2014 (11) TMI 1260 - HC - Customs

Non-fulfilment of export obligation - failure to furnish the bank guarantee - Section 4I of the Imports and Exports (Control) Act, 1947 read with Section 20(2) of the Foreign Trade (Development and Regulation) Act, 1992 - HELD THAT - Indisputably, the bank guarantee was furnished by the petitioner prior to the order dated 13.10.1997 passed by the Appellate Authority and as such the said order is erroneous. The learned counsel for the respondent argued that the petition is barred by delay and latches as the petitioner has approached this Court after over 15 years. However, in the peculiar facts and circumstances of this case, where there is no evidence that the order dated 13.10.1997 was served on the petitioner and it is clear - by the fact that the bank guarantee had been kept alive by the petitioner - that the petitioner continued in its belief that its appeal was pending, the delay is liable to be condoned. It is deemed appropriate that the order dated 13.10.1997 of the Appellate Authority be set aside and the matter be remanded to the Appellate Authority to decide it afresh in accordance with law - petition disposed off.

Summary

Issues:
1. Opportunity to meet allegations by respondent authorities.
2. Imposition of penalties without opportunity to defend.
3. Show cause notice under Section 4L.
4. Imposition of penalty and debarment from availing import license.
5. Appeal before the Appellate Authority.
6. Requirement of furnishing a bank guarantee.
7. Disposal of appeal despite furnishing bank guarantee.
8. Non-communication of the order to the petitioner.
9. Affidavit regarding the bank guarantee extension.
10. Argument of delay and latches by respondent.
11. Setting aside the order and remanding the matter.

Analysis:
The petitioner filed a petition seeking to set aside an Award and Appellate Award dismissing their appeal and directing the respondents to pay the claimed amounts with interest. The petitioner alleged they were not given an opportunity to defend against allegations by the authorities, leading to penalties. A show cause notice was issued, and subsequently, a penalty of Rs. 50 lakhs was imposed along with debarment from import licenses for failing export obligations. The petitioner appealed this decision, fulfilling the condition of furnishing a bank guarantee. However, the appeal was erroneously disposed of on grounds of non-furnishing of the bank guarantee, despite the petitioner having done so. The petitioner, unaware of this decision, later affirmed the bank guarantee's extension till 2016.

During the proceedings, the petitioner submitted an affidavit confirming the bank guarantee extension. The court noted that the appeal's disposal was erroneous as the bank guarantee was provided before the impugned order. The respondent argued delay and latches in approaching the court after 15 years. However, considering the circumstances where the order was not served, and the bank guarantee was maintained, the delay was condoned. Consequently, the court set aside the Appellate Authority's order and remanded the matter for fresh consideration in compliance with the law. The petitioner was directed to appear before the Appellate Authority on a specified date. The petition and pending application were disposed of with these directions.