TMI Blog2010 (1) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... ry takes decision on waiver thereof. Refund of amount deposited ordered. - 2437 of 2007 (GM-RES) - - - Dated:- 7-1-2010 - Anand Byrareddy, J. Shri T. Rajeswara Sastry and Associates, Advocate, for the Petitioner. S/Shri Rosa Paramel, Advocate and N.R. Bhaskar, CGSC, for the Respondent. [Order]. - Heard the Counsel for the petitioner and the respondents 1 to 3. The counsel for the Union of India, though represented, remains absent. 2. The petition is filed questioning the order passed by the second respondent, rejecting the appeal filed by the petitioner on the ground that recommendations of the Board for Industrial Finance and Reconstruction (hereinafter referred to as the "BIFR" for brevity) provide only for waiver o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seriously affected the working capital of the petitioner compelling the petitioner to suspend the manufacturing activities in June 1997. Though the petitioner did manage to revive the operations in August 1998, the production levels were low and therefore, the petitioner incurred heavy losses during the financial years 1997-1998 and 1998-99. That due to erosion of the net worth of the company, it was declared as a sick industry and a reference was made under Section 15(1) of the Sick Industrial Companies (Special Provision) Act, 1985 in April 1999 to the BIFR. The BIFR, on hearing the petitioner's case, declared it as a sick unit and appointed IDBI as the Operating Agency. The rehabilitation proposal having been submitted and on long del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same was dismissed only on one ground, namely that the relief granted by the BIFR was in relation to customs duty liability and would not include the fiscal penalty levied under the provisions of the 1992 Act, which is sought to be challenged in the petition. 4. The Counsel for the petitioner while reiterating the above sequence of events would submit that in identical circumstances, the Delhi High Court in Dencap Electronics Private Limited v. ADGFT - 2006 (194) E.L.T. 389 (Del.), after an analysis of the provisions of Section 11 of the 1992 Act in extenso and placing reliance on a judgment of the Supreme Court in Hindustan Steel Limited v. State of Orissa, 1978 (2) E.L.T. 159 (S.C.) has held that no penalty can be imposed under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and, if he so desires, of being heard in his defence." And the Counsel would submit that it is clear from the tenor of the said section that it was necessary for the first respondent to have considered the revision application by the petitioner and the same having been rejected, only on the ground of maintainability is illegal. The counsel would also point out that having regard to the object of the Sick Industrial Companies (Special Provisions) Act, 1985, the grant of relief of rehabilitation by the Board, would necessarily encompass all such liabilities which are sought to be enforced as against the petitioner of being waived and once such a relief is granted, the question of implementation by the concerned entity is axiomatic for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of waiver of fiscal penalty is not in the hands of the respondents 1 to 3 and in this regard, would place reliance on the modified order passed by the BIFR, dated 24-3-2004 which reads as follows : 7. The Bench having perused the letter dated 8/20-1-2004 sent by the office of the Joint Director General of Foreign Trade to the Board observed that para-8(E)(ii) of the Sanctioned Scheme would need to be modified as the customs duty and or interest thereon can be considered for waiver only by Ministry of Finance (Deptt. of Revenue) and/or Chief Commissioner of Customs, Chennai Sea Port and not by the DGFT. 8. Having heard the submissions made by those present in the review hearing and after taking into account, the material facts on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have to be ignored in the petitioner considering whether had complied with any requirement of the export obligations. It follows therefore that the concerned respondents afford the waiver of Fiscal penalty since they have not chosen to challenge the recommendations made by the BIFR, which has attained finality. Insofar as respondents 1 to 3 having been directed to waive the customs duty in the first instance is concerned, as rightly pointed out by the counsel for the respondents 1 to 3, the same has been duly modified and it is now made clear that the waiver of fiscal penalty is to be considered by the Ministry of Finance or such other competent authority and is not within the competence of the DGFT. Having regard to this position, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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