Holding

Interest payable under the bond is not interest under the Customs Act, and the Settlement Commission therefore could not waive it; its direction to pay the interest was proper.

Summary

Rexnord Electronics & Control Ltd. obtained two Export Promotion Capital Goods licences requiring export of specified values within five years and furnished a bond undertaking to pay interest on any duty shortfall. The company failed to meet its export obligations, leading to demand notices for customs duty plus 15% interest. It applied to the Settlement Commission, which reduced the duty but directed payment of the interest and granted immunity from prosecution. Rexnord challenged the Commission’s direction to pay interest, arguing that the Commission could waive interest arising under the bond. The High Court dismissed the writ petitions and the company appealed. The Supreme Court held that interest payable under the bond is not "interest" within the meaning of the Customs Act, so the Settlement Commission lacked jurisdiction to waive it and correctly directed its payment. Consequently, the appeal was dismissed.

Issues considered

The nature of interest payable under the bond executed under the EPCG scheme: whether it falls within the definition of "interest" under Section 127H of the Customs Act, 1962.
Whether the Settlement Commission has jurisdiction to grant immunity or waive interest that is contractual in nature and not statutory under the Customs Act.

Legislation cited

Customs Act, 1962s. 127A, s. 127H, s. 28, s. 28AA
Foreign Trade (Development and Regulation) Act, 1992

Subjects

Export Promotion Capital Goods SchemeCustoms dutyInterest liabilitySettlement CommissionImmunity from prosecutionBond undertakingSection 127HExport obligation

Judgment

[2008] 3 S.C.R. 856

~

A REXNORD ELECTRONICS AND CONTROL LTD. r
II.
UNION OF INDIA & ORS.
(Civil Appeal No.1730 of 2008) .
MARCH 4, 2008
B
(S.B. SINHA AND V.S. SIRPURKAR, JJ.)
~

Customs Act, 1962; Ss. 28, 28AA & S. 127 r!w S.127H ' ---
and Notification dated April 20, 1992 issued thereunder:
c Export of goods - Licence under Export Promotion
Capital Goods Scheme for exporting goods up to certain CIF
values - Grant of immunity from prosecution and penalty in
terms of Notification subject to payment of interest in case
licenser failed to meet its export obligation - Demand Notice
D for payment of certain duty amount with interest - Application
f
for settlement of cases - Reducing the duty amount, Settlement I
Commission directed to pay the reduced duty amount with
interest - Jurisdiction of Settlement Commission in issuing
directions for payment of interest - Challenge to - Dismissed
E by High Court - Correctness of - Held: Correct - Since
licensee could not meet its obligation in terms of the Licence,
he is liable to pay the duty - On failure to make payment of
the duly, interest payable in terms of s.28AA of the Act, for
which proceedings has to be initiated under the provisions of /::

F the Act - Settlement Commission empowered to grant
immunity from payment of interest - Since the licensee in
question having evaded from payment of the duty, he was
bound to pay the same and also interest - Hence, Settlement
Commission did not commit any jurisdictional error in directing
payment of interest which is otherwise payable - Settlement
G
Commission - Jurisdiction of
Two licences have been issued to appellant-exporter
1.1 ~
by the authority under Export Promotion Capital Goods
(EPCG) Scheme for certain CIF value. Pursuant to the said
H. 856
/

REXNORD ELECTRONICS AND CONTROL LTD. v. 857
UNION OF INDIA & ORS.

"' licences, the ap'pellant was required to export goods of A
certain stipulated amount within a period of five years from
the date of issuance thereof. In order to avail certain benefit
under Notification dated April 20, 1992 issued by the
authority, the appellant was required to furnish a bond
and undertaking before an authority created under the B
Foreign Trade (Development and Regulation) Act, 1992.
Appellant had· furnished the bond. However, since it failed
to meet its export obligations in terms of the licences as
also the Scheme, the authorities issued a demand notice
for payment of certain amount as duty alongwith interest c
@ 15% per annum. Aggrieved, the appellant filed
applications before the Settlement Commission for
settlement of cases. Reducing the duty amount, the
Settlement Commission directed to pay the reduced duty
amount together with interest@ 15% per annum by giving
0
benefits of the Notification by granting immunity from
r prosecution and penalty to the appellant. Questioning the
direction of the Settlement Commission to the extent of
payment of interest, the appellant filed writ petitions which
were dismissed by the High ·court. Hence the present
appeal. E
Appellant-licensee contended that the order of the
Settlement .Commission was inconsistent/self-
.,. contradictory in so far as on the one hand payment of
interest under the bond could not have been held to be F
contractual in nature, and on the other, it will be subjected
• to any direction by the Court and that since interest
payable under the bond has a direct nexus with the
payment of excise duty, the Settlement Commission had
the requisite jurisdiction to waive the whole or a part of G
interest payable under the bond also.
Respondent submitted that the Settlement
- --• Commission had absolutely no jurisdiction in the matter.
Dismissing the appeal, the Court
H
858 . SUPR~ME COURT REPORTS [2008] 3 S.C.R

A HELD: 1.1 The Customs Act,' 1962 was enacted to fl

consolidate and amend the law relating to customs. On !'"

import of goods, customs duty is payable. The Central
Government, however, issued a Notification bearing
No.160/92-Cus. Dated 20th April, 1992 in terms whereof
B an undertaking was required to be furnished before the
Directorate General of Foreign Trade to claim benefit under
the Notification. (Para - 10) [861-C, DJ ( ,'

1.2 The appellant could not meet its obligations in '
terms of the undertaking. The customs duty, therefore,
c became payable. If customs duty is not paid, interest is
payable in terms of Section 28AA of the Act. For non-
payment of duty, the interest, a proceeding may be
initiated under Section 28 of the Act. (Paras - 11 & 12) ·
[862-B; 863-D]
D 2. With a view to enable the Settlement Commission
to pass an order, an applicant is required to make full and
true disclosur.e of his liability. In the event his application
,.
is accepted, an immunity is granted from prosecution of
any offence under the Act or under the Indian Penal Code
E or under any other Central Act for the time being in force
and also either wholly or in part from imposition of any
penalty, fine and interest under the said Act, with respect
to the cases covered by the settlement. The same has
nothing to do with payment of any interest under any other
!<'
F Act. If any interest became payable under the Act,
indisputably the Settlement Commission, will have the
requisite jurisdiction to grant immunity in respect thereof
either wholly or in part. All penalties, fine and interest, it
goes without saying, must, however, be enforceable
G under the Act. Hence, the High Court rightly held that
interest payable under the bond is not an interest payable
under the Act. (Paras - 17 & 20) [865-F, G, H; 866-A, B, C]
Commissioner of Customs (Port) vs. Settlement
it- -
Commission, Customs & Central Excise: 2005 (179)
H E.L.T.386 (Cal.) - approved.
REXNORD ELECTRONICS AND CONTROL LTD. v. 859
UNION OF INDIA & ORS. [S.B. SINHA, J.]
'ii
t 3. Appellant having evaded from payment of duty A
was bound to pay the same and furthermore was bound
to pay interest, in terms of the bond executed by it. The
Settlement Commission, therefore, could not have given
any direction for deduction in regard thereto. As the
Settlement Commission, did not have any jurisdiction to B
waive the amount of interest payable under the bond, no
\> jurisdictional error has been committed by it in directing
.L
the payment of the said amount which is otherwise
payable. In any event the appellant is not prejudiced
thereby as irrespective of such direction, the appellant c
was bound to pay the interest payable under the bond.
(Para - 24) [869-F, G; 870-A]
CfVILAPPELALTE JURISDICTION: Civil Appeal No. 1730
of 2008
D
'r From the final Judgment and Order dated 27.9.2006 of
i
the High Court of Judicature at Bombay in W.P. Nos. 6238 and
6242/2006.
Jay Savla, Reena Bagga and Meenakshi Ogra for the
Appellant. E
G.E. Vahanvati, S,G., Binu Tamta, Sparsh Bhargava, B.
Krishna Prasad and Sushil Kumar for the Respondents.
The Judgment of the Court was delivered by
" S.B. SINHA, J. 1. Leave granted. F
1
2. Interpretation of the provisions of Section 127A read
with Section 127H of the Customs Act is involved in this appeal
which arises out of a judgment and order dated 27th September,
2006 passed by the High Court of Judicature atBombay in W~it G
Petition Nos. 6238 and 6242 of 2006
3. Appellant herein is an exporter. It was issued two
·~ licences under Export Promotion Capital Goods (EPCG)
Scheme for CIF value of Rs.26,81,750/- and Rs.27,41,669/-
respectively. It imported capital goods against the H
860 SUPREME COURT REPORTS [2008] 3 S.C.R.

A aforementioned licences availing the benefit of the Notification "' #
dated 20th April, 1992. It presented bills of entry at Mumbai
Customs for there clearance. Pursuant to or in furtherance of
the said licences the appellant was required to export goods
worth US$ 3,40,000 and US $ 3,47,600 respectively within a
8 period of five years from the date of issuance thereof. Appellant,
however, could not meet its export liability and the value of the
~
exports made by it was to the extent of US $ 2, 79,210 and US$ ~

2,80,450.83 respectively. In terms of the aforementioned
Notification the appellant was required to furnish a bond and
c undertaking before the Director General of Foreign Trade, an
authority created under the Foreign Trade (Development and
Regulation) Act, 1992. Appellant had also undertaken to pay
interest on the differential amount.
4. On the appellant's failure to meet its export obligations
0 in terms of the said licen·ces as also the Scheme
'(
aforementioned, a demand notice was issued for payment of ~

duty of 6,03,400/- and Rs.4,30, 184/- respectively alongwith 15%
interest per annum payable to the Revenue from the date of
clearance of the capital goods till the date of payment of the
E duty demanded.
5. On receipt of the said notices, the appellant filed two
applications before the Settlement Commission for settlement
of its cases on 101h November, 2005 and 30th January, 2006.
By an order dated 29th June, 2006 the case of the appellant
,,
F was settled by the Settlement Commission with a direction to
pay the total duty amount of Rs.2, 16,610/- and Rs.3,41,493/- t
respectively together with interest @ 15% per annum while
granting immunity from prosecution and penalty to the appellant.

G 6. Questioning the direction of the Settlement Commission
to pay interest @ 15 % per annum, two writ petitions were filed
by the appellant before the Bombay High Court which, by reason
of the impugned judgment, have been dismissed. ~-
7. Mr. Jay Savla, learned counsel appearing on behalf of
H the appellant submitted that the order of the Settlement
REXNORD ELECTRONICS AND CONTROL LTD. v. 861
UNION OF INDIA & ORS. [S.S. SINHA, J.)
'a,
Commission was inconsistent/self-contradictory in so far as on A
• the one hand payment of interest under the bond could not have
been held to be contractual in nature and on the other, it will be
subjected to any direction by the Court.
8. Since interest payable under the bond, Mr. Savla, would
submit, have a direct nexus with the payment of excise duty, the B
Settlement Commission had the requisite jurisdiction to waive
~
;.
the whole or a part of interest payable under the bond also.
9. The learned Solicitor General, appearing on behalf of
the respondents, on the other hand, urged that having regard to c
the Scheme of Settlement, the Settlement Commission had
absolutely no jurisdiction in the matter.
10. The. Customs Act, 1962 (the Act) was enacted to
consolidate and amend the law relating to customs.
D
Indisputably on import of goods, customs duty is payable.
~
The Central Government, however, issued a Notification bearing
No.160/92-Cus. dated 20th April, 1992 in terms whereof an
undertaking was required to be furnished before the Directorate
General of Foreign Trade inter alia on the following terms :-
E
"(viii). That the payment of the amount demanded by the
government under this agreement will not affect the liability
of the party to any other action, including the initiation of
legal proceedings for confiscation of the imported material
'· and refusal of further licences, and all other liabilities, F
penalties and consequences under the provisions of the
• Foreign Trade (Development and Regulation) Act, 1992,
and the Orders and ~les made thereunder, that may be
decided by the Gove ·. ment.
(ix). That this agreement shall remain in full force until all G
the obligations of the party are fulfilled to the full and final
satisfaction of the government as specified above and till
such satisfaction is communicated to the party.
~
- (x) That the party irrevocably undertakes that in the event
H
862 SUPREME COURT REPORTS [2008] 3 S.C.R.

A of his default in meeting the aforesaid export obligation/ "
conditions, they shall pay an amount equal to 24% interest •
per annum on the amount of customs duties saved from
the date of import of the first consignment till the date of
payment."
B 11 ~ Indisputably the appellant could not meet its obligations
in terms of the said undertaking. The customs duty, therefore, 1
became payable. If customs duty is not paid, interest is payable '
in terms of Section 28AA of the Act, which reads thus :- ""'

c 28AA. Interest on delayed payment of duty:
Subject to the provisions contained in section 28AB where
a person, chargeable with the duty determined under sub-
section (2) of section 28, fails to pay such duty within three
months from the date 'of such determination, he shall pay
D in addition to the duty, interest at such rate not below ten
percent and not exceeding thirty percent. per annum, as 'f
is for the time being fixed by the Board, on such duty from
the date immediately after the expiry of the said period of
three months till the date of payment of such duty: Provided
E that where a person chargeable with duty determined
under sub-section (2) of section 28 before the date on
which the Finance Bill, 1995 receives the assent of the
President, fails to pay such duty within three months from
such date, then, such person shall be liable to pay interest
under this section from the date immediately after three "
F
months from such date, till the date of payment of such
duty. ...
Explanation 1. -Where the duty determined to be payable
is reduced by the Commissioner (Appeals), Appellate
G Tribunal or, as the case may be, the court, the date of such
determination shall be the date on which an amount of
duty is first determined to be payable.
Explanation 2. -Where the duty determined to be payable ·
is increased or further increased by the Commissioner
,.
H (Appeals). Appellate Tribunal or, as the case may be, the
REXNORD ELECTRONICS AND CONTROL LTD. v. 863
.., UNION OF INDIA & ORS. [S.B. SINHA, J.]
4
court, the date of such determination shall be.- A
(a) for the amount of duty first determined to be
payable, the date on which the duty is so determined;
(b) for the amount of increased duty, the date of order
by which the increased amount of duty is first B
~ determined to be payable;
;,
(c) for the amount of further increase of duty, the date
of order on which the duty is so further increased.
(2) The provisions of sub-section (1) shall not apply to c
cases where the duty or the interest becomes
payable or ought to be paid on and after the date on
which the Finance Bill, 2001 receives the assent of
the President."
~
1
12. For non-payment of duty, the interest, which would be D
payable in terms of Section 28AA of the Act, a proceeding may
be initiated under Section 28 of the Act.
13. Bond has been executed by the appellant in favour of
a different authority. In case interest is payable in terms of the E
said bond and not in terms of the statutory scheme, department
would not be.able to proceed in terms of Section 28 of the Act.
Interest in terms of the provisions of the Act would be payable if
the assessee or the importer fails to pay the amount of duty
determined to be payable within a period of three months.
F
14. The statutory scheme envisaged under the
aforementioned Notification dated. 201h April, 1992 is, however,
completely different.
15. Keeping in view the aforementioned back drop, we
may notice the provisions governing settlement of cases. G
Chapter XIVA of the Act provides for settlement of cases.
It was inserted by Finance Act, 1998 (Act 21 of 1998). Section
1278 of the Act provides for filing of an application for settlement
of cases wherein a full and true disclosure of the applicant's H
864 SUPREME COURT REPORTS [2008] 3 S.C.R.

A duty liability which had not been disclosed before the proper
officer, the manner in which such liability had been occurred,
the additional amount of customs duty accepted to be payable
by the applicant and such other particulars, as may be specified
by rules including the particulars of such dutiable goods in
8 respect of goods whereof the applicant admits short levy on
account of misclassification or otherwise of the goods before
the Settlement Commissioner to have his cases settled. The
procedures laid down therefor are required to be followed by
the Settlement Commission. In the event, the Settlement
c Commission accepts the said application and passes an order
thereupon, the applicant becomes entitled to immunity from
prosecution and penalty as laid down in Section 127H of the
said Act which reads as under:-
127H. Power of Settlement Commission to grant immunity
D from prosecution and penalty. - (1) The Settlement
Commission may, if it is satisfied that any person who
made the application for settlement under section 1278
has co-operated with the Settlement Commission in the
proceedings before it and has made a full and true
E disclosure of his duty liability, grant to such person, subject
to such conditions as it may think fit to impose, immunity
from prosecution for any offence under this Act or under
the Indian Penal Code (45 of 1860) or under any other
Central Act for the time being in force and also either
F wholly or in part from the imposition of any penalty, fine
and interest under this Act, with respect to the case covered
by the settlement:
Provided that no such immunity shall be granted by the
Settlement Commission in cases where the proceedings
G for the prosecution for any such offence have been
instituted before the date of receipt of the application under
section 1278.
(2) An immunity granted to a person under sub-section (1)
shall stand withdrawn if such person, fails to pay any sum
H
REXNORD ELECTRONICS AND CONTROL LTD. v. 865
UNION OF INDIA & ORS. [S.B. SINHA, J.]
•,
• specified in the order of the settlement passed under sub- A
section (7) of section 125fC within the time specified in
such order or within such further time as may be allowed
by the Settlement Commission, or fails to comply with any
· other condition subject to which the immunity was granted
and thereupon the provisions of this Act shall apply as if B
such immunity had not been granted .
•
~
(3) An immunity granted to a person under sub-section(1
)may, at any time, be withdrawn by the Settlement
Commission, if it is satisfied that such person had, in the
course of the settlement proceedings, concealed any c
particulars, material to the settlement or had given false
evidence, and thereupon such person may be tried for the
offence with respect to which the immunity was granted or
for any other offence of which he appears to have been
~
guilty in connection with the settlement and shall also D
r become liable to the imposition of any penalty under this
Act to which such person would have been liable, had no
such immunity been granted. "
16. The core question which, therefore, arises for
consideration is as to whether the term "interest" used therein E
would include within its fold interest payable under the bond
furnished by the appellant before the Director General of Foreign
Trade .
...
17. The statutory scheme for the purpose of approaching F
.., the Settlement Commission and the mode and manner in which
appropriate order is to be passed thereupon, are governed by
Chapter XIVA of the Act. With a view to enable the Settlement
Commission to pass an order, an applicant is required to make
a full and true disclosure of his liability. As noticed hereinbefore,
G
in the event his application is accepted, an immunity is granted
from prosecution of any offence under the Customs Act or under
" ~.~ the Indian Penal Code or under any other Central Act for the
time being in force and also either wholly or in part from imposition
of any penalty, fine and interest under the said Act, with respect
H
866 SUPREME COURT REPORTS [2008] 3 S.C.R.-
t
A to the cases covered by the settlement. The same has nothing ..
to do with payment of any interest under any other Act. If any
interest became payable under the Act, indisputably the
Settlement Commission, will have the requisite jurisdiction to
grant immunity in respect thereof either wholly or in part. All
B penalties, fine and interest, it goes without saying, must,
however, be enforceable under the Act. The Scheme for charging ~

interest under the Act has been noticed by us hereinbefore. No ......
other provision has been brought to our notice in terms whereof
interest is payable under the Act.
c 17. We, therefore, agree with the High Court that interest
payable under the bond is not an interest payable under the
Act.
18. Mr. Savla has drawn our attention to a decision of the
Bombay High Court in Pratibha Syntext Ltd. vs. Union of India
D
: 2003 (157) E.L.T. 13 141 (Born.). The fact involved therein is ~

not similar to the one before us. There, the Commission, apart '
from directing the petitioner therein to deposit the amount,
directed adjustment thereof from and out of the deposit made
by the petitioner during the course of investigation. While,
E however, granting immunity a direction to pay interest @ 10 %
on the amount of duty for not complying with the declaration given
as per the Exemption Notification No.204/92 dated 19-5-1992
was issued. A contention was raised therein that the Customs
~
Act does not make any provision for levy of interest on the duty
F amount payable in respect of goods cleared during the period
1994-1996. In was in the aforementioned situation, it was r-
held:-
16. Exemption Notification No. 204/92 issued under
G Section 25 of the Customs Act clearly provides that before
clearance of the imported goods, the petitioners shall
produce proof of having executed a bond or a legal
undertaking before the concerned Licensing Authority, for f'
,.
complying with conditions of the said Notification.
Therefore, the terms and conditions of bond and legal
H
REXNORD ELECTRONICS AND CONTROL LTD. v. 867
UNION OF INDIA & ORS. [S.B. SINHA, J.]
....

• undertaking executed before the Licensing authorities A
agreeing to pay customs duty with interest in case of
breach, became part and parcel of the conditions of the
exemption notification issued under Section 25 of the
Customs Act, 1962. Since, there was breach of the terms
of the Exemption Notification, the customs authorities were B
~
entitled to recover the duty with interest. Merely, because
;... the Commission erroneously or otherwise had not levied
interest in his order, it cannot be said that the Customs
authorities had no jurisdiction to recover interest. If the
petitioners were satisfied with the order of the c
Commissioner of Customs, there was no need for them to
approach the Settlement Commission. Once the
petitioners have voluntarily chosen the jurisdiction of the
entire issue by the Settlement Commission afresh, in the
light of the disclosure made by them it was open to the
D
~ Settlement Commission to direct the petitioners to pay
' the customs duty with interest. Although the Settlement
Commission has levied interest at a percentage, much ·
less than what was agreed to pay by the petitioners in
their bond and legal undertaking, the same being not an
issue in this petition, we are not expressing any opinion in E
that behalf. Therefore, we have no hesitation in holding
that once the petitioners committed breach of the terms of
the exemption Notification No. 204/92, the Customs
""
• authorities were entitled to enforce the declaration with
bond and legal· undertaking given by the petitioners and F
• recover customs duty with interest. If the customs
authorities were entitled to recover duty with interest then
no fault could be found with the Settlement Commission in
directing the petitioners to pay· customs duty with interest."
G
We are not concerned with such a case here.

.. 1
19. We may, however, notice that a learned Single Judge
of Calcutta High Court in Commissioner of Customs (Port) vs.
Settlement Commission, Customs & Central Excise : 2005
(179) E.L.T. 386 (Cal.) held :- H
868 SUPREME COURT REPORTS (2008] 3 S.C.R.

1(

A "21. As far as the third point is concerned I have carefully ,.
examined the provision of Section 127H of the Act and it
appears to me the power of the Settlement Commission
is relatable to waiver either partial or full amount of interest
under the Act only. In this case the importer was and is
B under obligation to pay interest not under the provision of
the Act, but under the bond at the rate of 24 per cent in
terms of exemption notification. I am of the view though _.._ ~
Bond furnished in terms of statutory decision, but then
contractual character is not destroyed. I am unable to
c comprehend how the learned Commission could overlook
the implication of bond in relation to payment of interest
thereunder. It seems to me it has wrongly equated payability
of interest under the bond with the expressed provision of
the said Act. Unlike Civil Court the waiver either of full or
of partial interest in contractual bargain cannot be granted
D
by the Commission without consent of both the parties. To ~
'i
clarify the position had it been a case of chargeability or
payability of interest under expressed provision of the Act
the Commission would have jurisdiction. This point once
was brought for decision before Bombay High Court in
E the case of Pratibha Syntex Ltd. v. Union of India (2003
(157) E.L.T. 141]. Their Lordships of the Division Bench
however did not deal with the same as the facts and
situation of the case did not warrant. In Paragraph 16 it
was observed by their Lordships as follows : JI
~

F
".............. although the Settlement Commission has
levied interest at a percentage, much less than what •
was agreed to pay by the petitioners in their bond
and legal undertaking, the same being not an issue
in this petition, we are not expressing any opinion in
G
that behalf."
Although the Calcutta High Court referred to Pratibha
Syntext Ltd. (supra), the distinct feature of the said case has ; '

not been noticed.
H
REXNORD ELECTRONICS AND CONTROL LTD. v. 869
UNION OF INDIA & ORS. [S.B. SINHA, J.]
•
-~
20. We agree with the Calcutta High Court that the power A
of the Settlement Commission is relatable to waiver of partial
or full amount of interest only under the Act.
· 21. We may notice that after the decision was rendered in
the instant case, the same Division Bench in Tanu
Healthcareltd. vs. Union oflndia: 2007 (207) E.L.T. 641 (Born.) B
• observed:-
"' "6. We had an occasion to refer to the Commerce Ministry
Circular dated 22nct May, 2003 in another matter which
came before us yesterday i.e. Writ Petition N0.6238 of c
2006 with Writ Petition N0.6242 of 2006 on the Appellate
side in the case of Rexford Electronics & Controls Ltd.
v. the Union of India & others. We noted that the apart from
the Commerce Ministry circular, as far as the bond given
by the party is concerned, there is a Judgment of the
• D
{ Calcutta High Court in the case of Commissioner of
Customs (Port) v. Settlement Commission, Customs and
Central Excise, reported in 2005 (179) E.L.T. 386 (Cal.).
The High Court has held that payment of interest under the
bond is a contractual obligation ahd the Settlement
Commission has no power to grant immunity to interest E
covered by such ,bonds."
22, A special leave petition filed thereagainst, being SLP
... (C) No. 3159 of 2007 has been dismissed by this Court by an
J
order dated 12th March,2007. F
~
23. We are, therefore, of the opinion that the there is no
infirmity in the impugned judgment.
24. Appellant having evaded from payment of duty was
bound to pay the same and furthermore was bound to pay G
interest in terms of the bond executed by it. The Settlement
Commission, therefore, could not have given any direction for
..l
deduction in regard thereto. As the Settlement Commission,
did not have any jurisdiction to waive the amount of interest
payable· under the bond, we do not see that any jurisdictional
H
870 SUPREME COURT REPORTS [2008] 3 S.C.R.

"'
A error has been committed by it in directing the payment of the i.

said amount which is otherwise payable. In any event the
appellant is not prejudiced thereby as irrespective of such
direction, the appellant was bound to pay the interest payable
under the bond.
B 25. For the reasons abovementioned, there is no merit in
these appeals, which are dismissed accordingly. Counsel fee
Rs.10,000/-.
S.K.S. Appeal dismissed.

'I'
.

r •