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2017 (3) TMI 218 - HC - CustomsSEZ unit - Imposition of penalty u/s 11 (2) of the Foreign Trade (Development & Regulation) Act, 1992 - Proceedings initiated 3 years after the assessee was wounded up - violation of the conditions of the Letter of Approval (LoA) - petitioner was given LoA on 10.02.2008 for manufacture of 'gold bangles and pendants' within MEPZ-SEZ, Chennai. On the basis of such approval, the petitioner firm continued to manufacture 'gold medallions' and exported the same. Subsequently, since the Government withdrawn the income tax concessions hitherto conferred to the persons like the petitioner who carry out the manufacturing activities inside MEPZ-SEZ, on and from 31.03.2012, the export activities carried on by the petitioner have come to a close - whether the petitioner has violated the terms and conditions of the LoA and whether the commodity 'medallion' and 'pendant' are one and the same? Held that: - the Dictionary meaning of the word 'Pendant' and 'Medallion' can be considered. While pendant is termed as a piece of jewellery that hangs from a necklace chain, medallion is also termed as a piece of jewellery in the shape of a medal worn as pendant. Therefore, it is clear that there is no distinction or difference between the meaning given to the commodities 'pendant' and 'medallion'. The handbook of procedure only prescribes norms for value addition. As per clause 4A 2 and 2.1 of the Handbook of Procedure relied on by the respondent, the wastage norms and value addition norms relates to plain jewellery to have a maximum wastage of 3.5% while in the case of medallions it is permitted upto 0.25%. When the petitioner has admittedly achieved 7% of value addition, even the invocation of the guidelines contained in the handbook of procedure will not confer any jurisdiction to the respondent to impose the penalty on the petitioner. These aspects have not been taken note of by the respondent while passing the impugned order imposing penalty on the petitioner and therefore the impugned order cannot be sustained. Alternative remedy - Held that: - there was an appellate remedy but without availing it, the petitioner has approached this Court. Merely because the petitioner failed to avail the alternative remedy available, this Court cannot refuse to entertain this writ petition as alternative remedy is always not a bar and this Court, in exercise of it's power under Article 226 of The Constitution can always entertain a writ petition depending upon the facts and circumstance of each case - merely because the petitioner failed to avail the alternative remedy, it will not be a ground to dismiss the writ petition at the threshold. Penalty - Held that: - In the absence of any ill-intention or mens rea on the part of the petitioner to gain unlawfully by exporting goods which are not permitted to be exported by them as per the LoA, the respondent is not justified in imposing penalty. Petition allowed - decided in favor of petitioner.
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