By TIOL News Service

NEW DELHI, SEPT 20, 2017: ADMITTEDLY, RITES neither surrendered the Advance licence nor completed the export obligations.

In the circumstances, DGFT issued two show cause notices calling upon RITES to furnish the requisite documents pertaining to the respective advance licences.

RITES replied to the aforesaid notices stating that the advance licences had not been used and were misplaced. RITES further requested the DGFT to close the files. By letters dated 01.01.2010, the DGFT responded to the aforesaid reply and called upon RITES to furnish the utilisation report from the custom authorities within a period of 15 days. However, RITES did not respond to the said letters.

Thereafter, the DGFT sent letters dated 11.02.2010 once again calling upon RITES to submit the utilisation report from the relevant custom authorities within a period of 15 days, failing which the case would be adjudicated and fiscal penalty would be imposed on RITES. RITES did not respond to the said notice as well.

Since no satisfactory response was received from RITES, the DGFT, passed the impugned orders dated 05.04.2010 imposing penalty of Rs 13,36,225/- and Rs 14,57,700/- respectively for defaulting in fulfilment of its export obligations.

Copies of the said impugned orders were sent to RITES as well as its Directors .

According to RITES, it did not receive the impugned orders as they were sent to its erstwhile office address at New Delhi and RITES had since shifted to Gurgaon. RITES further claimed that it became aware of the impugned orders on 28.04.2015.

RITES paid the penalties and requested for closure of the case by letters dated 13.07.2015.

However, they did not take any further steps to assail the impugned orders.

More than a year after payment of the penalties, RITES filed Writ Petition(s) on 01.09.2016 challenging the order.

Interestingly, this was more than one and a half years after RITES had become aware of the impugned orders and more than a year after the DGFT had closed the cases. Incidentally, the DGFT files were closed at the request of RITES and since RITES had paid the penalties without any reservation.

Concededly, RITES had an alternate remedy to file an appeal against the impugned orders within a period of 45 days of receiving the orders in terms of Section 15 of the Foreign Trade (Development & Regulation) Act, 1992 . However, RITES did not avail of the statutory remedies.

The High Court after noting the above facts remarked –

"It is apparent from the above that present petitions are grossly delayed and have been filed to overcome the failure of not availing of the alternate remedies within the time specified."

[A.V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani: -  2002-TIOL-1055-SC-CUS-CB & State of Madhya Pradesh v. Bhailal Bhai: AIR 1964 SC 1006 refers]

The High Court further observed –

++ The impugned orders were passed more than six years prior to the filing of the present petitions. RITES neither responded to the said communication (of DGFT) nor participated in the proceedings despite being aware of the same.

++ The counsel for the respondents also pointed out that the impugned orders were sent to all directors of RITES. Thus, even if RITES did not receive the impugned orders at its office address, its Directors had, undisputedly, received the same.

++ However, RITES did not institute any proceedings to challenge the impugned orders. More importantly, on becoming aware of the impugned orders, RITES paid the penalties and requested for closure of the cases. The payments made by RITES were not under protest or with any reservation.

To the submission of the petitioner that the penalty was paid under duress as the DGFT had refused to accept the penalty under protest, the High Court quipped –

++ This Court is not persuaded to accept the aforesaid contention. RITES is Government of India Enterprise and not a hapless individual, who can be taken advantage of; it cannot be heard to canvas that it had made payments under duress . Further, even after the cases were closed, RITES did not take immediate steps to challenge the impugned orders and had approached this Court more than a year thereafter.

++ This Court does not find that any interference is warranted in these proceedings under Article 226 of the Constitution of India. The impugned orders are neither arbitrary nor unreasonable. Further, having failed to exercise the alternate remedy within the time prescribed, RITES cannot be permitted to circumvent the statutory procedure by filing petitions under Article 226 of the Constitution of India .

++ There is no plausible justification of the delay in assailing the impugned orders.

The petition was dismissed.

(See 2017-TIOL-1965-HC-DEL-CUS)