2020 (9) TMI 270 - HC - Customs

Jurisdiction of Joint DGFT to review own order - Section 16 of the Foreign Trade (Development and Regulation) Act 1992 - Time Limitation for making such review - notice issued after about 10 years from the issuance of the EOD Certificate - proviso to Section 16 of the Act - opportunity of personal hearing - HELD THAT - Section 16 of the FTDR Act empowers the Director General to review any decision or order made by the Joint Director of Foreign Trade. The power of review of any decision or order is only under Section 16 - As and when the second respondent had issued the EPCG licence and the Export Obligation Discharge Certificate he becomes functus officio and if at all such an order of the second respondent is to be reviewed the same can be done only by the Director General as provided under Section 16. Apparently the impugned notice issued by the second respondent itself is without any jurisdiction and contrary to the statutory provisions. Time Limitation - HELD THAT - Section 16 empowers the Director General to review the order within a period of two years from the date of the decision or the order passed. Apparently all the impugned notices in the aforesaid Writ Petitions are beyond the period of two years. As a matter of fact the notices are after a long delay between 8 to 10 years and there is absolutely no explanation for this inordinate delay in the proposal to review the order. The only ground raised by the learned Additional Solicitor General is that the two years period prescribed under Section 16 would commence from the date of the demand notices - I am unable to contemplate as to how such date of reckoning could be construed from the proviso to Section 16 when it is unambiguously provided that two years period will commence from the date of decision or order which is sought to be revised. Opportunity of personal hearing - learned Additional Solicitor General also submitted that since the petitioner had requested for an opportunity of personal hearing pursuant to the impugned notices the option of filing the Writ Petitions instead of availing the personal hearing requires dismissal of the Writ Petitions on the ground of non availment of the alternate remedy - HELD THAT - I am not in agreement with such a submission. It is a settled proposition of law that when a notice is issued without jurisdiction and against the authority of law this Court may be justified in exercising its powers under Article 226 of the constitution of India and interfere with such a notice. Even otherwise a mere option expressed to raise objections to the impugned notices will not disentitle or be a bar to the petitioner to avail the powers under Article 226 of the Constitution of India. Thus the petitioner would be entitled to succeed on the second ground of limitation also. Petition allowed.

Summary

Issues:
Challenge to impugned notices issued for recovery of customs duty and interest after lapse of many years from the Export Obligation Discharge Certificate (EOD) issuance.
Jurisdiction of the second respondent to review his own order under Section 16 of the Foreign Trade (Development and Regulation) Act, 1992.
Validity of the impugned notices beyond the two-year limitation period prescribed under Section 16 of the Act.
Availability of alternate remedy of personal hearing before challenging the impugned notices through Writ Petitions.

Analysis:
In the present case, the petitioner, an Export Promotion and Capital Goods (EPCG) license holder, imported capital goods at a concessional rate of customs duty for manufacturing export items. After fulfilling the export obligation, the petitioner applied for redemption of the EPCG license and obtained Export Obligation Discharge Certificates (EOD) between 2006 and 2008. However, several years later, impugned notices were issued by the second respondent to recover customs duty and interest, prompting legal challenge.

The primary contention raised by the petitioner's counsel was the lack of jurisdiction of the second respondent to review his own order without explicit statutory provision. The counsel argued that Section 16 of the FTDR Act empowers the Director General of Foreign Trade, not the second respondent, to review orders. The petitioner further contended that the impugned notices, issued after about a decade from the EOD issuance, violated the two-year limitation period prescribed under Section 16 for review.

Contrary to the petitioner's arguments, the Additional Solicitor General contended that the limitation period should commence from the date of the demand notices, not the EOD issuance. Additionally, the respondents alleged that the petitioner's failure to avail the option of personal hearing before filing the Writ Petitions should lead to their dismissal based on non-availing of an alternate remedy.

The Court, after detailed analysis, upheld the petitioner's contentions. It emphasized that the power to review orders under Section 16 lies with the Director General, not the second respondent. Referring to relevant case law, the Court highlighted that the impugned notices were issued without jurisdiction and contrary to statutory provisions. Regarding the limitation issue, the Court rejected the argument that the two-year period should commence from the demand notices, emphasizing that it starts from the date of the decision or order to be revised.

Moreover, the Court dismissed the notion that the petitioner's failure to opt for personal hearing barred them from seeking relief through Writ Petitions. It reiterated that when a notice is issued without jurisdiction, the Court can intervene under Article 226 of the Constitution. Consequently, the Court quashed the impugned notices and allowed the Writ Petitions, emphasizing the petitioner's entitlement to relief despite not availing the option of personal hearing.

In conclusion, the judgment highlighted the importance of adhering to statutory provisions, jurisdictional limitations, and the availability of judicial remedies in challenging administrative actions to protect the rights of the parties involved.