RAJESH JAIKRISHNA Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner at the relevant time was Director of Ambuja Petrochemicals Ltd.(in short referred to as `the Company'). The company had applied for and was granted licence under the Duty Exemption Scheme whereunder it could import Orthoxylene without payment of import duty against its obligation to export Pthalic Anhydride. After the import of Orthoxylene and using the same in the manufacture of Anhydride, the company could not export the same due to recession in the international market and sold it in the domestic market. Pursuance to an order passed by the Gujrat High Court, the company had stated to have paid excise duty on the Orthoxylene imported by it and according to the company it was, therefore, not liable to export the same under the Duty Exemptions Scheme. A show cause notice was, however, issued on 7.11.1994, by the respondents under Section 4-L of the Imports and Exports (Control) Act, 1947calling upon the company to show cause as to why penalty be not imposed on it for not exporting the goods pursuant to the import of duty free goods. Reply to the show cause notice was filed, however, the company was held guilty of contravention of Section 4-I (1) (a) of the Import and Export (Controls) Act, 1947 read with Section20 (2) of the said Act and Clause 8 (I) (f) (g) of the Imports Control Order, 1955. Besides imposing a penalty Rs.1crore 25 lakh on the company, the Directors of the company including the petitioner were also debarred from receiving any import license, customs clearance permits, etc. for a period of two years. Certain orders were also passed against the Directors of the company. Appeals were filed by the Directors of the company against the orders passed by respondent no.2, however, the same were dismissed. Directors of the company thereafter filed separate petitions to challenge the orders passed in appeal as well as the original order passed by respondent no.2.

(2.) One of these petitions being Civil Writ No.3448/99 had earlier come up for hearing before a Bench of this Court and by judgment passed in Civil Writ No.3448/1999 L.P. Desai Versus UOI and others on 07.7. 2003, this Court in the petition of the other Director of the company allowed the said writ petition and quashed the aforesaid two orders dated 27.7.1995 / 7.8.1995 passed by respondent no.2 and the appellate order dated 13.8.1995 insofar it had imposed penalty on the Directors of the company including the petitioner. Since penalty was imposed on all the directors of the company by a common order dated 27/07/1995/ 7/08/1995 and the aforesaid order having been quashed, as aforesaid, I do not see any reason to differ with the aforesaid judgment dated 7.7. 2003. I am even otherwise satisfied that the orders of penalty, etc. could not have been passed against the directors of company as not only that show cause notice was not given to the directors but the opportunity of hearing was also not given before passing the impugned order. The said orders, therefore, cannot be sustained.

(3.) Though, it is also the contention of learned counsel for the petitioner that since import duty had been paid pursuant to the orders of the Gujrat High Court and it was not a duty free import, they were not under any obligation to export the end product under Duty Drawback Scheme, however, since I have already held that the impugned order cannot be sustained, I have not considered it necessary to deal with this contention of the petitioner.