2018 (1) TMI 837 - HC - Customs

Constitutional Vires of sub-para (i) of paragraph 3 of Notification No. 43(RE-2013) 2009-2014 dated 25th September, 2013 and sub-para (i) of paragraph 2 of Notification No. 44(RE2013) 2009-2014 dated 25th September, 2013 - non-speaking order. Held that - Sub-Section (4) of Section 9 of the Foreign Trade (Development and Regulation) Act, 1992 mandates and requires the authority to pass a reasoned and a speaking order - This is a specific direction of the Court and in case a speaking and a reasoned order is not passed, appropriate directions and orders, adverse comments, including imposition of costs may be required and can be made - the respondents are expected to abide by the said stipulation. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to specific notifications, processing of claim under Incremental Export Incentivization Scheme, compliance with Section 9 of the Foreign Trade Act, requirement of a reasoned order for claim disposal.

Challenge to Notifications:
The petitioners filed a writ petition challenging certain sub-paragraphs in two notifications. However, they withdrew their challenge to the constitutional validity of these sub-paragraphs based on a previous decision. The main prayer was for the respondents to process their claim under the Incremental Export Incentivization Scheme. The petitioners argued that their application for an annual incentive had not been disposed of properly, despite a previous order granting a smaller duty credit. The respondents relied on Section 9 of the Foreign Trade Act, emphasizing the need for a reasoned order in dealing with applications for benefits under the Act.

Compliance with Section 9 of the Foreign Trade Act:
The respondents highlighted Section 9 of the Foreign Trade Act, which empowers the Director General or an authorized officer to suspend or cancel any benefit-granting instrument for valid reasons. The respondents insisted that the petitioner's application must be examined in accordance with this provision. The court stressed the importance of passing a speaking and reasoned order in such cases, citing a previous decision where a similar directive was given. The court emphasized the need for a thorough examination of the application and the requirement to provide a well-reasoned decision.

Requirement of a Reasoned Order for Claim Disposal:
During the proceedings, it was pointed out that a previous petitioner had faced issues with a non-speaking order rejecting their claim, leading to adverse comments from the court. The court reiterated the necessity for a reasoned and speaking order when dealing with such applications. The respondents were reminded of their obligation to comply with this requirement and warned of potential adverse consequences, including costs, if a proper order was not passed. The court directed the petitioner's representative to appear before the Authority for a hearing, with a deadline set for the issuance of a reasoned order.

Conclusion:
The court disposed of the writ petition without costs, issuing a directive for the petitioner's representative to present before the Authority for a hearing. The court mandated the issuance of a speaking and reasoned order on the petitioner's claim under the Incremental Export Incentivization Scheme by a specified deadline. The respondents were instructed to ensure compliance with the statutory requirement of passing a well-reasoned order in such matters, with the option for the petitioners to challenge the decision if aggrieved.