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TMI Blog2006 (3) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter referred to as "M.J. Exports" or "the petitioner") imported 53 numbers of Haemodialysis Machines and accessories and spares under an Open General License (OG.L). They claimed exemption under exemption notification No. 208/81-cus for the import of the said machines. Admittedly the said machines after the import were exported by M.J. Exports to the erstwhile USSR. 4.The Customs Department issued a show cause notice dated 25th March, 1989 to M.J. Exports for exporting the machines outside the country without carrying out any process. On 6th April, 1993 another show-cause notice was issued to them under Section 124 of the Customs Act, 1962 for clearance of 53 numbers of Haemodialysis Machines and accessories and spares under an OGL by evading customs duty to the tune of Rs. 2,94,42,867/- and exporting the same to USSR without utilising the goods in India. 5.On 28th January, 1994, the Collector of Customs, Bombay after hearing M.J. Exports in response to the show cause notice under Section 124 of the Customs Act, 1962 passed an order that they were not entitled to exemption notification No. 208/82-cus dated 22nd September, 1981 and that the duty of customs amounting to Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- upto 30th April, 1995. The petitioner, accordingly, deposited a sum of Rs. 50,00,000/- with the Customs Authorities on 22nd April, 1995. When the matter further came up before the Delhi High Court after the notice was served on the Customs Department, by its order dated 12th May, 1995, the Delhi High Court disposed of the writ petition and modified the order of the CEGAT dated 26th October, 1994 by directing that in addition to the deposit of Rs. 50,00,000/- the petitioner shall also furnish bank guarantee in the sum of Rs. 50,00,000/- In other words, the conditional pre-deposit order passed by the tribunal on 26th October, 1994 stood modified by condition of pre-deposit of Rs. 50,00,000/- and also bank guarantee in the sum of Rs. 50,00,000/-. 9.The provision relating to delayed payment of duty was inserted in the Customs Act, 1962 by way of Section 28AA vide Act 22 of 1995. Section 28AA reads thus : "28AA. Interest on delayed payment of duty. - (1) Subject to the provisions contained in Section 28AB, where a person, chargeable with the duty determined under Sub-section (2) of Section 28, fails to pay such duty within three months from the date of such determination, he shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at CEGAT ultimately allowed the appeal and, therefore, there was no liability upon the petitioner to pay the duty until the order came to be passed by the Supreme Court on 14th August, 2001. The Counsel would submit that there was no failure to pay the duty within three months from the date Section 28AA came into force and, in these circumstances, the interest cannot be levied upon the petitioner under Section 28AA from 26th August, 1995. According to him, if at all it is leviable, it could only be from the expiry of three months of the order of the Supreme Court passed on 14th August, 2001. 11.On the other hand, Mr. A.J. Rana, the Senior Counsel argued that by the order of the Supreme Court passed on 14th August, 2001, the order of the Collector of Customs has been restored and thus, as on 28th January, 1994 M.J. Exports was liable to pay the duty of Rs. 2,94,42,687/- and since they failed to pay the said duty within three months of coming into force of Section 28AA, they are liable to pay interest under Section 28AA from the date immediately after three months from the date of coming into force of Section 28AA. 12.From the facts that we have narrated above, it is clear that b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Section 28AA by providing interest on/delayed payment for the first time gave an opportunity to a person chargeable of duty under sub-section 2 of Section 28 to discharge their liability of payment of duty within three months from the date of coming into force of Section 28AA. The proviso to Section 28AA is by way of concession to the defaulter to save payment of interest if the duty was paid within three months from the date the said provision came into force. If the defaulter failed to take advantage of such statutory concession and sought to wait until outcome of pending litigation arising out of chargeability of duty, he has to thank himself. 14.In our considered opinion, it has to be held that the petitioner was chargeable of duty determination under sub-section 2 of Section 28 on 21st August, 1994 (i.e. before the date on which Section 28AA came into force) and since they failed to pay such duty within three months from the date of coming into force of Section 28AA, they are liable to pay interest from 26th August, 1995. The demand of interest from the petitioner on unpaid duty from 26th August, 1995 cannot be said to be bad-in-law. Re : Question (two) 15.By the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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