By TIOL News Service

NEW DELHI, NOV 13, 2016: THE DGFT imposed penalty of Rs.3,46,30,500/- for the reason that the export obligation period expired on 21st June, 2001 but the petitioner did not submitthe export details in the requisite manner supported with the bank certificate/documents towards fulfillment of export obligation. Inasmuch as the petitioner was treated as 100% defaulter in the fulfillment of export obligation.

The Appellate Authority dismissed the appeal. The Review Authority also rejected the plea of the petitioner.

Before the High Court, the petitioner inter alia submitted that the SCN dated 31st March, 2004 did not contain any proposal for levying penalty; that in view of the apex court decision in Hindustan Steel Limited = 2002-TIOL-148-SC-CT-LB the proceedings are in the nature of quasi criminal proceedings and penalty cannot ordinarily be imposed unless there is deliberate defiance of law or dishonest conduct.

The High Court, while dismissing the petition with costs of Rs.25,000/- payable to the respondents observed –

Cus - Court under Article 226 is not to distribute reliefs, to which the petitioner in accordance with law and Rules is not entitled to - Power under Article 226 is only to ensure that the authorities whose action is subject matter of judicial review, have acted in accordance with law - export effected by the petitioner prior to the date of issuance of Advance Licence cannot be considered in fulfillment of Export Obligation under the Advance Licence and, therefore, there was no error in the factual finding of the Statutory Authorities, of the petitioner having not fulfilled the Export Obligation -Petition dismissed with costs: High Court

We reported this order as 2016-TIOL-974-HC-DEL-CUS .

Aggrieved with the order of the Single Judge, the petitioner is before the Division Bench.

After noting that the appellate authority while dismissing the statutory appeal had passed a well-reasoned order after considering all the contentions advanced on behalf of the appellant, the High Court further observed –

++ Finding of fact recorded by the statutory authorities regarding the failure of the appellant to furnish the documents to establish the fulfillment of the export obligation warrants no interference by this Court in exercise of the writ jurisdiction under Article 226 of the Constitution of India.

++ The dispute was not with regard to the interpretation of clause 4.12 as to whether the exports that had taken place even before the grant of advance licence can be considered or not, but the issue was whether the appellant could produce authenticated documents to prove the fulfillment of export obligation as required under the terms and conditions of the advance licence. A categorical finding was recorded by the respondent Nos.1& 2 that the appellant/writ petitioner failed to produce. Therefore, the respondents cannot be said to have committed any error in imposing the penalty in exercise of the powers conferred by Section 11(2) of FTDR Act, 1992.

++ We do not find any substance even in the contention that the show cause notices being silent about the proposed levy of penalty, it is not open to the respondents to invoke Section 11(2) of FTDR Act, 1992. On a perusal of the show cause notices, we found that the petitioner was put on notice that it failed to submit the documents to prove the fulfillment of export obligation. It is also relevant to note that the show cause notice dated 01.12.2009 was in fact issued under Section 14 of the FTDR Act proposing to take action under Section 11(2) for non-fulfillment of export obligation against the advance licence dated 22.12.1999. Hence, the allegation that the show cause notices were silent about the action proposed has no factual basis.

Holding that the appeal is devoid of merit,the same was dismissed.

(See 2016-TIOL-2780-HC-DEL-CUS)