2019 (9) TMI 1491 - HC - Customs

Recovery of DEPB benefit for the past period - representations made by the petitioners are pending before the concerned authority for consideration - HELD THAT - A careful perusal of the impugned show causes notices as per Annexures-C, C1 and C2 issued by the second respondent directing the petitioners to appear before the concerned Deputy Director General of Foreign Trade, by filing objections and also advised to appear after seeking appointment through telephone or by sending an e-mail, well in advance and the notice also depicts that the notice is issued without prejudice to any other action contemplated against the petitioners and its Directors/Partners/Proprietors under Foreign Trade (Development and Regulation) Act, 1992 or Rules issued thereunder - If the petitioners are aggrieved by the impugned notices, they ought to have filed objections before the second respondent and it is for the second respondent to consider the objections and verify as to whether the decision of the PIC to exclude fish meal and fish oil from the scope of DEPB scheme under the Foreign Trade Policy, is in accordance with law. Before approaching the authority concerned, the petitioners are before this Court challenging the impugned show cause notices. It is well settled that the writ petitions challenging the show cause notices are not maintainable and it is for the petitioners to file objections and show cause to the second respondent as to how they are not liable to pay the duty credit - Admittedly, except the representation dated 21-10-2014, vide Annexure-D, petitioners have not filed objections to the impugned show cause notices. Therefore, the present writ petitions are not maintainable. In view of the above, it is suffice to direct the petitioners to file objections to the impugned show cause notices vide Annexures-C, C1 and C2 issued by the second respondent, within a period of six weeks from the date of receipt of certified copy of this Order - Petition disposed off.

Summary

Issues:
1. Challenge to show cause notices for quashing proceedings.
2. Interpretation of DEPB scheme for fish oil and fish meal.
3. Violation of Article 14 of the Constitution of India.
4. Maintainability of writ petitions due to appellate process not exhausted.

Analysis:
1. The petitioners sought to quash proceedings initiated under show cause notices related to Duty Exemption Pass Book (DEPB) benefits. They claimed duty credit for fish oil and fish meal exports under the Foreign Trade Policy. The Policy Interpretation Committee's decision to exclude fish oil and fish meal from DEPB benefits post-November 2009 led to denial of benefits to the petitioners. Despite representations to authorities, including the Minister of Commerce and Industries, no action was taken, resulting in demand notices for DEPB credit recovery. The petitioners argued that the notices violated Article 14 of the Constitution due to promissory estoppel.

2. The respondents contended that the show cause notices were appealable under the Foreign Trade (Development and Regulations) Act, making the writ petitions non-maintainable. The petitioners had not availed the statutory appellate process. The petitioners' counsel argued that the retrospective effect of the PIC's interpretation on DEPB scheme was unjust and against natural justice principles.

3. The petitioners emphasized their engagement in fish oil and fish meal business and the ongoing representations to restore DEPB benefits since 2009. The impugned notices sought to recover DEPB benefits for the past period while the representations were pending for consideration. The court noted the respondents' directions for the petitioners to file objections and appear before the Deputy Director General of Foreign Trade.

4. The court found that the writ petitions challenging the show cause notices were premature as the petitioners had not filed objections except for a representation dated 21-10-2014. The court directed the petitioners to file objections within six weeks and restrained the respondents from taking precipitative action until such objections were considered. The stay on the show cause notices was maintained until the objections were reviewed and appropriate orders passed.

This comprehensive analysis covers the issues raised in the legal judgment, detailing the arguments presented by both parties and the court's final directives.