Page 193 - ELT_1st August 2020_Vol 373_Part 3

2020 ] K. DHANDAPANI & CO. LTD. v. D.G.F.T., NEW DELHI 375

(iii) Mohandas Issardas And Ors. v. A.N. Sattananthan And Ors., AIR 1955
Bom 113 (1954) 56 BomMLR 1156.
25. It was further submitted that Notification No. 160/92-Cus., dated
20-4-1992 along with host of other Customs Notifications were amended by Noti-
fication No. 46/2013-Cus., dated 26-9-2013 capping the interest payable in case of
default to a maximum of the amount equivalent to the duty foregone at the time
of import. Similarly, a reference was also made to few other notification which
contain a clause for levy of interest and therefore the respondent cannot arrogate
upon themselves the power to either demand Customs duty or interest on the
asking duty forgone.
26. It is therefore submitted that the fact that the Central Government,
Ministry of Finance, Department of Revenue for the 1st time amended Notifica-
tion No. 160/92-Cus., dated 20-3-1990 (sic) along with other notification vide No-
tification No. 46/2013-Cus., dated 26-9-2013 shows that the respondents had no
power to levy and collect interest in the case of failure to discharge export obliga-
tion.
27. Per contra, the respective Learned Counsels for the respondent Nos.
1 to 3 in W.P. Nos. 38158 of 2003/W.P. No. 22282 of 2009 submitted that the For-
eign Trade (Development and Regulation) Act, 1962 and the rules made there-
under and the Export and Import Policy and the Handbook of Procedure and
customs Notifications constitute a complete code by themselves and therefore it
is not open for a manufacturer exporter like the petitioners availing the benefit of
the Export Promotion Capital Goods Scheme to violate the conditions of the li-
cense and the bond executed by them in terms of the Export and Import Policy
and question the power to demand interest by them. They therefore submit that
they are justified in demanding interest.
28. A license holder has to discharge export obligation under the Ex-
port and Import policy and in case such holder fails to discharge the export obli-
gation, the license cannot be redeemed and the holder was liable to pay interest
until they discharged the export obligation or till the date of payment of the cus-
toms duty on account of the failure to fulfill the export obligation and redeemed
the licence.
29. The Learned Counsel submitted that the Ministry of Commerce had
in fact issued Public Notices No. 22 (Re-2003)/2009-2014, dated 12-8-2013 to facil-
itate importers like the petitioners to regularise the default by capping the inter-
est payable to proportionate duty on the unfulfilled portion of the export obliga-
tion as a trade facilitation Notification No. 46/2013-Cus., dated 26-9-2013 was
also issued by Central Government under Section 25(1) of the Customs Act, 1962.
30. The respective Counsels for the respondent Nos. 1 to 3 in either of
the two writ petitions have further submitted that Rule 6(2)(b) of the Foreign
Trade Development (Regulation) Rules, 1993 as it stood during the relevant peri-
od stipulated that the goods covered under the license shall not be disposed of
except in accordance with the provisions of the Policy or in the manner specified
by the licensing authority in the license and that a licence was required to exe-
cute a bond for complying with the terms and conditions of the license.
31. Learned Counsel for the customs department relied upon the deci-
sion of the Honourable Supreme Court in Union of India v. Madras Steel-Re-Rollers
Association, 2012 (278) E.L.T. 584 (S.C.) to state that the officers of the Ministry of
Commerce are bound by the circular/public notices issued by the Department
and therefore the respondents were justified in demanding interest.
EXCISE LAW TIMES  1st August 2020  193