MAHENDRA PETROCHEMICALS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) By this petition, under Article 226 of the Constitution of India, the petitioner has challenged Misc. Order dated 16th May, 2005 bearing No. 2/CUS/2005 made by the Customs and Central Excise Settlement Commission, Mumbai (the Settlement Commission), whereby the immunities granted to the petitioner in terms of Section 127H of the Customs Act, 1962 (the Act) were withdrawn by exercise of powers under Section 127H(2) of the Act.

(2.) The petitioner approached the Settlement Commission in relation to dispute with the Director General of Foreign Trade. It is not necessary to refer to the interim proceedings that took place. Suffice it to state that on 19th October, 2004 the Settlement Commission passed Final Order No. 57/2004-Cus. setting the case by determining the liability of the petitioner at a sum of Rs. 73,09,326.80. While passing the final order the petitioner was granted immunity against imposition of penalty and fine. In relation to the liability to pay interest, the Settlement Commission fixed the rate of interest at 10% p.a. stating that in light of the true and full disclosure made by the petitioner as to its liability and the co-operation extended in finalizing the case, the said rate of interest would be appropriate. Accordingly, the liability to pay interest to the extent of Rs. 23,51,523/- arose on the day the Settlement Commission passed the final order.

(3.) The principal grievance of the petitioner is that on account of its weak financial position it was not possible for the petitioner to make payment of interest within the period of 30 days from the date of final order as directed and hence, as the petitioner could not comply with the directions made by the Settlement Commission, the petitioner applied for extension of time. On 8th February, 2005, the Settlement Commission informed the petitioner that extension was granted up to 31st March, 2005.