M/s.Pradeep Industries, Old.23 v. Additional Director General of

Madras HC8 Feb 2023WP/24834/2015

Case brief

AI extract

What is this about?

This petition was filed under Article 226 of the Constitution of India to quash an appellate order and confirm previous orders imposing penalty for non-utilization of an Export Promotion Capital Goods (EPCG) license. The court found the second order unnecessary as the liability had already been determined. It quashed the impugned order.

What did the court decide?

The impugned orders dated 06.02.2013 and 31.03.2015 were set aside. A demand for the balance penalty was to be raised.

M/s.Pradeep Industries, Old.23 Vs Additional Director… — Customs and Excise | Madras HC (2023)

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W.P.No.24834 of 2015

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 08.02.2023

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CORAM :

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THE HONOURABLE DR.JUSTICE ANITA SUMANTH

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W.P.No.24834 of 2015 M.P.Nos. 1 and 2 of 2015

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M/s.Pradeep Industries, Old No.23, New No.45, Chengalvarayan Street, Triplicane, Chennai – 600 005. Rep. By its Partners.

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1.B.Rameshchand Bohara 2.Vijayraj Bhawarlal Bohara 3.Usha Ramesh Bohara 4.Rachana Bohara 5.Saroja Bohara All residing at No.23/45, Chengalvarayan Street, Triplicane, Chennai – 600 005.

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.. Petitioners

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1.Additional Director General of Foreign Trade, Office of the Director General of Foreign Trade, Udyog Bhavan, New Delhi – 110 001.

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2.Joint Director General of Foreign Trade, No.26, Haddows Road, Shastri Bhavan Annexe, Nungambakkam, Chennai – 600 006.

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3.The Additional Director General of Foreign Trade, No.26, Haddows Road, Shastri Bhavan Annexe, Nungambakkam, Chennai – 600 006. .. Respondents

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https://www.mhc.tn.gov.in/judis

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W.P.No.24834 of 2015

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Petition filed under Article 226 of the Constitution of India praying to issue a writ of certiorari calling for the records pertaining to the impugned order dated 31.03.2015 passed by the first respondent vide his proceedings No.F No.11/454/2012-13/ECAI/935 dismissing the appeal preferred by the petitioners and thereby confirming the order dated 06.02.2013 passed by the 2^nd respondent vide No.04/36/21/54/AM 99 imposing penalty and other directions and quash the same.

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For Petitioners : Mr.R.M.D.Nazarullah

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For Respondents : Mr.Venkataswamy Babu SCGPC

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ORDER

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Heard Mr.R.M.D.Nazarullah, learned counsel for the petitioner and Mr.Venkataswamy Babu, learned SCGPC for the respondents.

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The petitioner was engaged in the business of

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manufacturing and exporting stainless steel utensils. It claims to have ceased operations in the year 2003. During the time when it was carrying on business it had applied for, and was issued a licence under the Export Promotion Capital Goods Scheme (EPCG Scheme) bearing No. 04500410 dated 11.08.1998 for a CIF value of Rs.2,75,340/-.

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W.P.No.24834 of 2015

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The licence carried inter alia an obligation to export

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stainless steel kettles, such obligation to be fulfilled within a period of five years from date of issue of the licence. The petitioner, however, found that it did not need the licence as it had procured the capital goods indigenously, according to it.

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Proceedings came to be initiated under show-cause

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notice dated 06.04.2004 calling upon the petitioner to show cause why action not be initiated under the provisions of the Foreign Trade (Development and Regulation) Act, 1992 for the reason that the export obligations had not been satisfied by it within the time stipulated under the Scheme.

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The petitioner responded pointing out that it had not utilized the licence despite which an order came to be passed on 30.03.2005 to the effect that it was liable for customs duty with penal interest at the rate of 15% for failure to fulfill export obligations against EPCG license.

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The petitioner challenged the above order in first appeal and suffered an order dated 10.09.2007, confirming the demand

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under original order dated 30.03.2005. The petitioner was directed to regularize the export obligation by payment of customs duty with penal interest. On 23.11.2007, the petitioner was duly informed of the liability pursuant to the dismissal of first appeal.

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The petitioner had taken a decision to accept the aforesaid order and remit the duty and by letter dated 22.12.2007 conveyed as such to the respondents in the following terms:-

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“Sub : Customs Duty on EPCG Licence No. 04500410 dated 11.08.1998 Ref : Letter No. F04/36/021/00054/AM99 dated 23.11.2007 of the Foreign Trade Development Officer, Office of ZJDGFT, Chennai – 6.

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Consequent upon the Adjudication Order No. 11/48/07-08/ECA.1 dated 12-09-2007 passed by the Office of the DGFT, New Delhi on the above EPCG Licence, we have been directed by the Foreign Trade Development Office, Office of ZJDGFT, Chennai, vide his aforesaid letter (copy enclosed), to pay the Customs Duty on the said EPCG Licence to the Customs Authorities and to produce the receipt to them immediately.

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In this connection, we request you to kindly inform us immediately the amount of Customs Duty to be paid by us on the said EPCG Licence to enable us to pay the same immediately. We expect to hear from you immediately.

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Thanking you,

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Yours faithfully, Sd/-”

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W.P.No.24834 of 2015

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With this, the chapter relating to EPCG licence, nonutilization and consequent demand, attains finality.

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On 23.1.2008, a reminder to the petitioner was issued by the Foreign Trade Development Officer, of the pending demand. In response, the petitioner on 15.02.2008 sought the exact quantum of amount to be paid, to ensure compliance with the appellate order.

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Here is where the flaw leading to the present litigation has transpired. Instead of simply informing the petitioner as to the quantum of outstanding demand, the officer has passed a second order in original on 06.02.2013. There was absolutely no necessity for the aforesaid order to have been passed as the same cause of action had been addressed vide orders dated 30.03.2005 and 11.09.2007.

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Be that as it may, the petitioner challenged the order in first appeal leading to the passing of the impugned order dated 31.03.2015 by the first appellate authority. Quite apart from being an aberration in procedure, all that the respondents needed to have done was to convey the quantification of duty and penalty to the

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petitioner and ensure its compliance. In fact the petitioner has on all occasions expressed its readiness to pay the amount on being informed of the amount to be paid.

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On 12.08.2015 when this matter had come up for admission, there was an order of interim stay upon condition that the petitioners remit 50% of the penalty within a period of four weeks from the date of receipt of copy of that order. The petitioner has admittedly complied with this order.

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Thus, let a demand be raised for the balance, which the petitioner, in light of its acquiescence as noted in the preceding paragraphs, will settle expeditiously. The impugned orders are clearly in violation of procedure apart from being duplication of the orders already passed, and are hence set aside.

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This writ petition is ordered in the aforesaid terms. No

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costs. Connected miscellaneous petitions are closed.

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08.02.2023

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Index:Yes/No Neutral Citation:Yes ssm

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W.P.No.24834 of 2015

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1.The Additional Director General of Foreign Trade, Office of the Director General of Foreign Trade, Udyog Bhavan, New Delhi – 110 001.

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2.The Joint Director General of Foreign Trade, No.26, Haddows Road, Shastri Bhavan Annexe, Nungambakkam, Chennai – 600 006.

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3.The Additional Director General of Foreign Trade, No.26, Haddows Road, Shastri Bhavan Annexe, Nungambakkam, Chennai – 600 006.

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https://www.mhc.tn.gov.in/judis

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W.P.No.24834 of 2015

DR. ANITA SUMANTH,J.

ssm

W.P.No.24834 of 2015

08.02.2023

https://www.mhc.tn.gov.in/judis

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M/s.Pradeep Industries, Old.23 v. Additional Director General of

Case brief

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M/s.Pradeep Industries, Old.23 v. Additional Director General of

Case brief

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