Home Case Index All Cases Customs Customs + HC Customs - 2022 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 624 - HC - CustomsRejection of request for waiver of interest while granting immunity from penalty and prosecution - order of Settlement Commission - Export Promotion Capital Goods Scheme - failure to fulfill the export obligation - HELD THAT:- The bond was an agreement which is between the Petitioner and the Commissioner of Customs representing the Excellency of President of India. Therefore merely because the said agreement refers to the payment of interest is applicable as per law, it does not mean that the payment of interest ceased to be under the agreement. Though the bond furnished by the Petitioner uses the phrase 'interest as applicable as per law', specifying the interest rate was superfluous in this case. Section 28AA of the Act, states that the interest should be at a such rate below 10% and not extending 36% per annum as per Central Government may by notification in the official gazette. By Notification dated 5 June 1995, amended with effect from 5 September 1995, the interest rate was prescribed and, therefore, was known. Thus, merely because in the case of Rexnord Electronics [2008 (3) TMI 8 - SUPREME COURT], the interest rate was specified, and in the present case, it is stated as applicable as per law, the law laid down in the case of Rexnord Electronics will not cease to apply to this case. Thus the liability of the Petitioner to pay interest in this case originated from the bond furnished by it and it was rightly held by the Settlement Commission as being contractual. The Commission has rendered the finding that liability of the Petitioner to pay interest was under the bond; therefore, Settlement Commission has no jurisdiction to waive interest liability . Impact of economic crisis / recession in East Asian countries - frustration of contract beyond the control of the petitioner - HELD THAT:- , the Commission held that the economic recession and financial crisis are not such an unique phenomena, and are generally anticipated by prudent businessmen. The Commission rightly observed that those in business are expected to be ready to overcome such a situation. Though the Petitioner had started the unit after two years or that had sought for cancellation of the bank guarantee will not be sufficient when the Petitioner failed to discharge his liability for a period of the license. The Commission has observed that the Petitioner derived substantial financial benefits at the cost of the exchequer for enjoying the amount saved on duty for almost a decade. Petition dismissed.
|