LANVIN SYNTHETICS PRIVATE LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) By this Writ Petition filed under Article 226 of the Constitution of India, the petitioners are seeking the following reliefs :-

(2.) Since the earlier order has been complied with and an affidavit in reply has been filed, so also the petitioners proceeding on the basis of denials that we dispose of this Writ Petition by consent of the parties finally. Hence, Rule. Respondents waive service. By consent heard forthwith.

(3.) The petitioners complain that the first petitioner procured yarn and grey fabric from the local market which was sent to different dyeing firms for processing. After processing, the fabrics were cut and packed for export under the DEEC scheme or the Drawback scheme. The exports were handled by one export house agent known as M/s. Amol Shipping Agency. The first petitioner obtained 33 advance licences on the condition that the fabrics would be exported. The claim of the petitioners is that this obligation was completed and fulfilled. The licences were made freely transferable. The licences were, then, sold to various independent parties in the market. The parties obtaining the licences utilised them by importing materials without payment of duty. An investigation was carried out sometime in August, 1995. The second petitioner was arrested but directed to be released on bail on 4-9-1995. During this period, many accused in similar cases were detained vide detention orders under the COFEPOSA. Since the petitioners were apprehending arrest of the second petitioner, they deposited a sum of Rs. 2,07,57,074/- under protest between 13-5-1996 to 27-5-1996. The second respondent eventually issued a show cause notice dated 13-3-1997 alleging that the first petitioner had been issued advance licences with the condition that they would export polyester/viscose blended fabrics. It was alleged that the second petitioner in collusion with Ashok Pokharkar of M/s. Amol Shipping Agency furnished copies showing incorrect/manipulated or false information regarding quantities, weight, composition of export goods. Thus, they wrongfully availed of the benefits of the licences by claiming fulfilment of export obligation. They secured a bond waiver and further obtained endorsement in respect of 33 advance licences making them freely transferable. Since these advance licenses were sold to various parties who imported goods from several countries without payment of duty, there was a loss caused to the exchequer and that is why a show cause notice was issued demanding a sum of Rs. 2,83,59,851/- and to be adjusted against the deposit.