FALCOM TEXTILES LTD Vs. COMMISSIONER OF CUSTOMS, AMRITSAR

JUDGEMENT

(1.) The petitioner has filed this writ petition under Articles 226/227 of the Constitution of India for partly quashing the order dated 8-2-2007 (Annexure P-4) passed by the Settlement Commission, Customs and Central Excise, New Delhi (hereinafter referred to as the Settlement Commission') to the extent of non-grant of immunity from interest to the petitioner while passing the order under Section 127C of the Customs Act, 1962 (hereinafter referred to as the Act'). By the aforesaid impugned order, the Settlement Commission while settling the duty liability of the petitioner at Rs. 13,47,839/- under Section 127C of the Act, on an application filed by the petitioner, has ordered that the petitioner shall pay interest @ 15% from the date the date of import of the first consignment till the date of payment. However, the petitioner has been granted immunity from penalty and prosecution.

(2.) The sole contention raised by the learned Counsel for the petitioner is that in the impugned order, the petitioner was not granted the immunity from payment of interest on the ground that the Settlement Commission has no jurisdiction to grant immunity from interest covered under a contractual obligation. Learned counsel for the petitioner while relying upon a judgment of the Calcutta High Court in M/s. Ceean Commerce Pvt. Ltd. and others V/s. Commissioner of Customs (Port) and others , decided on 30-8-2007 and a judgment of the Madras High Court in Writ Petition No. 18607 of 2005 and Writ Appeal No. 1193 of 2005 titled as M/s. SLS Exports Pvt. Ltd. V/s. The Customs and Central Excise Settlement Commissioner and others , decided on 8-9-2006, and while referring to the provisions of Section 127H of the Act, submitted that the Settlement Commission has jurisdiction/power to grant immunity from interest covered in a contractual obligation.

(3.) On the other hand, learned Counsel for the respondents submitted that under Section 127H of the Act, the Settlement Commission has the jurisdiction/power to grant immunity either wholly or in part from the imposition of any penalty, fine and interest under the Act, with respect to the case covered by the settlement. However, discretion lies with the Settlement Commission to grant immunity from interest either wholly or partly in respect of the case covered under the settlement. Learned Counsel submitted that once the petitioner voluntarily chosen the adjudication of the entire issue by the Settlement Commission and the Settlement Commission after hearing the petitioner settled the amount of duty and directed the petitioner to pay the said duty with interest, such an order should not be interfered in exercise of the writ jurisdiction. Learned Counsel submitted that in the present case the Settlement Commission has not denied the immunity from interest on the ground that the Settlement Commission has no jurisdiction/power to grant immunity from interest, but the same has been denied to the petitioner on the ground that the same was arising from contractual obligation and the petitioner itself had executed the bond to pay the interest @ 15% on the duty which it is liable to pay from the date of import of the first consignment till the date of payment. In support of his contention, learned Counsel for the respondents relied upon a Division Bench judgment of the Bombay High Court in Pratibha Syntext Ltd. V/s. Union of India, 2003 157 ELT 141(Bom.).