Cus - There is nothing subsisting to suspend or cancel, about DEPB which has lost its validity, for it is no longer DEPB but piece of paper of no worth: High Court
By TIOL News Service
CHANDIGARH, SEPT 16, 2016: THE petitioner exported a consignment of hand tools under the Duty Entitlement Pass Book Scheme vide shipping bill No. 002216 dated 30.03.2000.
Based on the Bank Certificate of Export Realization petitioner applied to the DGFT and were issued a common DEPB of Rs.9,30,515/- on 25.8.2000.
The DGFT issued a SCN dated 20.10.2003 proposing to impose penalty under Section 11(2) of the FTDR Act, 1992 alleging that the petitioner in connivance with the custom officials had got ante-dated copy of shipping bill. The specific allegation was that the material was actually exported on 04.04.2000 whereas the shipping bill mentions the date as 30.03.2000; that the petitioner got the shipping bill ante-dated to avoid the value cap which came into effect w.e.f. 01.04.2000. The petitioner was actually entitled to benefit of Rs.1,00,980/- instead of the Rs.2,72,752/- availed. Later on, through a corrigendum dated 05.07.2004, it was also proposed to cancel their DEPB ab initio.
Pursuant thereto, the DEPB was cancelled by the Jt. Director, DGFT and a penalty of Rs.2,00,000/-was imposed.
The appeal was dismissed, hence the Writ Petition.
The High Court, inter alia, observed -
+ As is clear from a reading of Para 7.14 (of the Export and Import Policy, 1997-2002) the objective of Duty Entitlement Pass Book Scheme is to neutralise the incidence of customs duty on the import content of the export product. The neutralisation is to be provided by way of grant of duty credit against the export product.
+ As per Para 7.15 of the Export Import Policy, the DEPB shall be valid for a period of 12 months from the date of issue. The DEPB in this case was issued on 25.8.2000. Thus, it remained valid only till 24.8.2001. The show cause notice for imposition of penalty u/s 11(2) of the 1992 Act was issued on 20.10.2003. Thereafter another show cause notice- cum-corrigendum was issued on 5.7.2004 proposing to cancel the DEPB ab initio. It was thereafter that the order dated 30.11.2004 was passed cancelling the DEPB imposing penalty of Rs. 2,00,000/- on the petitioner. All these actions are after the expiry of the period of validity of the DEPB.
+ Obviously, for something (in this case the DEPB) to be cancelled or suspended, it should be existing or subsisting. It is incongruous to cancel or suspend something that has ceased to exist. Obviously there is nothing subsisting to suspend or cancel, about a DEPB which has lost its validity, for it is no longer a DEPB but a piece of paper of no worth.
+ Once the period of validity of the DEPB has expired no action to cancel or withdraw it can be taken because then there is no ‘DEPB' in existence to be cancelled and on which the cancellation order can operate. Cancellation of DEPB in such a situation is a meaningless order and can have no consequence.
+ Moreover, in Section 9(4) there is no power to cancel or suspend the licence retrospectively.It is well settled that no action taken under a statute can have retrospective effect in the absence of a specific provision in the statute conferring such power.
+ There being no provision in Section 9(4) to cancel the licence with retrospective effect, it has to be held that the DEPB could not have been cancelled ab initio from the date of issue.
+ The order of cancellation of the DEPB being illegal and without jurisdiction, the penalty imposed being a consequence thereof also cannot sustain.
The writ petition was allowed.
(See 2016-TIOL-2140-HC-P&H-CUS)
