TMI Blog2006 (4) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... m has closed down its business and has no financial capacity to engage the services of a lawyer. Mr.Kulkarni has furnished a power of attorney executed by all the partners of the firm dated 24/3/2006 wherein all the partners have authorised Mr.Manohar Kulkarni to appear on behalf of the petitioner. Accordingly, we have permitted him to argue the case on behalf of the petitioner. 3. The petitioner is a Partnership firm duly registered under the Indian Partnership Act, 1932. The said partnership firm was managed by Mr.Manohar M.Kulkarni, who has rendered service as Captain in the Indian Army. The other partners of the firm are the family members of Mr.Manohar Kulkarni. 4. The dispute in the present case pertains to the issuance of a licence requiring the petitioner to fulfil the export obligation by supplying goods to Rastriya Chemicals Fertilizers Limited ( RCF for short), a Government of India Undertaking. But the Bond in prescribed form executed by the petitioner required the export obligation to be fulfilled by exporting goods to a place outside India. It is not in dispute that the petitioner has fulfilled the export obligation by supplying goods to RCF as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssional rate of duty. The petitioner forwarded the said certificate to the Jt. C.C.I., Bombay. 8. Inspite of the clear knowledge that the Thal Project of the RCF was wholly financed by the Government of India, the Controller of Imports Exports, Bombay issued a SIL to the petitioner bearing No.P/L/2993896 dated 30th May, 1983 under AM 84 policy permitting the petitioner to import raw materials as per list attached thereto for approximate value of ₹ 5,78,300/- on the condition that, - a) the petitioner shall supply to RCF export items as per list attached thereto for an f.o.b. value of ₹ 17,49,000/- within 6 months from the date of clearance of the first consignment against the said licence. b) to ensure fulfilment of the export obligation under the said licence, the petitioner shall execute bond with 100% Bank guarantee as per the proforma given in Appendix-38 of the Hand-book of Import-Export Procedure 1981-82 for a sum of ₹ 12,14,623/-. c) goods imported against the said advance licence shall be utilised in accordance with the provisions of Customs Notification No.11/ F-No.602/14/8/DBK dated 9/6/78 as amended from time to tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Initially RCF declined to make endorsement on the ground that the Thal project is financed by the Government of India and not by organisations like World Bank, OECF, ADB, etc. as contemplated under Exemption Notification No.210/82 dated 10/9/82. However, lateron, RCF made requisite endorsement on the DEEC book on 2/2/88 (Exh.H) to the effect that the petitioner has supplied goods valued at ₹ 17,59,382/- during the period from 27/7/83 to 10/5/84. 12. In the meantime, a show cause notice dated 5/6th September, 1985 was issued by the JCCI, Bombay calling upon the petitioner to show cause as to why the bond furnished by the petitioner for ₹ 12,14,623/- should not be enforced as the petitioner has violated clause 1 of the licence and clause 5 of the Bond. By the said show cause notice, the petitioner was called upon to appear before Mr.G.R.Nair, the Deputy Chief Controller of Imports Exports on 20th September, 1985 at 3.15 p.m. for a personal hearing. 13. Although the petitioner claims that a personal hearing was given by Mr.G.R.Nair, Deputy Chief Controller on 29/9/85, by a forfeiture order dated 4th December, 1985 Smt.R.Johny, the Controller of Import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r would deposit the customs duty as demanded and the counsel for the revenue made a statement that within two weeks after the amount is deposited show cause notice demanding the customs duty would be issued and the same would be adjudicated in accordance with law. The said writ petition was disposed off in the above terms on 21/10/2002. While disposing of the above petition, it was also ordered by the Court that the 2nd appeal filed by the petitioner against the order passed in first Appeal on 21st May, 1986 which was pending before the Chief Controller of Imports Exports, New Delhi be disposed of within a period of 6 months from the date of receipt of the writ. 17. Thereafter, by the impugned order dated 21st February, 2003, the Appellate Committee consisting of two Joint Director General of Foreign Trade, New Delhi held that the 2nd appeal said to have been filed by the petitioner was not available and by obtaining a copy from the petitioner, the 2nd appeal has been disposed off. It was held that in the current Hand Book of Procedures of Export-Import Policy there is no provision for 2nd appeal against the forfeiture order, however, as per the directions given by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants. I also do not find any mis-utilisation of imported goods although the Deputy Chief Controller of Imports Exports, Bombay in his Order-in-Original observed so and that the first appellate authority merely agreed with the same. A perusal of the record further indicates that the appellants at no point of time concealed any information. They applied for the special imprest licence to execute RCF, Thal Project. However, the appellants had not been able to identify and chose and correct scheme of import licensing to execute the order. The correct import licensing scheme in their case was project imports. Instead they filed an application for grant of duty free licence under Appendix-19 of Import Policy AM 1982-83. There was substantial difference between the special imprest licence and project import licence. While the former permitted 100% duty free imports, the later entitled only concessional rate of duty. In addition the former licence is issued under the deemed exports meaning by supplies would be made to project aided by IDA / IBRD under global tender system. 11. The appellants may have mis-comprehended the policy in force. But, they did not object when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the request on the ground that there is nothing called Project Import licence and as the imports were made in the year 1983 when the Project Import Regulations of 1965 were in force it is not possible to verify the conditions after 20 years. 20. The argument of Mr.Kulkarni, partner of the petitioner before us, is that in respect of the Show Cause notice dated 5/6th September, 1985 personal hearing was granted by Mr.G.R. Nair, Deputy Chief Controller of Imports Exports, whereas the forfeiture order on the show cause notice has been passed on 4/12/1985 by Smt.R.Johny, the Controller of Imports Exports. Relying upon the decision of the Apex Court in the case of Ossein Gelatine Manufacturer s Association of India V/s. Modi Alkalies Chemicals Limited reported in (1989) 4 SCC 264, Mr.Kulkarni submitted that natural justice demands that the hearing and order should be by the same officer. In the present case, since the forfeiture order is passed by an officer other than the one who heard the matter, the forfeiture order is liable to be quashed and set aside. 21. Mr.Kulkarni further submitted that even the first appeal was heard by the Deputy Chief Controller of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order) has been denied to the petitioner. Therefore, when the petitioner has already suffered losses to the extent of about ₹ 20.44 lakhs (₹ 14.92 lakhs + ₹ 5.52 lakhs), the respondents are not justified in imposing further liability upon the petitioner especially when the petitioner has fulfilled the export obligation as per condition No.1 of the licence. 24. Mr.Kulkarni referred to the order passed by the second appellate authority on 18/6/92 in the debarment proceedings wherein it is clearly held that there was no malafides or misutilisation of the goods on the part of the petitioner. Therefore, when the petitioner has not concealed any information and in fact fulfilled the export obligation as per the licence condition it cannot be said that the petitioner has failed to fulfil the export obligation. He submitted that the burden was on the licensing authority to issue correct licence and having issued wrong licence for supply of goods to RCF it does not lie in their mouth to hold that the petitioner has failed to fulfil the export obligation. The licence was issued with an express condition that the exports should be made to RCF. The petitioner has ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Additional Chief Controller of Imports and Exports in the appellate order dated 18/6/92 passed in the debarment proceedings had advised the petitioner to pay the customs duty with interest and take up the matter with the Ministry of Finance to convert the special imprest licence into Project Import licence. However, the petitioner had not taken steps in that behalf and it is only during the pendency of this petition, the petitioner agreed before this Court on 8/7/03 to deposit the customs duty and apply for conversion of licence. In view of the inordinate delay in seeking conversion of licence, the Finance Ministry by a letter dated 22/8/03 has informed the petitioner that it is not possible to verify or satisfy the conditions retrospectively after 20 years. The petitioner has not challenged the said decision. Accordingly, Mr.Rana submitted that the petitioner is not entitled to any relief in the present petition. 28. We have carefully considered the oral as well as the written submissions made by both the sides. 29. In the present case, the petitioner had applied for a licence so as to import raw materials required in the manufacture of goods to be supplied to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the revenue that the petitioner has obtained the Special Imprest licence by fraud, collusion or misstatement of facts. In fact in the debarment proceedings the second appellate authority in its order dated 18/6/892 (Exhibit X ) had clearly recorded a finding that there are no malafides on the part of the petitioner and that the petitioner has not misutilized the imported goods. 32. In these circumstances, passing a forfeiture order against the petitioner was uncalled for. Therefore, the second appellate authority in the impugned order dated 21/2/03 has taken a reasonable approach that since the forfeiture order dated 4/12/85 has not been ultimately implemented at the bank s level and practically no amount has been transferred out of the firm s account to the Governments account, no relief need to be given in the 2nd appeal. It was further held that in view of the non implementation of the forfeiture order, there is no adverse financial effect on the firm. 33. From the aforesaid order dated 21/2/03 passed in 2nd appeal, it is clear that in spite of the forfeiture order the licensing authorities cannot enforce the Bond / bank guarantee. However, the question is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties ought to have taken remedial steps immediately. It is brought to our notice that under Rule 8 of the Foreign Trade (Regulation) Rules, 1993 framed under the Foreign Trade (Development and Regulation) Act, 1992, the licensing authority is empowered to amend the licence. In the present case, the Special Imprest licence dated 30/5/83 was erroneously granted by the JCCI, Bombay and, therefore, under Rule 8 of the Foreign Trade (Regulation) Rules, 1963, the JCCI, Bombay, is empowered to rectify the error by amending the licence. 35. In these circumstances, without going into other arguments advanced by the petitioner in the interest of justice we pass the following order : a) In the light of the impugned order passed in 2nd appeal on 21/2/03 (Exhibit-W to the petition) the licensing authorities shall not enforce the Bond/bank guarantee executed by the petitioner on 17/6/83 for ₹ 12,14,623/-. b) The JCCI, Bombay shall in exercise of powers conferred under Rule 8 of the Foreign Trade (Regulations) Rules, 1993 shall within six weeks from today amend the Special Imprest Licence No.P/K/2993896 dated 30/5/83 into a licence which may entitle the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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