TMI Blog2013 (1) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... ty free licenses on certain conditions. There is no dispute about the fact that exports have been made and that foreign exchange has been realized. In this view of the matter,the imposition of a penalty in the amount of ₹ 5.60 lakhs is disproportionate. Ends of justice would be met if the penalty which has been imposed by the adjudicating authority is reduced to an amount of ₹ 1.00 lakhs. The order of the adjudicating authority as confirmed in appeal, shall stand modified accordingly. - Writ Petition No. 955 of 2012 - - - Dated:- 17-1-2013 - Dr. D.Y. Chandrachud And A.A. Sayed, JJ. Appellant Rep. by : Mr. Shiraz Rustomjee, Sr. Adv with Mr. P.L. Bachani Respondent Rep. by : Mr. G.R. Sharma, Special Counsel wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trade (Development and Regulation) Act, 1992, to show cause as to why a penalty should not be imposed for failure to fulfill the prescribed export obligation in respect of the value based advance license in question. On 30 May 2008, the Joint Director General of Foreign Trade passed an order imposing a fiscal penalty of Rs.5.60 lakhs on Apar Limited. This was on the basis that the noticee had not submitted any document in respect of the fulfillment of its export obligation. The order of adjudication was passed on a computation of customs duty together with interest payable in the amount of Rs.3,65,849/- In appeal, this order has been confirmed by the Additional Director General of Foreign Trade on 17 September 2009. The Appellate Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Under the Exim Policy of 1992-1997, it was contemplated that exports could be made in anticipation of a grant of license. The advance license or the materials imported against it was freely transferable after the export obligation was fulfilled and the export proceeds were realized. In the present case, the exports were effected by Apar Limited on 5 July 1993 against which a value based license was created on 13 August 1993. Once the export obligation was fulfilled, the license as well as the material imported became freely transferable. In the circumstances, it was submitted that no case for imposition of penalty was made out. 5. On the other hand, it was urged on behalf of the Respondents that : (i) Under the terms of the E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to achieve both the quantity and FOB value of the exports specified in the license. Paragraph 59 stipulated conditions of eligibility and provided that any merchant exporter or manufacturer exporter who holds an import-export license code number, a specific export order/letter of credit and is in a position to realize the export proceeds in his own name, may apply for a duty free license. Under paragraph 66, exports made from the date of receipt of an application under the scheme by the Licensing Authority, were to be accepted towards the discharge of the duty obligation. Paragraph 67 provided that the value of the quantity based advance license or the materials imported against it were to be freely transferable after the export obligatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be questioned as incorrect. 8. Under section 11 of the Foreign Trade (Development and Regulation) Act, 1992, a penalty of not more than five times the value of the goods in respect of which the contravention is made or attempted to be made, is stipulated. The adjudicating authority having regard to the CIF value of Rs.1.12 lakhs imposed a penalty of Rs.5.60 lakhs which appears to be the maximum permissible under section 11(2). 9. In the present case, as the facts before the Court would indicate, there was a scheme of arrangement dated 17 December 1992, under which a division of Apar Limited was spun off to Apar Lamps Private Limited, which came to be named on 22 January 1993 as GE Apar Lighting Private Limited. The sequence of even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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