TAARIKA EXPORT Vs. UNION OF INDIA

JUDGEMENT

(1.) This order will dispose of the writ petition filed by the petitioners to challenge the order dated 13th November, 1995 passed by the Additional Director General of Foreign Trade imposing a penalty of Rs.45 lacs on the petitioners for their having failed to fulfill the export obligations and thus contravening Section 4-I(1)(a) of the Import and Export (Control) Act, 1947 as also the order dated 12th August, 1997 passed in appeal by the Appellate Committee. A few facts relevant for deciding this petition are :-

(2.) The petitioners requested for amendment of the advance licence on 21st February, 1992 as they intended to import only Dupion Yarn 1100 Kgs. and mulberry raw silk of 250 Kgs. and did not intend to import the fusing lining material of CIF value of US $ 6,750. The petitioners committed to fulfill the export of the resultant product for a FOB value of US $ 41,603.66. The request of the petitioner was considered by the office and on 31st March, 1992 the licence was, accordingly, amended. The petitioner failed to fulfill its export obligations inasmuch as against 5400 Nos. of mulberry mixed raw silk jackets/blazer, the petitioner could export only 2429 Nos. of mulberry mixed silk garments and there was a shortfall in the export obligations to the tune of Rs.27,20,462/-. On 22nd December, 1992 petitioners made a request for grant of extension of six months to enable them to export the balance quantity by April 30, 1993. As the export obligations could not be fulfilled even upto that period, the petitioners again approached for extension of time to fulfill its export obligations but the petitioners' request was rejected and on 29th December, 1994 the petitioners were asked to produce documents/information in respect of the advance licence. The petitioners, however, failed to send the requisite information/documents. A show cause notice dated 2nd May, 1995 was, accordingly, issued in the exercise of powers under Section 4-K of the Import and Export (Control) Act, 1947 and clause 8 of the Imports (Control) Order 1955 requiring the petitioners to show cause under Section 4-L of the Act and under clause 10(1) of the aforesaid order as to why penalty be not imposed upon them under Section 4-I(1)(a) of the said Act and why the petitioners be not debarred from importing any goods, receiving import licence and allotment of imported goods through STC/MMTC or any other similar agency under clause 8(1) of the Imports (Control) Order 1955 readwith Section 20(2) of the Foreign Trade (Development and Regulation) Act, 1992. Section 4-I(1)(a) of the Import and Export (Control) Act, 1947

(3.) In the show cause notice it was stated by the respondents that "as you have failed to fulfill the remaining export obligation imposed under the said licence, there are, prima facie, reasons to believe that the duty free imported goods valued at Rs.9,10,125/- (CIF) have been utilised by you and also failed to fulfill the balance export obligation for fob value of Rs.27,20,462/- within stipulated time and thus violated the conditions of advance licence/LUT". Reply to the show cause notice was filed by the petitioner on 14th June, 1995. After giving personal hearing to the petitioners, the Additional Director General of Foreign Trade passed the order dated 13th August, 1995 and considering the shortfall in export to the tune of Rs.27,20,462/-, he held the petitioners guilty of contravening Section 4-I(1)(a) of the Imports and Exports (Control) Act, 1947 read with Section 20(2) of the Foreign Trade (Development and Regulation) Act 1992 and clause 8(1)(f) and (g) of the Imports (Control) Order, 1955 and in exercise of the powers under Section 4-K of the Imports Exports (Control) Act and penalty of Rs.45 lacs was imposed upon the petitioner No.1 firm and its partners. This order was challenged by the petitioners by filing an appeal before the Appellate Committee. After hearing arguments of learned counsel for the petitioners, the Appellate Committee by its order dated 12th August, 1997 rejected the appeal. Aforesaid two orders, namely, the order dated 13th August, 1995 passed by the Additional Director General of Foreign Trade and the order dated 12th August, 1997 passed by the Appellate Committee of the Ministry of Commerce, Government of India are now challenged by the petitioners by filing the present writ petition.