Page 189 - ELT_1st August 2020_Vol 373_Part 3

2020 ] K. DHANDAPANI & CO. LTD. v. D.G.F.T., NEW DELHI 371

involved and the bank guarantee shall be enforced. In addition, the licence
holder shall also be liable to pay interest at the rate of 24% per annum on
the amount of duty saved, from the date of import of the first consignment
till the date of payment. This shall be without prejudice to any other action
that may be taken under the Imports (Control) Order, 1955 and the Cus-
toms Act, 1962.
9. Para-45 of the said Policy reads as under :
A manufacturer-exporter shall be required to execute with the licensing au-
thority an indemnity-cum-guarantee bond, supported by a bank guarantee,
in the specified form for the value and period as mentioned in the licence.
However, after the manufacturer-exporter has fulfilled 50% of the export
obligation, the licensing authority may discharge the bank guarantee and
require the manufacturer-exporter to execute a Legal Undertaking (LUT)
for fulfillment of the remainder of the export obligation. The licensing au-
thority may exempt an Export House/Trading House/Star Trading House
from the requirement of furnishing an indemnity-cum-guarantee bond
supported by a bank guarantee and may allow it to execute instead a Legal
Undertaking (LUT).
In addition, the license holder was also liable to pay interest at 24% per an-
num on the amount of duty saved, from the date of import of the 1st con-
signment to the date of payment. This was without prejudice to any other
action that may be taken under the Imports (Control) Order, 1955 and the
Customs Act, 1962.
10. In addition, the license holder was also liable to pay interest at 24%
per annum on the amount of duty saved, from the date of import of the 1st con-
signment till the date of payment. This was without prejudice to any other action
that may be taken under the Imports (Control) Order, 1955 and the Customs Act,
1962.
11. It is the contention of the petitioners that the levy of Customs duty
and the interest thereon was under the provisions of the Customs Act, 1962 and
the notifications issued thereunder and therefore notwithstanding execution of
the bond in terms of paragraph 105 of the Handbook of Procedure, the respond-
ents functioning under the provisions of the Foreign Trade (Development and
Control) Act, 1992 have no powers either to collect and demand interest at 24%
or 15% as was done in the case of writ petitioner in WP. No. 38158 of 2003.
12. It is the contention of the Learned Counsel for the petitioners that
the authorities under the Foreign Trade (Development and Regulation) Act, 1992
do not have power to either collect Customs duty or levy interest. The officers
under the Ministry of Commerce are not empowered to demand interest even if
the respective petitioners have executed a bond and had undertaken to pay in-
terest at 24% in the event of failure to fulfill export obligation.
13. It is submitted that power to demand interest is substantive and
therefore in absence of a provision enabling the respondents to demand interest,
such bond cannot be enforced against the petitioners as the bond which has
signed was neither contemplated under the Export and Import Policy or under
the Foreign Trade (Development and Control) Act, 1992.
14. It is submitted that the Export & Import Policy of the Government,
Commerce Ministry merely lays down the broad scheme for granting of exemp-
tions under various schemes announced from time to time. The Central Govern-

EXCISE LAW TIMES  1st August 2020  189