2017 (9) TMI 685 - HC - Customs

Suspension of operation of the Importer-Exporter Code Numbers - Foreign Trade (Development and Regulation) Act 1992 - Held that - though the power is conferred on the Director General to suspend the code numbers. However, before any order is passed, the person who is likely to be affected should be informed by notice in writing on the ground on which it is proposed to suspend or cancel the importer-exporter code numbers and also should be given a reasonable opportunity for making a representation in writing. There is no dispute that before the impugned orders are passed, the petitioners were not given the opportunity. The petitioners does not have any information as to what transpired after the above interim order, whether any enquiry was conducted or investigation was completed - For all these years, no counter affidavit has been filed by the respondent/Department, and therefore, the impugned order cannot be given effect to at this juncture, having been kept in abeyance from 2006 - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Suspension of Importer-Exporter Code Numbers without proper notice and opportunity for representation.
2. Compliance with the provisions of the Foreign Trade (Development and Regulation) Act, 1992.
3. Validity of interim injunction and keeping impugned orders in abeyance pending investigation.

Analysis:
1. The petitioners challenged the orders suspending their Importer-Exporter Code Numbers, arguing a violation of the Foreign Trade (Development and Regulation) Act, 1992. The Court highlighted Section 8 of the Act, emphasizing the necessity for informing the affected party in writing and providing a reasonable opportunity for representation before suspending or canceling the code numbers. It was noted that the petitioners were not given this opportunity before the impugned orders were passed, rendering the orders unsustainable.

2. The respondent justified the suspension citing fraudulent activities by the petitioners and an ongoing investigation. The Court acknowledged the seriousness of the complaint but emphasized the importance of following due process under Section 8(b) of the Act. Despite the allegations, the Court ruled that the impugned orders could not stand due to the lack of proper procedure followed. An interim direction was given to keep the orders in abeyance until the completion of the investigation and issuance of final orders. The respondent was permitted to proceed with the investigation while ensuring compliance with legal requirements.

3. The Court noted the lack of information on the progress of the investigation post the interim order. However, it was emphasized that the impugned orders remained stayed since 2006 due to the absence of a counter affidavit from the respondent. The Court disposed of the Writ Petitions with no costs, allowing the respondent to continue the investigation if still pending. The judgment highlighted the importance of adhering to procedural fairness and legal requirements in matters of suspension or cancellation of Importer-Exporter Code Numbers under the Act.