9911796707
TMI Blog2000 (6) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of Companies Act, having its registered office at Udupi, South Kanara District. It is engaged in the business of manufacture of 'Nylon Fish nets'. It is 100% export oriented unit. 3.Central Government in order to bridge the increasing deficit in the balance of trade and running down of exchange reserves has thought fit to step up growth of foreign exports. To achieve this object, the Union Government has decided to frame and implement the scheme to facilitate the setting up 100% export oriented units. A 100% export oriented unit would mean an industrial unit offering for exports its entire production excluding permitted level of rejects. Units were exempted from payment of import duty on the import of capital goods, components, raw materials, etc., including construction materials. Units which were approved for special facilities under the scheme are obliged to execute bond/legal undertaking with CCI and E that in case of failure to fulfil their obligations, they would be liable to penalty in terms of such bond/legal undertaking besides the penalty, if any, under the provisions of the Import Trade Control Regulations. The resolutions of the Government of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 4-I of the imports and Exports (Control) Act, 1947 read with Clauses 10 and 8 of Imports (Control) Order, 1955. Petitioner as well as its two Directors replied to the show-cause notice by their letter dated 29th of April, 1992. Allegations made in the show-cause notice were denied. It was stated that the petitioner had failed to discharge its export obligations imposed upon them due to the reason beyond its control. Request was made to drop the penalty proceedings. The Additional Director General of Foreign Trade was not satisfied with the explanation offered by the petitioner. He passed an order dated 24th of May, 1993 and imposed a penalty of Rs. 50 lakhs for failure to discharge export obligation to the tune of Rs. 1.43 crores and for not achieving the prescribed VAC of 26% thereby violating the conditions of imports and letter of approval issued to them and the relevant import policy. 7.Aggrieved against the order passed by the Additional Director General of Foreign Trade, the petitioner filed an appeal before the Appellate Committee, the second respondent herein. The Appellate authority rejected the appeal. However, taking a lenient view in the background of recommendatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r having held that the petitioner had not contravened the provisions of Section 4-I(1) (a) to (d) of the Act and that there was no failure on their part to fulfil the conditions of not achieving the prescribed VAC, the Single Judge should not have remanded the case. It was further contended but without admitting that the order of remand is justified, that the learned Single Judge was in error in directing that while disposing of the appeal the Appellate Authority should not taken into consideration that the facts laid down by the Single Judge in his order. 11.The respondents have filed the appeals challenging the finding recorded by the Single Judge that the petitioners has not contravened the provisions of Sections 4-I(1)(a) and (d) of the Act and that there was no failure on the part of the petitioners in not achieving the prescribed VAC and not fulfilling the export obligations. 12.Counsel for the parties have been heard at length. 13.Section 4-I provides for liability to penalty. Section 4-I(1)(a) and (d) (which have already been extracted in the earlier part of the judgment) provides liability to penalty on a person who, in relation to any goods or materials which have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conditions of OGL under which the import was allowed by not achieving the prescribed VAC and not fulfilling the export obligation. A look at the export oriented scheme and conditions of licence or letter of intent should show that the scheme provides that the 100% export oriented unit much achieve a minimum value addition of 20% and, under the scheme even the domestically procured raw materials are also treated as imports for the purpose of computation of such value addition. Because of the variation in the letter of intent issued to the petitioner dated 28-7-1984, petitioner was required to achieve the minimum value of addition of 26%. In the application form, it is indicated that the value addition is not to be reckoned from year to year but should be reckoned by taking into consideration the first five years of production. The period of export stipulated in the letter of intent issued to the petitioner was 10 years and later, the Union Government, in its letter of May, 1996 extended the period by another five years, thus making it a total period of 15 years for fulfilling the conditions of OGL. On these facts the Single Judge recorded the finding that the petitioner had not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge has concluded that imposition of penalty was not an automatic consequence of some default of some of the terms and conditions of the licence. The authority, in addition to the finding that there has been a default, should also consider the question whether there was good and sufficient cause for the default. Only if the authority finds that there was no good or sufficient cause, could it proceed to impose the penalty. As the appellate authority did not consider this aspect, the case was remitted back to it for its decision. While doing so, Single Judge observed :- "In the result, petitions deserve to be allowed. Accordingly, they are allowed." 17.Having said so, the learned single Judge proceeded to state that he is remanding the matter to the appellate authority for a fresh disposal in accordance with law. Single Judge set aside the order of the original authority as well. He further directed that the Appellate Authority should dispose of the matter afresh 'in accordance with law without being influenced by any one of the observations made in the course of this order'. 18.Sri K.R. Prasad, Counsel appearing for the petitioner, strenuously contended that in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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