SUPER TEX LABELS Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) THE appellants M/s. Supertex Lebels Pvt. Ltd., Bangalore, imported capital goods under EPCG scheme on concessional rate of duty vide BE No. 00972, dated 14 -7 -1995 and 033681, dated 19 -7 -1995. Relevant notification under which the concessional rate of duty was claimed is 110/95 dated 5 -6 -1995. As per conditions of above notification, the appellants should have fulfilled the export obligation equivalent to 5 times the CIF value within a period of 5 years. Since the appellants could not fulfil the export obligation in terms of the Notification, the department initiated proceedings against them for the recovery of differential duty of Rs. 37,41,081/ - being the difference between the actual duty but for the notification and the duty paid under concessional rate. The Adjudicating authority after giving a personal hearing to the appellants confirmed the demand with interest at the rate of 24% as per condition No. 5 of Notification 110/95 -Cus., dated 5 -6 -1995. BG executed by the appellants for an amount of Rs. 37,41,081/ - was ordered to be enforced and adjusted towards duty payable. The total interest payable was arrived at as Rs. 50,55,072/ -. After adjusting the amount already paid by the importer, a balance amount of Rs. 15,73,770/ - was also demanded by the adjudicating authority. The appellant was not successful in their appeal before the Commissioner (Appeals). Hence they have come before this Tribunal strongly challenging the OIA.

(2.) SHRI Shrinivasa Murthy learned Consultant appeared for the appellants and Shri P.M. Saleem learned SDR appeared for the Revenue.

(3.) THE learned Advocate for the appellants submitted that Original Authority and the appellate authority have not interpreted the Notification No. 110/95 dated 5 -6 -1995 correctly. According to the appellants the department can not demand the entire duty leviable on the imported goods, when they had partially fulfilled the export obligation. They have also contended that the demand of interest is illegal inasmuch as interest liability was introduced in the Customs Notification 110/95 only on 18 -9 -1995 by amending Notification No. 146/95 and on the date of import, interest liability was not provided in the Notification. The learned SDR reiterated the contentions in the OIO and OIA.