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Commissioner of Customs (Exports), Chennai Versus Akbar Knitting Company

2015 (4) TMI 730 - CESTAT CHENNAI

Demand of interest - respondents admitted duty liability and contested only the interest - violation of conditions of DEEC Advance Licences - import of Polyurethane Spandex Yarn/Lykra - Notification No.204/92-Cus. dt. 19.5.92 - Held that:- Apex court in the order [2008 (3) TMI 8 - SUPREME COURT] has referred and considered the decision of Hon. Bombay High Court of Pratibha Syntex case; By virtue of above High Court and Supreme Court orders, the demand of interest for non-fulfilment of condition .....

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restored and the impugned order to the extent of giving relief on interest is set aside. - Following decision of Pratibha Syntext Ltd. Vs UOI [2003 (7) TMI 78 - HIGH COURT OF JUDICATURE AT BOMBAY] - Decided in favour of Revenue. - Appeal No. C/40582/2013 - Final Order No. 40373/2015 - Dated:- 10-4-2015 - Hon ble Shri R. Periasami,J. For the Appellant : Shri M. Rammohan Rao, DC (AR) For the Respondent : Shri Hari Radhakrishnan, Advocate ORDER Per R. Periasami Revenue filed appeal against Order-i .....

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00/-. The respondent's appeal was rejected by the Commissioner (Appeals) and on appeal before Tribunal, the case was remanded to the original authority vide Tribunal's Final Order No.1386-1387/2008 dt. 8.12.2008 for recomputation of duty and penalty. The adjudicating authority in the de novo proceedings vide order dt. 11.5.2013 re-worked out the shortage quantity and re-determined the duty of ₹ 3,44,210/- and also demanded interest @ 15% along with penalty. Respondent preferred an .....

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filled the condition as per the bond executed before the licensing authority. Part "G" of Part-I of the Annexure to the notification clearly stipulated a situation where the conditions of the notification are not complied, duty and interest has to be paid. At column No.5 of Part "G" clearly shows an amount of duty and interest paid by the licence holder. Therefore, the Commissioner (Appeals) erroneously held that there is no provision in the notification for demand of interes .....

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Syntext Ltd. Vs UOI 2003 (157) ELT 141 (Bom.) (3) Sheshank Sea Foods Pvt. Ltd. Vs UOI 1996 (88) ELT 626 (SC) (4) Delta Paper Mills Ltd. Vs CCE Guntur 1995 (77) ELT 544 (A.P.) 5. On the other hand, Ld. Advocate for the respondents reiterated the findings of the impugned order. He submits that Commissioner (Appeals) has rightly set aside the interest as there is no authority to recover interest. The words mentioned at clause (ii) (b) of the notification No.204/92 clearly says only demand amount e .....

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.- 2009 (237) ELT 419 (Tri.-Chennai) 6. I have carefully considered the submissions made by both sides. Revenue filed this appeal against impugned order wherein LAA set aside the interest demanded by the adjudicating authority. I find that the present appeal is second round of litigation. The respondent imported Polyurethane Spandex Yarn/Lykra under DEEC Advance Licences and cleared duty free under Customs Notification No.204/92-Cus. dt. 19.5.92. The DRI registered the case that the respondent f .....

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dicating authority had rightly confirmed customs duty and interest as the respondent failed to comply with the conditions of the notification as per bond executed. Part-G of Part-I of the Schedule annexed to the said notification clearly indicated duty and interest to be paid in respect of quantity of duty free materials when condition not complied. I find that when the adjudicating authority had discussed the issue of non-fulfilment of obligation in detail in the OIO, whereas LAA has not brough .....

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tions of Notfn.204/92 stands settled by the Hon'ble Apex Court and Hon'ble High Court of Bombay. In the case of Pratibha Syntext Ltd. Vs UOI (supra), the Hon'ble High Court of Bombay held that customs authorities are entitled to recover customs duty and interest for the breach of Notification No.204/92. The relevant portions of Hon'ble High Court's order is reproduced as under :- "16mption Notification No. 204/92 issued under Section 25 of the Customs Act clearly provide .....

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e Customs Act, 1962. Since, there was breach of the terms of the Exemption Notification, the customs authorities were entitled to recover the duty with interest. Merely, because the Commission erroneously or otherwise had not levied interest in his order, it cannot be said that the Customs authorities had no jurisdiction to recover interest. If the petitioners were satisfied with the order of the Commissioner of Customs, there was no need for them to approach the Settlement Commission. Once the .....

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inion in that behalf. Therefore, we have no hesitation in holding that once the petitioners committed breach of the terms of the exemption Notification No. 204/92, the Customs authorities were entitled to enforce the declaration with bond and legal undertaking given by the petitioners and recover customs duty with interest. If the customs authorities were entitled to recover duty with interest, then no fault could be found with the Settlement Commission in directing the petitioners to pay custom .....

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opportunity was required to be given to the petitioners. The admission of the petitioners would bind them. Therefore, recovery of duty liability and adjustment thereof with interest was well within the jurisdiction of the Settlement Commission. Such order cannot be said to be in breach of principles of natural justice as sought to be faintly canvassed by the learned Counsel for the petitioners. 23.The rival parties addressed us on extenso so far as the absence of substantive provision under the .....

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with interest as the bond prescribes recovery of duty with interest from the licence holder. So far as rate of interest determined by the Settlement Commission is concerned, the same cannot be said to be arbitrary looking to the prevailing bank rate on deposits. It is not in dispute that rate of interest awarded by the Settlement Commissions is much below rate prescribed in the bond. In the circumstances, no fault can be found with order of the Settlement Commission." The ratio of the abov .....

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est used therein would include within its fold interest payable under the bond furnished by the appellant before the Director General of Foreign Trade. 17. The statutory scheme for the purpose of approaching the Settlement Commission and the mode and manner in which appropriate order is to be passed thereupon, are governed by Chapter XIVA of the Act. With a view to enable the Settlement Commission to pass an order, an applicant is required to make a full and true disclosure of his liability. As .....

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