TMI Blog2010 (12) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... given by the Tribunal cannot be interfered with and therefore the first question of law is answered against the appellant. Whether the Tribunal is right in holding that interest on duty foregone under N/N. 169/1990 cannot be demanded since there is no provision in the Customs Act, 1962? - Whether the duty foregone would be only a duty when there is a failure to fulfil the conditions stipulated in the exemption notification? - Held that: - The notification prescribed various conditions for availing of benefits. However it is seen that there was no provision in the notification to levy interest on the duty. Though the learned counsel for the appellant referred sub-section 18(3) of the Customs Act and contended that the importer is liable to pay interest as per the rate fixed under section 28AB of the Act, the same is liable to be rejected in view of the judgment of the hon'ble Supreme Court in Commissioner of Customs (Import) v. Jagdish Cancer Research Centre [2001 (8) TMI 113 - SUPREME COURT OF INDIA]. Circular No. 5/1997-Customs, dated March 14, 1997, which postulates interest at the rate of 24 per cent. as specified in relevant notification is not applicable to this case as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed period. 3. As the first respondent did not fulfil the export obligations and exported only 1.5 per cent. of the goods, the machineries were detained. A show-cause notice was issued by the DRI and the case was adjudicated by the Commissioner, by an order dated September 26, 2000, who, (1) denied the benefits of Customs Notification No. 169/1990, dated April 30, 1990 and confirmed the demand duty of ₹ 62,79,249, (2) confiscated the goods under section 111(o) of the Customs Act, 1962 with an option to redeem the goods on payment of redemption fine of ₹ 6,30,000, (3) demanded interest at 24 per cent. per annum on the duty foregone from the date of clearance of the goods, (4) enforced a bank guarantee for ₹ 63 lakhs for appropriation towards duty, and (5) imposed penalty of ₹ 63,000 under section 112(a) of the Customs Act. 4. The importer challenged the order of the Commissioner before the Customs, Excise and Service Tax Appellate Tribunal, which upheld the differential duty liability on the goods payable to the Customs Department and set aside the order of confiscation thereby deleting the payment of redemption fine, penalty and interest by the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The Centre by Notification No. 16/2000, dated March 1, 2000 fixed the interest at 24 per cent. per annum and the importer is liable to pay interest as per the rate fixed under section 28AB of the Act. 8. He challenged the finding of the Customs, Excise and Service Tax Appellate Tribunal that there was no mens rea for imposing penalty and for confiscation. He submitted that when the importer failed to comply with the export obligations, it is deemed that there is default on the part of the exporter. 9. On the other hand Mr. S. Murugappan, the learned counsel appearing for the first respondent, supported the order of the Customs, Excise and Service Tax Appellate Tribunal stating that there is no provision either under Notification No. 169/1990 or under the Customs Act to levy interest. Moreover, he submitted that by virtue of Customs Notification No. 99/ 1994, dated March 1, 1994, 323 notifications including Customs Notification No. 169/1990 were rescinded. He relied upon the judgment of the hon'ble Supreme Court in India Carbon Ltd. v. State of Assam reported in [1997] Indlaws SC 2083 wherein it has been held that there cannot be any levy of interest on belated payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iberate attempt to avail of the benefits and concluded that there was no material to doubt about the first respondent's bona fides. Therefore, the Tribunal based on the aforesaid facts held that there was no mens rea and further held that the confiscation of goods and imposition of penalty is not sustainable. Hence, the finding of fact given by the Tribunal cannot be interfered with and therefore the first question of law is answered against the appellant. 11. The second and third questions of law are as follows:- Whether the Tribunal is right in holding that interest on duty foregone under Notification No. 169/1990 cannot be demanded since there is no provision in the Customs Act, 1962? Whether the duty foregone would be only a duty when there is a failure to fulfil the conditions stipulated in the exemption notification? The second and third substantial questions of law are concerned they are dealt with together. The first respondent availed of the benefit under Customs Notification No. 169/1990 and paid concession rate of duty at the rate of 25 per cent. ad valorem. The notification prescribed various conditions for availing of benefits. However it is seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cating officer before permitting the redemption of goods, firstly, to assess the market value of the goods and then to levy any duty or charge payable on such goods apart from the redemption fine that he intends to levy under sub-section (1) of that section.' In this view of the matter the objection raised by the centre that section 28 of the Customs Act would be attracted is not sustainable. 12. The notification only gives exemption whereas section 28(1) and 28AB deal with duty not levied, short-levied or erroneously refunded. Therefore the above sections would not applicable to the case in land. Hence the reliance of the learned counsel on Central Excise Notification No. 16/2000, which speaks about levy of interest under section 28AB of the Act is not sustainable. 13. Circular No. 5/1997-Customs, dated March 14, 1997, which postulates interest at the rate of 24 per cent. as specified in relevant notification is not applicable to this case as the said circular would be applicable prospectively from March 14, 1997 only. Mr. Ramakrishna Reddy, the learned counsel for the appellant, contended that Customs Notification No. 169/1990 was subsequently amended making provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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