2003 (12) TMI 75 - HC - Customs

Summary

Issues Involved:
1. Challenge to the show cause notice and investigation due to failure to honor export commitment.
2. Application for extension of time to meet export obligation.
3. Alleged improper denial of adjournment and ex parte decision by the Deputy Director General of Foreign Trade (DDGFT).
4. Examination of whether the petitioners were given a reasonable opportunity to be heard.

Detailed Analysis:

1. Challenge to the Show Cause Notice and Investigation:
The petitioners challenged the show cause notice and the investigation on the grounds of their failure to honor export commitments related to duty-free import of materials. The court initially did not stay the proceedings but allowed them to continue, with the effect of any final order being withheld until further notice or for six weeks.

2. Application for Extension of Time to Meet Export Obligation:
The petitioners' application for an extension to fulfill their export obligation under the BECC scheme was directed to be considered within four weeks. The Deputy Director General of Foreign Trade (DDGFT) scheduled a hearing for this application on 15th July 1996, following a notice issued on 9th July 1996.

3. Alleged Improper Denial of Adjournment and Ex Parte Decision:
The petitioners' lawyer appeared before the DDGFT on 15th July 1996, made preliminary submissions, and requested additional time to produce necessary documents. The lawyer claimed that the hearing was deferred to 31st July 1996. However, an order dated 15th July 1996 was later received by the petitioners, denying their extension request on various grounds. The petitioners contended that this order was passed ex parte and without giving them a fair opportunity to present their case.

4. Examination of Whether the Petitioners Were Given a Reasonable Opportunity to Be Heard:
The court examined whether the order dated 15th July 1996 was issued without giving the petitioners a reasonable opportunity to be heard. The petitioners argued that an adjournment was granted until 31st July 1996, but the order was passed behind their backs. The respondents, however, claimed that no adjournment was granted and that the order was issued after considering the submissions on 15th July 1996.

The court noted discrepancies in the events as recorded by the DDGFT and the petitioners. The court found that the petitioners were led to believe that the hearing was adjourned, and the subsequent actions of the respondents suggested that the order might have been an afterthought. The court also considered a letter from the petitioners' deceased lawyer, which supported the claim that an adjournment was granted.

Conclusion:
The court concluded that the order dated 15th July 1996 was likely passed without giving the petitioners a fair opportunity to present their case. The court set aside the impugned order and directed the DDGFT to hear the matter afresh, allowing the petitioners to submit their documents and arguments. The court emphasized that the petitioners should be given a reasonable opportunity to be heard before any final decision is made. The application was disposed of accordingly.