O T ENASU Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner was the Managing Director of a Company, which had set up a unit in the Cochin Export Processing Zone for manufacture of certain equipments for cent percent export. On the basis of the relevant notifications, the Company was entitled to import capital goods and claim benefit of duty exemption on proof of total export. With the passage of time, the business of the Company fell and it went into liquidation.

(2.) In the mean while, the customs authorities issued a notice to show cause against confiscation, in terms of S.111(o) of the Customs Act, 1962, hereinafter referred to as 'the Act', and in terms of the bond executed by them and also against imposition of penalty, on the Company and its directors under S.112 of the Act. This was on the premise that the Assistant Commissioner of Customs had reported that neither the capital goods nor the raw materials and other goods were used in the production of goods for export in terms of Notification No. 340/86 dated 13/06/1986 and in terms of the bond executed by the Company.

(3.) By the impugned Ext. P1, an order of confiscation of the goods was issued invoking S.111(o) of the Act. No opportunity was extended to the directors of the Company to redeem the goods, because, the Commissioner of Customs concluded that the directors did not show any interest in redeeming the goods on payment of fine and appropriate duty. However, stating no reasons whatsoever, the Commissioner also imposed a penalty of Rupees One Lakh on the writ petitioner, the Managing Director of the Company, under S.112 of the Act. On the premise that they were not actually involved in the management of the Company, penalty was not imposed on the other directors.