondents would also contend that such a clause under the Indemnity cum Guarantee Bond invoked against the appellant even though is not backed by any statutory provisions, the appellant is bound by the Indemnity cum Guarantee bond and therefore, he would submit that there is no reason to interfere with the order passed by the learned Single Judge. 11. Mr.R.Imayavaramban, the learned counsel appearing for the Bank would submit that even in the writ petition they had filed an counter affidavit indicating that the amount had been with held by them only based on the interim order passed by the Court and they are willing to honor their commitment under the bank guarantee subject to the result of the Writ Petition. 12. We have considered the submissions made by the learned counsels appearing on either side and perused the materials available on record before this court. 13. From the facts that had been narrated by the respective counsels, the following facts are emerged. (a) The appellant had executed an indemnity cum guarantee bond towards the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an that it is a penalty which is quantified at 24% of interest on the duty saved. Therefore, the same cannot be equated to an interest that had been claimed by the customs authorities. 17. In that context, it would be useful to refer to the judgment of the Hon'ble Apex Court in the case of Rexnold Electronics and Controls Limited reported in 2008 (12) SCC 156 that had been referred to by the learned counsel for the appellant. A reading of the aforesaid judgment would indicate that the Hon'ble Apex Court, even in a case, where there is a claim by the Customs Department of 24% interest was held to be valid, as the Settlement Commission did not have the jurisdiction to waive an interest under the bond executed. The judgment relied upon by the appellant in India's Carbon Limited case cannot be said to be applicable to the facts of the present case for the simple reason, was that the demand therein was for a delayed payment of sales tax. The Hon'ble Apex Court had held that such a demand could not be made unless or otherwise it is supported by a substantive provision of law. Similarly, in the case of VVS Sugars relied upon by the learned counsel for the appellant, was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... execute a bond for complying with the terms and conditions of the (licence, certificate, scrip or any instrument bestowing financial or fiscal benefits). 21. Rule 6 deals with the conditions of licence, Sub Rule (2)(b) of the Rules mandates that an applicant for a licence should execute a bond for complying with the terms and conditions of the licence. The said Rule in clear terms mandates that an applicant for licence should execute a bond for complying with the terms and conditions of the licence. In compliance with the said Rule, the bond had to necessarily be executed by the appellant herein. It is axiomatic that when a person claims certain benefits on certain conditions and if that benefit is extended to a particular individual, he would have to fulfill his obligations on which basis the licence had been granted, or otherwise the executor can be penalised. 22. In this case he had been granted a benefit of reduced customs duty on the promise of bringing in foreign exchange into the country. Since, it had not full filled its part of obligations, definitely it is liable to be penalised. The condition which the appellant counsel seek to be void on the basis of not being supported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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