2009 (6) TMI 614 - HC - Customs

EXIM Adjudication by JDGFT - order under appeal was passed by the Joint Director General of Foreign Trade and the appeal was pending - appellate authority remitted the matter back to the Joint Director General of Foreign Without appropriate modification of the order of the appellate authority, there could be no question of any other authority hearing the case Notice set aside and quashed

Summary

Issues:
Challenge to notice of personal hearing issued by Deputy Director of Foreign Trade, Cuttack.

Analysis:
The petitioner, engaged in maritime transport services, received duty credit entitlement under the foreign trade policy for the years 2004 to 2009. The respondent introduced a scheme of duty-free credit entitlement, which the petitioner availed through a license. However, discrepancies arose regarding the calculation of duty credit entitlement, involving foreign inward remittances through different channels. Subsequently, a show-cause notice was issued alleging inflated turnover, leading to penalties and refund orders against the petitioners and their directors.

The petitioners appealed under the Foreign Trade (Development & Regulation) Act, 1992, seeking relief from the penalties imposed. The appellate authority reconsidered the appeal, deciding to dispose of it on merit without pre-deposit of the penalty. The petitioners were granted a personal hearing, and the writ application challenging the pre-deposit order was disposed of accordingly. The appeal was then remitted back for further proceedings, including cross-examination of a chartered accountant.

A notice of personal hearing was issued by the Deputy Director General of Foreign Trade, Cuttack, for the cross-examination. The petitioners objected, citing the remittance of the case to the Joint Director General of Foreign Trade, Kolkata, by the appellate authority. The High Court found the notice improper, as the appeal was pending before the Joint Director General in Kolkata, and set aside the notice, emphasizing the need for proper modification of orders before any other authority could conduct hearings.

The Court clarified that its decision to set aside the notice did not delve into the merits of the claim, and the allegations in the writ petition were not deemed admitted by the respondents. An urgent certified copy of the order was directed to be supplied to the parties upon request.

This judgment highlights the importance of procedural correctness in administrative actions, ensuring that orders and appeals are properly handled by the designated authorities. The Court's intervention aimed to maintain the integrity of the appeal process and uphold fair proceedings in line with the statutory framework governing foreign trade regulations.