2003 (11) TMI 93 - HC - Customs

Summary

Issues:
Challenge to penalty and debarment order under Imports & Exports (Control) Act, 1947 and Imports (Control) Order, 1955.

Detailed Analysis:

Issue 1: Penalty and Debarment Order
The petitioners challenged a penalty and debarment order under the Imports & Exports (Control) Act, 1947 and Imports (Control) Order, 1955. An REP license was issued to import diamonds, with an endorsement allowing import of OGL items for actual use only. The petitioners authorized another party to import PVC Resin, leading to a show cause notice for violating import policies. The adjudicating authority imposed a penalty of Rs. 1,00,000 and debarred the petitioners from obtaining licenses for a year. An appeal against this order was dismissed, prompting the current petition.

Issue 2: Petitioners' Arguments
The petitioners argued that they did not import the goods in question and should not be penalized for the actions of the authorized importer. They claimed innocence, stating they were unaware of the unauthorized import and repeatedly sought details from the authorized party. The petitioners contended that no provisions of the Acts were violated by them, as they did not directly import the goods.

Issue 3: Respondents' Arguments
The respondents argued that as the license was non-transferable and subject to actual user conditions, the petitioners were liable for any violations by the authorized importer. They emphasized that there was no evidence of the imported goods being used as per license conditions, justifying the penalty imposed.

Issue 4: Court's Decision
The court found that the imported goods were cleared under the petitioners' license and sold in violation of license conditions. Lack of evidence showing proper use of the goods led to the imposition of penalties. The court dismissed the petition, upholding the penalty and debarment order. The petitioners were directed to deposit the penalty amount with accrued interest to the respondents.

Conclusion
The court upheld the penalty and debarment order against the petitioners for violations under the Imports & Exports (Control) Act, 1947 and Imports (Control) Order, 1955. The decision highlighted the responsibility of license holders for ensuring compliance with import regulations and the consequences of unauthorized actions by authorized parties.