RIVAA EXPORTS Vs. UNION OF INDIA

JUDGEMENT

(1.) THE short controversy raised before us in this petition is whether the Settlement Commission was justified in remanding the matter to the adjudicating authority by holding that the Settlement Commission has no power to grant immunity from the payment of interest covered by bond, and on the ground that as per the decision of the Calcutta High Court in Commissioner of Customs (Port) v. Settlement Commission Cus. and C. Ex. : 2005(179)ELT386(Cal) interest is payable against the contractual liability and once the applicant agreed under an agreement to pay interest, he has no legal right to claim waiver of the interest amount.

(2.) LEARNED Counsel submitted that in the present case only an undertaking has been given by the petitioner and there was no contractual obligation between the parties to pay interest. He further submitted that as per the terms and conditions of Notification No. 31/97 -Cus., dated 1 -4 -1997, which are adopted under the undertaking, payment of interest is a statutory liability and once the payment of interest under the terms and conditions of the Notification No. 31/97 becomes statutory in nature, bond also be treated as a part of the statute. Learned Counsel for the petitioner therefore, submitted that obligation under the contract is statutory in nature. He submits that this view has been supported by the decision of the Bombay High Court in the case of Pratibha Syntext Ltd. v. Union of India 2003 (157) E.L.T. 141 (Bom.). He further submitted that if notification itself not provides for any condition, such a condition cannot be imposed by subsequent circular. That view has been expressed by this Court in the case of Inter Continental (India) v. Union of India : 2003(154)ELT37(Guj) .

(3.) IT is also true that Notification No. 31/97 -Cus., dated 1 -4 -1997 has been issued in exercise of the powers conferred by Sub -section (1) of Section 25 of the Customs Act, 1962, wherein while exempting materials from the payment of Customs duty, in particular case a liability to pay interest has also been fixed in case the importer fails to discharge his obligation to export the goods under the Policy.