TMI Blog2021 (10) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... amount calculated under clauses 4.28 (i) and 4.23 (ii). A combined reading of clauses 4.28 (i), (ii) (iii) leads to the conclusion that the petitioner will have to pay interest also if it intends to regularise its default in terms of clause 4.28. From the facts as pleaded in the writ petition, it appears that the petitioner never applied for regularisation in terms of clause 4.28 of the Handbook of Procedures. Whether the delay in disposal of Ext.P1, should result in an order relieving the petitioner of the liability to pay interest as demanded in Ext.P11. Interest under the Customs Act is statutory? - HELD THAT:- The petitioner admittedly paid the amount due on account of failure to meet the export obligation only on 27-08-2013. The advance licence was issued in 2004 and the export obligation period was 18 months from the date of issue. Even accounting for the 6 months extension granted by the original authority, the period of export obligation would have expired in 2006. The petitioner was able to import materials without payment of customs duty only in terms of the advance licence. The petitioner, on failure to meet the export obligation, was required to pay customs duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that granted to the petitioner as is evident from a reading of Ext.P5 is that the petitioner may opt to get its case regularised in terms of para 4.28 of the Handbook of Procedures accompanying the policy. It appears that following the rejection of the review petition the petitioner paid the entire duty amount of ₹ 33,27,245/- on 27-082013 (evidenced by Ext.P8). Thereafter the petitioner was served with Ext.P9 notice requiring the petitioner to show cause as to why action should not be taken against it for failure to regularise the matter in terms of para 4.28 of the Handbook of Procedures as directed in the Minutes of the Policy Relaxation Committee which considered the review petition. The petitioner replied to the show cause notice through Ext.P10. It was informed that the duty amount had already been remitted and that the petitioner is waiting for information from the 4th respondent (the Commissioner of Customs) regarding any amount that is further payable. Possibly in response to this, the 4th respondent informed the petitioner that in addition to the duty amount of ₹ 33,27,245/- paid, an amount of ₹ 45,10,709/- is due as interest for the period up to 27-08-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject advance licence was effected by the petitioner. The Committee also noticed that the export obligation period had been extended up to 30-09-2008 at the request of the petitioner and even during this period no exports have been affected. It is, for this reason, the Committee felt after 9 years there was no reason to consider the request for extension of the export obligation period. It, therefore, directed that the petitioner could apply for regularisation under clause 4.28 of the Handbook of Procedures which has been issued in terms of para 4.24 of the Foreign Policy. A reading of para 4.28 of the Handbook of Procedures shows that the case of the petitioner is not covered under clause 4.28 (i) or 4.28 (ii). The case of the petitioner, on admitted facts, will fall under clause 4.28 (iii). Clause 4.28 deals with the situation where the export obligation has been fulfilled in value terms but there is a shortfall in the terms of quantity and clause 4.28 (ii) deals with the situation where the export obligation is fulfilled in quantity but there is a shortfall in value. Both situations contemplated by clauses 4.28 (i) and 4.28 (ii) provide separate methods for calculation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in the year 2006. The petitioner has paid the customs duty only in the year 2013. The petitioner could have opted to remit customs duty under protest. It did not do so. It waited for the result on Ext.P1 application for review and thus enjoyed the benefit of money payable to the Customs Department on account of its default. Interest, it is well settled, is compensation for money retained. Therefore, the petitioner cannot claim any exemption from the payment of interest. I must also note that on account of the interim order in W.P (C) No.8990/2008 , even the invocation of the bank guarantee was interdicted. Though the petitioner complains of unreasonable delay in the disposal of Ext.P.1 review petition, it did not attempt to get an order from this Court in W.P (C) No.8990/2008 to have the review petition heard. It continued to enjoy the interim order until the matter was finally disposed of, through Ext.P.2 judgment dated 8.2.2013. A similar question arose for consideration Voltas Ltd. v. State of A.P., (2004) 11 SCC 569 , and it was held: - 15. Reliance was placed upon the case of J.K. Synthetics Ltd. v. CTO [(1994) 4 SCC 276] wherein the question was whether an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shown in the return. Therefore, so long as the assessee pays the tax which according to him is due on the basis of information supplied in the return filed by him, there would be no default on his part to meet his statutory obligation under Section 7 of the Act and, therefore, it would be difficult to hold that the tax payable by him is not paid to visit him with the liability to pay interest under clause (a) of Section 11-B. It would be a different matter if the return is not approved by the authority but that is not the case here. It is difficult on the plain language of the section to hold that the law envisages the assessee to predicate the final assessment and expect him to pay the tax on that basis to avoid the liability to pay interest. That would be asking him to do the near impossible. 16. It was submitted that this authority shows that a liberal interpretation had to be given and that the assessee should not be made liable for interest amounts. In our view this authority is against the appellants. This authority shows that the tax becomes due on the date the returns are filed. In J.K. Synthetics case [(1994) 4 SCC 276] the assessee had paid the tax which the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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