2020 (4) TMI 423 - HC - Customs

Principles of natural justice - EPCG scheme - non-fulfillment of export obligations - grievance of the petitioner is that the petitioner was not offered any opportunity of personal hearing, though the provision u/s 9(4) of the Foreign Trade (Development and Regulation) Act, 1992 extracted above mandates that - HELD THAT - Without going into the merits of the case, the impugned order is set aside and the respondents are directed to issue notice to the petitioner in furtherance to his representation dated 27.06.2019, grant personal hearing to the petitioner and examine the records if any produced by the petitioner and thereafter pass order on merits with reasons - The respondents are directed to complete the exercise undertaken by them on or before 28.02.2020. Petition allowed by way of remand.

Summary

Issues:
Violation of principles of natural justice in passing the impugned order; Non-fulfillment of export obligations due to loan repayment delay and natural calamity; Rejection of representation for extension of EPCG license; Lack of personal hearing as mandated by Section 9(4) of the Foreign Trade (Development and Regulation) Act, 1992.

Analysis:
The petitioner, a manufacturer of high precision components, had imported capital goods under the EPCG scheme to increase production. Due to loan repayment delays and natural calamities, the petitioner could not fulfill export obligations within the stipulated period. Subsequently, the petitioner applied for an extension of the EPCG license, which was rejected by the 3rd respondent without granting a personal hearing, as required by Section 9(4) of the Act. The petitioner contended that the rejection was premature and the 3rd respondent lacked the authority to pass such an order.

The court noted that the impugned order was set aside due to the lack of a personal hearing and directed the respondents to issue a notice to the petitioner, grant a personal hearing, examine any records produced, and then pass an order on merits with reasons by a specified date. The court emphasized the importance of following due process and providing a fair opportunity for the petitioner to present their case. The judgment highlighted the necessity of complying with statutory provisions, such as offering a personal hearing before making decisions that significantly impact the rights of the parties involved.

In conclusion, the writ petition was allowed, and no costs were imposed. The court's decision underscored the fundamental principle of natural justice and the importance of procedural fairness in administrative proceedings. The judgment served as a reminder of the legal requirements for decision-making processes in matters concerning trade regulations and obligations, emphasizing the need for proper adherence to statutory provisions to safeguard the rights of individuals and ensure transparency and accountability in administrative actions.