2010 (7) TMI 326 - HC - Customs

Waiver of pre-deposit penalty non-fulfillment of export obligation obligation fulfilled within extended period of time Held that - delay in not being able to produce the proof of such export obligation was on account of the delay with the customs authorities for which the petitioner cannot be blamed - Waiver of pre-deposit allowed

Summary

Issues involved:
Prayer for issuance of a Writ of Mandamus to direct disposal of main appeal without bank guarantee.

Analysis:

1. Background and Export Obligation:
The petitioner secured an order from U.A.E. for the export of school bags and approached the 2nd respondent for an advance license to import goods. The license permitted the import of Nylon cloth with an export obligation. Despite submitting evidence of compliance, a show cause notice was issued alleging non-fulfillment of the export obligation.

2. Imposition of Penalty and Appeal:
Following the notice, a penalty equivalent to customs duty was imposed on the imported material along with a personal penalty. The petitioner appealed under the Foreign Trade Act and sought to dispense with the pre-deposit requirement. The petitioner then filed a writ petition to direct the disposal of the appeal without insisting on a bank guarantee.

3. Interim Order and Dispute:
An interim order directed the petitioner to pre-deposit 25% of the penalty within a specified time, failing which the appeal would be rejected. The petitioner argued that the DEEC book endorsement proved fulfillment of the export obligation, warranting a waiver of the pre-deposit.

4. Court's Decision and Reasoning:
The court noted the delay by customs authorities in endorsing the DEEC book, leading to the petitioner's inability to produce proof timely. The court found the respondent's approach untenable and held that the petitioner had satisfied the export obligation. It was emphasized that the petitioner should not be blamed for the delay caused by customs authorities. Consequently, the court allowed the writ petition, set aside the pre-deposit condition, and directed the respondent to consider the appeal on merits without delay.

5. Final Outcome:
The writ petition was allowed, the pre-deposit condition was waived, and the respondent was instructed to consider the appeal expeditiously and in accordance with the law. No costs were awarded, and the connected Miscellaneous Petition was closed, bringing the matter to a resolution.