2018 (6) TMI 1747 - HC - Customs

Seeking grant of Export Promotion Capital Goods (EPCG) Licence - manipulated copies of shipping bills - request before the authority for settling the matter by depositing the entire amount before the Settlement Commission - HELD THAT - Four months' time is granted to the petitioner to approach the Settlement Commission and deposit the entire amount either in one lumpsum or in installments of which, the first installment has already been paid by the petitioner to the tune of ₹ 20,00,000/- and the balance amount shall be paid within four months as assured by the petitioner, from the date of receipt of a copy of this order, failing which, it is open to the respondents to pass orders in accordance with law by following the procedures laid down. Matter remanded back to the first respondent for fresh consideration.

Summary

Issues:
Grant of Export Promotion Capital Goods (EPCG) Licence, discrepancies in fulfilling obligations, investigation by respondent Department, seizure of imported machines, non-payment of import duty, show cause notice under Customs Act, 1962, request for time to approach Settlement Commission, violation of principles of natural justice, personal hearing, request for settlement, health and factory incident affecting compliance, granting time to approach Settlement Commission, setting aside impugned order, remanding matter for fresh consideration.

Analysis:

The petitioner, a manufacturer and exporter of cotton yarn, applied for an Export Promotion Capital Goods (EPCG) Licence and fulfilled obligations. However, discrepancies were found by the respondent Department, leading to an investigation and seizure of imported machines due to alleged manipulation of shipping bills. A show cause notice was issued for non-payment of import duty, with penalties under the Customs Act, 1962. The petitioner requested time to approach the Settlement Commission, but the respondent passed an order without granting sufficient time, violating principles of natural justice.

The High Court observed that the respondent's hasty decision without considering the petitioner's request for an extension of time was a breach of natural justice. Citing a Supreme Court judgment, it emphasized the necessity of a personal hearing before passing final orders. The petitioner's plea for settlement by depositing the entire amount before the Settlement Commission was considered, especially in light of health issues and a factory incident causing significant losses, which impacted compliance.

In light of the circumstances, the Court granted the petitioner four months to approach the Settlement Commission and deposit the outstanding amount, with the first installment already paid. The impugned order was set aside, and the matter was remanded to the respondent for fresh consideration, ensuring due process and fairness in the proceedings. The Court's decision aimed to balance the petitioner's situation with the legal obligations, providing a reasonable opportunity for compliance while upholding the principles of natural justice.

This comprehensive analysis of the judgment highlights the key issues involved, the legal reasoning applied by the Court, and the ultimate decision to set aside the impugned order and grant the petitioner a fair opportunity to address the allegations and fulfill the obligations under the Customs Act, 1962.