2006 (12) TMI 22 - HC - Customs

Penalty Alleged that appellant were not able to fulfill his export obligation and accordingly liable for penalty Penalty were demanded after 14 years of default After considering the details penalty were set aside by adjudicating authority

Summary

Issues Involved:
1. Legality of the penalty imposed after a significant delay.
2. Compliance with export obligations under the Advance Licence.
3. Validity of the show cause notice and subsequent proceedings.
4. Double jeopardy claim by the petitioner.

Detailed Analysis:

1. Legality of the Penalty Imposed After a Significant Delay:
The petitioner argued that the penalty imposed after 15 years was unjustified. The court referenced several judgments to support the principle that power must be exercised within a "reasonable time" when no specific time limit is prescribed by statute. Notable cases cited included:
- Government of India v. Citedal Fine Pharmaceuticals: Emphasized that in the absence of a prescribed period, action must be taken within a reasonable time.
- State of Gujarat v. Patel Raghav Natha: Highlighted that revisional powers should be exercised within a few months.
- Ibrahimpatnam Taluk Vyavasaya Collie Sangham: Interpreted "at any time" to mean within a reasonable period.
- State of HP v. Rajkumar Brijender Singh: Stated that suo motu power must be exercised within a reasonable time to avoid undoing final decisions.

The court concluded that the penalty imposed after 14 years was not justified and quashed the impugned orders.

2. Compliance with Export Obligations Under the Advance Licence:
The petitioner was granted an Advance Import Licence to import 25 MT of Acrylic fibre with an obligation to export garments. The petitioner imported 20 MT but failed to fulfill the corresponding export obligation within the stipulated period. Despite extensions, the petitioner only met 28% of the obligation. The adjudicating authority noted the failure to furnish necessary documents and the export proceeds realization certificate, which invalidated the claimed exports.

3. Validity of the Show Cause Notice and Subsequent Proceedings:
A show cause notice was issued on 9-8-2000, proposing a penalty for default in fulfilling the export obligation. The adjudicating authority imposed a penalty of Rs. 5,00,000/- on 30-6-2003, which was upheld on appeal. The court found that the delay in issuing the show cause notice and the subsequent imposition of the penalty was unreasonable, referencing cases where delays of similar nature were deemed unjustifiable.

4. Double Jeopardy Claim by the Petitioner:
The petitioner contended that they had already been penalized by debarment and that the current proceedings constituted double jeopardy. The adjudicating authority rejected this claim, stating that the debarment was under the Imports (Control) Order, 1955, while the current proceedings were under the Imports and Exports (Control) Act, 1947. The court did not find merit in the double jeopardy claim, aligning with the adjudicating authority's reasoning.

Conclusion:
The court allowed the writ petition, quashing the impugned orders due to the unreasonable delay in imposing the penalty. The court emphasized that while the petitioner committed a default, the authorities must act within a reasonable time frame, and the delay of 14 years was not justified.