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2016 (7) TMI 860

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..... tted or attempted to make any export or import in contravention of any provisions of the FTDR or rules and order made thereunder or the Foreign Trade Policy. Fifthly so far as the petitioners are concerned no opportunity of hearing is given therefore there is clear violation of principle of natural justice. By merely providing the notice that the contents be brought to the notice of the Directors who may submit their response would not be sufficient notice to them. In the notice no allegations were made against the Directors. In this view of the matter the show cause notice is no show cause notice in the eye of law and therefore the consequential orders are also required to be nullified. - Penalty set aside - Decided in favor of petitioner. - Special Civil Application No. 14240 of 2010 - - - Dated:- 3-5-2016 - Akil Kureshi And A. Y. Kogje, JJ. For the Petitioner : Mr Devan Parikh, Advocate For the Respondent : Mr PS Champaneri, Advocate, Priyank P Lodha, Advocate JUDGMENT ( Per : Honourable Mr. Justice A. Y. Kogje ) 1. The present petition under Article 226 is for the relief of quashing the order-in-original dated 15.07.2009 passed by the Deputy Dir .....

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..... er, came to be adjudicated and, by the order-in-original, the Deputy Director General of Foreign Trade ordered recovery of the payment of penalty and while doing so, concluded as under: 7. On going through the file it is noticed that a Demand Notice dated 23/7/2002 has already been issued by the Office of the Director General of Foreign Trade, New Delhi demanding the noticee company and its Directors to pay an amount of ₹ 25,80,680/- on 23.7.2002. The noticee company and its Directors has not submitted documentary evidence about fulfilment of the export obligation in respect of the above mentioned FPCG license and also not availed the personal hearing offered to them by this office in continuation of this office Show Cause Notice dated 09/09/2003. Since the noticee company and its Directors has failed to submit the export documents, the adjudicating authority has no option but to impose penalty on its Directors jointly and severaly. In my opinion the appropriate penalty amount in this case will be two times the cif value of the license i.e. ₹ 1,01,74,696/- (Rs. 5087348 x 2) (Rupees One Crore One Lakh Seventy Four Thousand Six Hundred Ninety Six Only.) (d) The .....

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..... ing and based on an effort by them to misguide this Hon'ble Court by way of their wrong submissions and hence this Hon'ble Court is prayed not to consider these false submissions and misrepresentation and consequently this Hon'ble may be pleased to dismiss the petition. The submission of the respondent that total duty foregone due is ₹ 13.00 lacs out of which ₹ 6.5 lacs has also been adjusted towards encashment of bank guarantee, penalty of ₹ 1.00 crore jointly and severally on the Directors is incorrect and is totally denied. As regards the imposition of the penalty on Krishna Singh, wife of Shri Om Vir Singh, the respondents deny the allegation of the petitioners. The respondents have to say and submit that on the date of obtaining license as per the Memorandum of Understanding and also during the course of proceedings of adjudication with regard to the show cause notice dated 09.09.2003, the petitioners have never brought to this fact with documentary evidence before the adjudicating authority and hence the allegations made by them at this belated stage that too without any documentary evidence cannot be accepted and hence totally denied. In para 8 .....

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..... bets or attempts to make any export or import in contravention of any provision of this Act or any rules or orders made thereunder or the foreign trade policy, he shall be liable to a penalty of not less than ten thousand rupees and not more than five times the value of the goods or services or technology in respect of which any contravention is made or attempted to be made, whichever is more. 14. Giving of opportunity to the owner of the goods etc.:- No order imposing a penalty or of adjudication of confiscation shall be made unless the owner of the [goods (including the goods connected with services or technology)] or conveyance, or other person concerned, has been given a notice in writing- (a) informing him of the grounds on which it is proposed to impose a penalty or to confiscate such [goods (including the goods connected with services or technology)] or conveyance; and (b) to make a representation in writing within such reasonable time as may be specified in the notice against the imposition of penalty or confiscation mentioned therein, and, if he so desires, of being heard in the matter. 7. The perusal of show cause notice which is the starting .....

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..... itioner cannot be construed as a parallel situation to the one before the Supreme Court in the aforesaid decision. In the present case what is of utmost importance is the fact that no notice to the petitioner was issued by the respondents. That being the case, there was a clear violation of the mandatory statutory provision contained in section 4L of the said Act. That apart, there was a violation of the principles of natural justice. 18. Before parting with this case, it would be relevant to note that though the aforesaid discussion has proceeded on the assumption that no prejudice has been caused to the petitioner, in point of fact prejudice has actually been caused to the petitioner. This is so because the show cause notice was not issued to the petitioner. Even the show cause notice issued to the company did not contain specific allegations against the petitioner to which he could reply. No opportunity as such was given to the petitioner to represent against the proposed imposition of penalty. Obviously, the petitioner was not heard before the order in original was passed whereby the aforesaid penalty was imposed upon him. The mere fact that he filed an appeal and was hea .....

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