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2013 (9) TMI 661 - HC - CustomsExport Promotion Capital Goods Scheme - Export obligation - Levy of interest for failure to comply with the export obligation - Held that:- interest has not been demanded by the authorities under the Customs Act, in terms of any of the provisions of the Customs Act. On the contrary, interest has been demanded by the second respondent viz., Deputy Director General of Foreign Trade. There is no controversy before this Court that under the Foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade (Regulation) Rules, 1993, there is no specific provision empowering the second respondent to demand interest for the failure of the exporter to fulfil his export obligation. It is on this ground, the learned counsel for the petitioner contended that the demand for interest in terms of the bond is illegal - at the time when the petitioner applied for licence, he was required to execute a bond and accordingly, he executed the bond, thereby, undertaking to pay interest at the rate of 24%, in the event of failure to fulfil the export obligation. Admittedly, the petitioner had failed to fulfil the export obligation, though, he had imported goods by using the licence. It is also admitted that he paid less duty in terms of the licence by making use of the Scheme. When it is not in controversy that the petitioner had failed to fulfil the export obligation, then, the second respondent is entitled to enforce the terms of the bond. Interest payable as per the terms of the Customs Act is different from the interest payable under the bond executed in terms of the Foreign Trade (Development and Regulation) Act, 1992. If any interest is to be levied under the terms of the Customs Act, undoubtedly, the procedure contemplated under the Customs Act is to be followed by the customs authority to demand customs duty together with interest. But, under the Foreign Trade (Development and Regulation) Act, 1992, though, there is no specific provision for demanding interest in case of violation of terms and conditions of the licence issued under the Act, in terms of the bond such interest could be demanded - Decided against assessee.
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