2003 (5) TMI 311 - Other - Customs

Summary

Issues:
1. Failure to fulfill Export Obligation under an Advance License.
2. Imposition of penalty on the company and its directors.
3. Interpretation of Public Notice for regularizing cases of bona fide default.
4. Consideration of the firm's status as a sick company under BIFR.
5. Decision on withdrawal of Show Cause Notice.

Issue 1: Failure to fulfill Export Obligation under an Advance License
The case involved M/s. New Great Eastern Spinning & Weaving Co. Ltd. failing to meet the Export Obligation (EO) as stipulated in an Advance License obtained for the import of Polyester Filament Fiber. Despite a specified fob value and a deadline of 6 months, the firm did not fulfill the EO, leading to the issuance of a Show Cause Notice under relevant legal provisions.

Issue 2: Imposition of penalty on the company and its directors
Following the failure to meet the EO, an Adjudicating Order was passed by the predecessor, levying a penalty of Rs. 25 lakhs on the company and its directors. However, this order was set aside by the Appellate Committee Cell, directing a reevaluation and providing the firm with an opportunity for a hearing before the Addl. DG.

Issue 3: Interpretation of Public Notice for regularizing cases of bona fide default
The matter was further examined in light of a Public Notice issued to regularize bona fide default cases under Advance Licenses. The firm made submissions and demonstrated efforts to rectify the shortfall in EO, leading to subsequent exports to achieve 100% EO fulfillment, exceeding the original prescribed value.

Issue 4: Consideration of the firm's status as a sick company under BIFR
The firm's representation highlighted its status as a sick company under the Board for Industrial and Financial Reconstruction (BIFR), emphasizing that it had met the EO requirements both in value and quantity terms. The advocate argued for the firm's eligibility for benefits under the Public Notice to rectify the quantity shortfall.

Issue 5: Decision on withdrawal of Show Cause Notice
After considering the firm's circumstances, including its efforts to rectify the default and the spirit of the Public Notice aimed at granting relief, the Addl. DG decided not to impose a penalty. The Addl. DG withdrew the Show Cause Notice dated 19-2-1993, acknowledging the firm's subsequent efforts to fulfill the EO and regularize the situation, despite the technicalities involved in the case.