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2016 (5) TMI 891 - DELHI HIGH COURT

2016 (5) TMI 891 - DELHI HIGH COURT - 2016 (336) E.L.T. 390 (Del.) - Imposition of penalty - 100% default in fulfillment of export obligation - export obligation period of the petitioner expired on 21st June, 2001 and the petitioner not submitted export details in the requisite manner supported with the bank certificate/ documents. - Held that:- nothing on record leads to the conclusion least suggest that export obligation has indeed been fulfilled. Rather the case of the petitioner is of ha .....

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/2000-Customs and 51/2000-Customs, both dated 27th April, 2000 providing that in order to ensure proper monitoring and utilisation of inputs imported against Advance Licences, a DEEC book is issued along with Advance Licence and at the time of import and export against the Advance Licence entries are made in the DEEC book by Customs to keep record of import/export made against it. Obviously the petitioner, even before the Advance Licence was issued, could not have the DEEC book and it is clear a .....

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error in the factual finding of the Statutory Authorities, of the petitioner having not fulfilled the Export Obligation. Resultantly, the impugned demand is justified. - Decided against the petitioner - W.P.(C) No. 8417/2015 & CM No. 18002/2015 (for stay). - Dated:- 18-5-2016 - MR. RAJIV SAHAI ENDLAW J. For the Appellant: Mr. Biswajit Bhattacharyya, Sr. Adv. with Mr. Chandrachur Bhattacharyya, Adv. For the Respondents: Mr. Sanjeev Narula, CGSC, Mr. Ajay Kalra and Mr. Satvi .....

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ion 15 of the FTDR Act dismissing the appeal preferred by the petitioner; and, (iii) the order dated 21st / 24th August, 2015 of the Reviewing Authority and Director General of Foreign Trade (DGFT) in exercise of powers under Section 16 of the FTDR Act of rejecting the review application filed by the petitioner. 2. Notice of the petition was issued, though no interim relief granted. Counter affidavit has been filed by the respondents. The petitioner did not opt to file rej .....

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as the petitioner already had export orders in hand; (iii) that on 22nd December, 1999 the petitioner was issued advance licence for ₹ 69,26,100/- under the Duty Exemption Scheme and which licence was subject to the condition that the petitioner shall fulfil an export obligation of ₹ 1,07,58,600/- as Free on Board(FOB) value within the stipulated period which was mentioned of 18 months , meaning, that there was no cut-off date before which export could not have been made; .....

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April, 1999; (vi) the petitioner was issued three Bank Certificates of Export and Realisation (BCER) of a total value of more than the export obligation required to be fulfilled by the petitioner; (vii) that the petitioner was also issued shipping bills dated 16th February, 1999, 29th January, 1999 and 20th April, 1999 against the aforesaid BCER; (viii) the petitioner however misplaced the original shipping bills and though requested the Customs Authorities fo .....

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of entries of the relevant shipping bills, the same is not material; (xi) that the petitioner received show cause notice dated 31st April, 2004 for purported non-fulfillment of export obligation under the licence aforesaid; (xii) the petitioner submitted a reply dated 19th May, 2004 to the show cause notice; (xiii) another notice dated 16th December, 2004 was served on the petitioner and to which a reply dated 31st December, 2004 was submitted; and, .....

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er having not submitted export details in the requisite manner supported with the bank certificate/documents towards fulfillment of export obligation and treating the petitioner as 100% defaulter in the fulfillment of export obligation. 5. The petitioner preferred statutory appeal and in which as aforesaid repeated opportunities were given to the petitioner to submit the documents. The Appellate Authority has vide impugned order dated 5th January, 2015 dismissed the appeal finding/ob .....

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Credit; (iv) only copy of BRC had been submitted and original BRC had not been submitted; (v) the petitioner had been unable to produce shipping bills showing authorization number/file number; (vi) the petitioner had not produced duplicate/bank certificate copy of BRC; (vii) though the petitioner was repeatedly advised to provide documents required as per policy/procedure but had failed to; and, (viii) that it was thus clear that the pet .....

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only produced copy of MODVAT non-availment certificate; and, (ii) no ground for review was made out. 7. It is the contention of the petitioner before this Court in the petition; (i) that the three BCER submitted by the petitioner established export of goods of the value more than for which export obligation was imposed under the advance licence aforesaid; (ii) that all the said Bank Certificates bear the same advance licence number and that export .....

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penalised for technicality; (vi) reliance in the petition itself is placed on Mohan Machines Ltd. Vs. Union of India 2008 (100) DRJ 239 holding that non-production of DEEC book with relevant entries could not be a ground to impose penalty for non-fulfillment of export obligation if there are sufficient documents available to substantiate the claim of fulfillment of export obligation; (vii) Directorate of Enforcement Vs. Deepak Mahajan AIR 1994 SC 1775 to contend that pena .....

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nless there is deliberate defiance of law or dishonest conduct. 8. The respondents in their counter affidavit have pleaded: (i) that the petitioner having approached this Court in exercise of its power of judicial review, the power of judicial review can extend only to the decision making process and not to the decision; reliance in this regard is placed on Tata Cellular Vs. Union of India AIR 1996 SC 11 and on judgment dated 15th September, 2014 of this Court in W.P.(C) No .....

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by the petitioner; (iii) export obligation has to be fulfilled both in terms of quantity wise and value wise as per condition no.5 of the Advance Licence; the petitioner did not submit the original DEEC book (Part-II) of exports, it proves that the petitioner has not fulfilled the export obligation in terms of quantity; (iv) it is also to be ascertained whether the money earned in the BRCs is for that quantity of exports which are allowed in the Advance Licence;

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rove the fulfillment of actual Export Obligation in terms of quantity; and, (viii) that ample opportunities were given to the petitioner. 9. The senior counsel for the petitioner argued (i) that the show cause notice dated 31st March, 2004 did not contain any proposal for levying penalty; (ii) all that the petitioner was required to establish was of having fulfilled export obligation, be that from whatsoever documents; and, (iii) that the .....

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orted but has no proof of having paid customs duty thereon; (b) that the export even if effected is in contravention of law; (c) that as per the terms of Advance Licence the petitioner could have exported only the goods mentioned therein and none of the documents on the basis of which the petitioner desires the respondent to hold that the petitioner has fulfilled the export obligation are proof of export of those goods; (d) merely because the petitioner may ha .....

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d (ii) DEEC book containing details of imports and exports duly endorsed and signed by the Customs Authorities and the petitioner has not produced the same; (g) that Mohan Machines Ltd. supra is a case of advance authorisation and is not applicable; and, (h) that Dencap Electronics (P) Ltd. also is not applicable in the factual scenario and therein the petitioner was found to be not in breach whereas the petitioner here is in breach. 11. The senior c .....

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What immediately becomes vivid on encapsulation as aforesaid of the controversy is, that the petitioner also admits that what it was required as per the Rules to submit in proof of fulfillment of export obligation, it has not submitted. The petition does not also challenge the Rules requiring the petitioner to submit particular documents in fulfillment of export obligation and which the petitioner is unable to submit. However what the petitioner wants this Court to do, without challenging the Ru .....

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rent finding of fact of the Adjudicating Authority, Appellate Authority and the Reviewing Authority, of the documents submitted by the petitioner not establishing fulfillment by the petitioner of the export obligation under the Advance Licence. 13. In my opinion, the scope of the jurisdiction of this Court in exercise of power of judicial review does not extend to, without quashing the Rule aforesaid, granting relief to the petitioner even though it is non-complaint therewith or to i .....

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own to do away with adjudication, whether export obligation has been fulfilled or not. Once the authorities, for admitted non furnishing by the petitioner of documents prescribed, have in accordance with the said Rule concluded that the petitioner has not fulfilled the export obligation, no fault can be found therewith. This Court under Article 226 is not to distribute reliefs, to which the petitioner in accordance with law and Rules is not entitled to. The power under Article 226 is only to ens .....

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fact found that though the machine had been imported and trial production commenced but on account of financial crises and non-cooperation from the foreign collaborator export obligation could not be fulfilled and the machinery was confiscated and the Bank Guarantee furnished for the balance import duty to be realised for non-fulfillment of export obligation was encashed and thus the entire import duty realised. It was in this scenario that it was held that Section 11 of the FTDR Act providing f .....

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that the import duty, in lieu whereof it was to fulfill the export obligation, has been paid by it or recovered from it, for it to be said that the obligation to export no longer survives. Rather, it is the plea of the petitioner that it has fulfilled the export obligation though is unable to prove the same in the manner required by law. 16. Similarly in Mohan Machines Ltd. there was no doubt that the export obligation had been fulfilled and it was in view thereof that it was held t .....

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said to be against the Advance Licence. A perusal of the Advance Licence shows that against the column category of licence the words Quantity Based Advance Licence were entered. The counsel for the respondent during the hearing also handed over a copy of the Public Notice No.79 (RE-2005)/2004-2009 dated 2nd January, 2006 issued by the DGFT in exercise of powers under Paragraph 2.4 of the Foreign Trade Policy, 2004-09 laying down Guidelines for disposal of the old cases of Advance Lic .....

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nd at the time of import and export against the Advance Licence entries are made in the DEEC book by Customs to keep record of import/export made against it. Obviously the petitioner, even before the Advance Licence was issued, could not have the DEEC book and it is clear as sky that the exports even if made were not against the Advance Licence and the petitioner is clearly in violation of its obligation thereunder and there is no reason for interference with the orders impugned. 18. .....

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obligation under Advance Licence dated 22nd December, 1999 to be fulfilled are stated to have taken place on 16th February, 1999, 29th January, 1999 and 20th April, 1999. 19. Supreme Court as far back as in S.B. International Limited Vs. Assistant Director General of Foreign Trade (1996) 2 SCC 439 held on an examination of the Duty Exemption Scheme under the Imports and Exports Policy of the Government of India that; (i) the object behind the scheme is to enable the expor .....

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rial, components etc. of a particular value free of duties but you must export goods of a particular value within a particular date. If you fail to do so, you will be liable to levy of penalties and other action according to law"; (vi) the duty free import of raw materials etc. is permitted to enable the exporter to sell his goods abroad at a more competitive price, thereby fetching precious foreign exchange for the country; (vii) mere making of an application does n .....

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(x) however under the policy one has to ask for an import licence promising to export goods of a particular value within a particular time; (xi) it is difficult to appreciate how can it be said in such a situation that mere filing of an application creates a vested legal right to obtain a licence; (xii) it is the date of licence that is relevant and not the date of application therefor; (xiii) the mere fact that the authorities have a discretion to take into a .....

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