2017 (9) TMI 137 - HC - Customs

Principles of Natural Justice - EPCG scheme - in spite of granting extension of time for fulfilling the export obligations, the writ petitioner/Firm has failed to discharge those obligations satisfactorily - It is contended before us that the show cause notice has been drawn by a Superior Officer, viz., the Joint Director General of Foreign Trade, whereas, the order-in-original has been passed by the inferior Agency, called Deputy Director General of Foreign Trade - Held that - matter remitted back for consideration afresh by the Joint Director General of Foreign Trade, who drew the show cause notice, dated 31.12.2013, for the simple reason that, a Superior Agency cannot initiate quasi-judicial proceedings, and an inferior Agency cannot finalize the same. The provisional conclusion arrived at by a particular Authority must necessarily be considered, when responded to by the same Authority. The inferior Authority cannot consider the explanation and make up his mind for and behalf of his superior agency - appeal allowed by way of remand.

Issues:
1. Appeal against judgment and order dismissing writ petitions preserving liberty to approach Appellate Authority.
2. Failure to fulfill export obligations despite duty concession.
3. Violation of principles of natural justice due to different authorities issuing show cause notice and order-in-original.
4. Authority of Deputy Director General of Foreign Trade to pass order-in-original.
5. Payment of duty and interest by the writ petitioner/Firm.
6. Power conferred on Foreign Trade Development Officer to deal with goods up to a certain value.

Analysis:

1. The judgment involves appeals against a judgment and order dismissing writ petitions while allowing the petitioners to approach the Appellate Authority. The writ petitioners were aggrieved by orders passed by the Deputy Director General of Foreign Trade, Coimbatore, regarding export obligations.

2. The writ petitioners failed to fulfill export obligations despite being granted extensions. The duty concession was subject to meeting export obligations, leading to the authorities taking action against the writ petitioner/Firm.

3. The violation of principles of natural justice was highlighted due to different authorities issuing the show cause notice and the order-in-original. The Superior Officer issued the show cause notice, while the order-in-original was passed by the Deputy Director General of Foreign Trade, leading to a clear breach of natural justice principles.

4. The authority of the Deputy Director General of Foreign Trade to pass the order-in-original was questioned, considering the value of goods involved. The Central Government's notification empowered the Deputy Director General to deal with goods below a certain value, justifying the authority's decision in this case.

5. The payment of duty and interest by the writ petitioner/Firm was a crucial aspect of the case. The Commissioner of Customs confirmed the remittance of duty and interest, providing evidence of the payments made by the writ petitioner/Firm.

6. The power conferred on the Foreign Trade Development Officer to deal with goods up to a specific value was discussed. The Assessing Officers, including the Joint Director General of Foreign Trade, were authorized to proceed against the writ petitioner based on the evidence of duty and interest payment provided.

In conclusion, the judgment set aside the order-in-original due to the violation of natural justice principles but allowed further proceedings based on the payment of duty and interest by the writ petitioner/Firm. The case highlighted the importance of following due process and fulfilling obligations under duty concessions.

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