2003 (5) TMI 71 - HC - Customs

Summary

Issues Involved:
1. Jurisdiction of the Additional Director General of Foreign Trade.
2. Alleged misuse of imported goods.
3. Plea of non-utilisation of goods.
4. Proportionality of the penalty imposed.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Additional Director General of Foreign Trade:
The petitioners contended that the Additional Director General of Foreign Trade (ADGFT) lacked jurisdiction to adjudicate the show cause notice, as he was the appellate authority. They argued that the Joint Director General of Foreign Trade (JDGFT) should have adjudicated the matter, given the goods' value was less than Rs. 10 lakhs, and an appeal should lie to the ADGFT. The court held that superior authority, such as the ADGFT, inherently possesses the jurisdiction to adjudicate matters within the purview of their juniors. The petitioners exercised their right to appeal to the Appellate Committee, thus no prejudice was caused. Consequently, the court found no merit in the jurisdictional challenge.

2. Alleged misuse of imported goods:
The petitioners argued that action under Section 4-I(1)(a) of the Import and Export (Control) Act could only be taken if there was an allegation of misuse of imported goods, which was absent in the show cause notice. The court referred to the case of *Optina Impex Private Limited v. Union of India*, where it was held that penalties under Section 4-I(1)(a) require allegations of misuse. However, the court distinguished the present case, noting that the show cause notice explicitly stated the petitioners failed to fulfil export obligations and implied misuse by stating the goods were utilised in violation of licence conditions. Thus, the court found the allegations sufficient to invoke Section 4-I(1)(a).

3. Plea of non-utilisation of goods:
The petitioners claimed that the goods were still in their possession, implying no misuse. The court dismissed this argument as an afterthought, noting that this plea was not raised in the reply to the show cause notice or in the appeal before the Appellate Committee. The court emphasized that new arguments not previously presented cannot be entertained in a writ petition.

4. Proportionality of the penalty imposed:
The petitioners contended that the penalty of Rs. 45 lakhs was disproportionate to the value of the goods. The court reiterated that the Act empowers the authority to impose a penalty up to five times the value of the goods. It held that the court, under Article 226 of the Constitution, would not act as an appellate body to reassess the appropriateness of the penalty. The authority's discretion, as conferred by the legislature, was exercised within the statutory limits, and thus, no interference was warranted.

Conclusion:
The court dismissed the writ petition, upholding the orders of the ADGFT and the Appellate Committee. It found no jurisdictional error, validated the allegations of misuse, rejected the plea of non-utilisation as an afterthought, and affirmed the proportionality of the penalty within the statutory framework. The petitioners' arguments were found to lack merit, and no grounds for interference were established.