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1988 (3) TMI 243 - HC - Customs

Issues:
Challenge to import and export control orders based on misrepresentation of actual user license and manufacturing entitlement.

Analysis:
The petition challenged the order passed by the Additional Chief Controller of Import and Exports, which was appealed against by the petitioners. The dispute arose from the import of certain articles based on an actual user license obtained through misrepresentation regarding manufacturing purposes. The core issue revolved around the petitioners' entitlement to import specific articles, such as thin-walled bearings, under the premise of manufacturing parts of an internal combustion engine, particularly the crankshaft. The Department contended that the petitioners lacked the facilities to manufacture crankshafts, thus questioning their entitlement. The critical question was whether the petitioners were genuinely authorized to manufacture the crankshaft or parts of the internal combustion engine, which was disputed by the Department based on a report from the Director of Industries. The Court noted that providing only a summary of the report without disclosing the full document violated the principles of natural justice, requiring authorities to furnish all relevant documents to the concerned party. Consequently, the Court set aside the previous orders and directed the authorities to issue a fresh notice along with all relevant documents, including the complete report from the Director of Industries.

The Court allowed the petition, making the rule absolute in favor of the petitioners. Additionally, it addressed the issue of goods already sold by the Department, with the sale proceeds deposited in a fixed deposit. The Court ordered the continued investment of the proceeds in a fixed deposit with a nationalized bank by the Prothonotary, including accrued interest. Parties were permitted to seek a court order for the release of the amount post the import control authorities' decisions. If final orders were not issued within six months by the Deputy Chief Controller of Imports and Exports, parties could apply for payment after the specified timeline. The Court concluded by stating that there would be no order as to costs in the petition, thus resolving the matter comprehensively.

 

 

 

 

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