V.M. MOHANAN Vs. UNION OF INDIA

JUDGEMENT

(1.) Ext.P3 order issued by the second respondent under Section 13 of the Foreign Trade (Development and Regulation) Act, 1992 (the Act), is under challenge in the writ petition.

(2.) The facts relevant are the following. The petitioners were two of the directors of the third respondent company, formerly named as Agreen Hashco Private Limited (the company). They have resigned from the directorship of the company with effect from 31.03.2004. It is stated by the petitioners that after they ceased to be the directors, the company obtained an Export Promotion Capital Goods (EPCG) licence for import of capital goods for a duty saved value of Rs.1,56,10,416/- subject to the usual condition that the company shall export goods worth eight times the duty saved value of capital goods within a period of eight years and imported the capital goods on that basis. The company has, however, not discharged its export obligation in terms of the licence. Consequently, proceedings have been initiated by the second respondent against the company for realisation of the import duty and penalty in terms of the provisions of the Act and issued Ext.P3 order for the said purpose. In terms of Ext.P3 order, the company and its directors were called upon to pay Rs.3,12,20,832/-, by way of fiscal penalty. A copy of Ext.P3 was forwarded by the second respondent to the petitioners also along with the directors of the company for compliance. The case set out by the petitioners in the writ petition was that as they ceased to be the directors of the company before the licence referred to in Ext.P3 was applied for and obtained by the company, they have no liability whatsoever to pay the import duty and penalty made mention of in Ext.P3 order. The petitioners, therefore, challenge Ext.P3 order in this proceedings under Article 226 of the Constitution of India.

(3.) A counter affidavit has been filed by the second respondent, contending among others, that for making an import, an importer-exporter code has to be obtained under Section 7 of the Act; that the company has obtained importer-exporter code on an undertaking that they would inform the competent authority as and when the constitution of the company changes; that the petitioners were directors of the company at the time when it obtained the importer/exporter code; that the change in the directorship of the company was not informed by the company to the competent authorities under the Act and therefore in so far as the petitioners were directors of the company when the company obtained the importer-exporter code and in so far as the change in the directorship of the company was not informed by the company to the competent authority under the Act, the petitioners are liable to pay the duty and penalty made mention of in Ext.P3 order. It was also contended by the second respondent in the counter affidavit that the petitioners have an effective alternative remedy by way of appeal against orders in the nature of Ext.P3 and the writ petition is, therefore, not maintainable.