2011 (8) TMI 1330 - HC - Customs

Summary

Issues Involved:
1. Quashing of the impugned orders.
2. Acceptance of exports towards discharge of export obligation.
3. Prohibition of action against the petitioner for non-fulfillment of export obligation.
4. Imposition of penalty and suspension of IEC.
5. Combination of DEPB and Advance License schemes.

Summary:

Issue 1: Quashing of the Impugned Orders
The petitioner sought a writ of certiorari to quash the order dated 26.9.2007 and the subsequent order dated 21.2.2008 confirming the duty of Rs. 80,62,950/- along with interest and penalty. The court found that the authorities did not apply their mind properly and denied the benefit under the DEPB scheme without justification. The orders passed by the Original Authority and the Appellate Authority were set aside.

Issue 2: Acceptance of Exports Towards Discharge of Export Obligation
The petitioner requested the respondents to accept the exports effected directly or through a third party towards the discharge of the export obligation under three Advance Licenses. The court directed the respondents to accept the exports towards the fulfillment of export obligation under the impugned advance licenses and the benefit of DEPB claimed against the said exports.

Issue 3: Prohibition of Action Against the Petitioner for Non-Fulfillment of Export Obligation
The petitioner sought a writ of prohibition to prevent the respondents from taking any action against them for non-fulfillment of export obligation on the grounds that the benefit of DEPB was also claimed. The court found that there was no prohibition in law to avail the benefit under DEPB scheme even after opting for Advance License Scheme when no raw material was imported under the Advance License Scheme.

Issue 4: Imposition of Penalty and Suspension of IEC
The petitioner challenged the imposition of a penalty of Rs. 280 lakhs and the suspension of their IEC. The court found that the cancellation of the IEC and the suspension of the Advance License were arbitrary and illegal. The respondents were directed to restore the Import and Export Code of the petitioner and withdraw the cancellation of the Advance License.

Issue 5: Combination of DEPB and Advance License Schemes
The petitioner argued that they had not availed any benefit under the Advance License Scheme for raw materials and were entitled to the DEPB scheme. The court held that the petitioner was entitled to the DEPB scheme as they had not imported any raw material other than fuel under the Advance License Scheme. The court found that the objection that originals were not produced was contrary to law and could not be sustained.

Order:
(i) Writ Petitions are allowed.
(ii) The impugned orders passed by the Original Authority and the Appellate Authority are set aside.
(iii) A writ of mandamus is issued directing the respondents to accept the exports towards the fulfillment of export obligation under the impugned advance licenses and the benefit of DEPB.
(iv) Respondents are directed to restore the Import and Export Code of the petitioner and withdraw the cancellation of the Advance License.
(v) All amounts received in terms of the impugned orders shall be refunded to the petitioner forthwith.