2016 (1) TMI 417 - HC - Customs

Disposal of SCN without adjudicating on payment of sum by the petitioner - In the Writ petition, a direction is sought to validate the SFIS scrip availed by the petitioners and to refund a sum of ₹ 89,95,627/- as deposited by the petitioners alongwith interest - Held that - The show cause notice dated 27th March 2008 shows that the Respondents and particularly the Director General of Foreign Trade claims certain amounts. They have closed the file which without any adjudication order or decision but because of the act of the petitioners paying certain sums. To our mind, the continued retention of the sums or whether they were at all payable are matters to be decided in accordance with law and based on the allegations in the show cause notice. The Competent Authority cannot avoid the legal responsibility. We would therefore direct the Competent Authority viz. the Joint Director of Foreign Trade, Ministry of Commerce, Union of India to give a personal hearing to the petitioners on the two show cause notices dated 27th March 2008 and pas a reasoned order thereon as expeditiously as possible and within a period of four months from the date of receipt of copy of this order.

Summary

Issues:
1. Petition seeking to quash a decision of the Policy Interpretation Committee and withdraw a letter.
2. Validating SFIS scrip and refunding a deposited amount with interest.
3. Interpretation of the foreign trade policy.
4. Adjudication of show cause notices by the Competent Authority.
5. Legal responsibility in determining payable sums.

Analysis:
The Petition filed sought to quash a decision of the Policy Interpretation Committee and withdraw a letter issued in accordance with that decision. It also requested validation of SFIS scrip and refund of a deposited amount along with interest. The counsel for the petitioners highlighted a Division Bench judgment related to the Scheme - SFIS and the foreign trade policy of 2009-2014. The Court in the earlier judgment observed that any past recovery is unsustainable, thereby restraining authorities from recovering any sums.

Regarding the show cause notices dated 27th March 2008, the Competent Authority was directed to adjudicate them. The Respondent argued that the petitioners voluntarily paid the sums and thus cannot seek a refund. However, the Court emphasized that the issue of payable sums must be determined in accordance with the law, and the Competent Authority cannot avoid this responsibility. The Court directed the Competent Authority to give a personal hearing to the petitioners on the show cause notices and pass a reasoned order within four months, disregarding any statements made in the affidavit.

In conclusion, the judgment focused on the need for proper adjudication of the show cause notices and the determination of payable sums in accordance with the law. The Competent Authority was directed to act expeditiously and independently in this matter, ensuring a fair process for all parties involved.