NITCO Ltd. And Anr. Vs Customs (Delhi High Court)
Summary: The Delhi High Court dismissed the writ petition filed by M/S NITCO Ltd. and another challenging Clause (e) of Paragraph No.51(ii) of the order dated 14.11.2019 passed by the Customs, Central Excise & Service Tax Settlement Commission, Principal Bench, New Delhi. The controversy was confined to the petitioners’ liability to pay interest on the amount determined pursuant to the Settlement Commission’s order. The proceedings arose from investigations by the Directorate of Revenue Intelligence concerning, inter alia, alleged misuse of EPCG Authorisations. In respect of one EPCG Authorisation issued by DGFT, New Delhi, a Show Cause Notice dated 18.06.2018 demanded duty of Rs.10,29,81,146/- along with interest. The Commissioner of Customs (Export), Mumbai Customs Zone-I adjudicated the SCN on 13.03.2019. Meanwhile, the petitioners approached the Settlement Commission, which by order dated 14.11.2019 settled the duty liability at Rs.6,69,57,333/-. After credit of Rs.1,41,49,366/- already paid, the balance duty liability was Rs.5,28,07,967/-. The petitioners themselves had quantified interest at Rs.1,10,04,634/-, while the Settlement Commission directed the jurisdictional Commissioner to verify and quantify the interest liability and intimate any further amount payable. The jurisdictional Commissioner subsequently recalculated interest at Rs.15,16,65,821/-.
The petitioners argued that the SCN dated 18.06.2018 was barred by limitation under Section 28 of the Customs Act, 1962. They contended that the relevant date under Clause (d) of Explanation 1 to Section 28 should be reckoned from 06.11.2006, when duty was paid, or alternatively from 2009, when the alleged short-payment and fraud came to the knowledge of DRI. The respondent relied upon the conclusiveness attached to a Settlement Commission order under Section 127J of the Customs Act, 1962 and contended that, having voluntarily chosen settlement rather than pursuing adjudication proceedings, the petitioners could not reopen the SCN forming the subject matter of that settlement.
