2005 (4) TMI 92 - HC - Central Excise

Summary

Issues Involved:
1. Legality and validity of the show cause notice dated 18th February 2003.
2. Legality and validity of the order dated 18th August 2003.
3. Jurisdiction of the respondent authorities under the Foreign Trade (Development and Regulation) Act, 1992.
4. Alleged fraudulent misrepresentation and overvaluation in obtaining DEPB.
5. Alternative remedy and the jurisdiction of the High Court under Article 226 of the Constitution.

Issue-wise Detailed Analysis:

1. Legality and Validity of the Show Cause Notice Dated 18th February 2003:
The petitioners challenged the legality and validity of the show cause notice dated 18th February 2003 issued under Sections 9(4), 16, and 11 of the Foreign Trade (Development and Regulation) Act, 1992. The notice alleged that the exported items, Tape Deck Mechanisms (TDM) and D.C. Micromotors (DCM), were procured from M/s. Elin Electronics Ltd. and misrepresented as manufactured by M/s. G.R. Magnets Ltd. The notice claimed the goods were exported at inflated prices to claim excessive DEPB credits. The Court found that the notice was based on allegations of fraudulent misrepresentation and overvaluation. It emphasized that the Customs and Central Excise authorities had already verified and accepted the export documents, including AR-4 Forms, which are conclusive proof of manufacturing. Therefore, the respondent authorities under the Foreign Trade Act had no jurisdiction to issue the show cause notice based on these allegations.

2. Legality and Validity of the Order Dated 18th August 2003:
The order dated 18th August 2003, issued by the Zonal Joint Director General of Foreign Trade, stopped all Exim benefits to the petitioner firm. The Court held that since the show cause notice itself was without jurisdiction, the subsequent order based on it was also null and void. The Court noted that the Customs and Central Excise authorities had already cleared the goods for export, and their decisions could not be negated by the authorities under the Foreign Trade Act.

3. Jurisdiction of the Respondent Authorities Under the Foreign Trade (Development and Regulation) Act, 1992:
The Court examined whether the respondent authorities had jurisdiction to issue the show cause notice and the subsequent order. It concluded that the respondent authorities did not have jurisdiction to question the manufacturing and exportation of goods once the Customs and Central Excise authorities had cleared them. The Court emphasized that different statutes operate in separate fields, and one authority cannot overrule the decisions of another authority under a different statute.

4. Alleged Fraudulent Misrepresentation and Overvaluation in Obtaining DEPB:
The Court addressed the allegations of fraudulent misrepresentation and overvaluation in obtaining DEPB. It noted that the DEPB licenses were issued after thorough verification by the Customs authorities, who had endorsed the shipping bills and verified the export proceeds. The Court held that the respondent authorities under the Foreign Trade Act could not re-examine these issues, as they fell within the jurisdiction of the Customs and Central Excise authorities.

5. Alternative Remedy and the Jurisdiction of the High Court Under Article 226 of the Constitution:
The respondents argued that the petitioners should have sought alternative remedies available under the statute. However, the Court held that the availability of an alternative remedy does not bar the High Court from exercising its jurisdiction under Article 226, especially when fundamental rights are alleged to have been infringed, or there is a question of jurisdiction. The Court referred to the Supreme Court's decision in Whirlpool Corporation v. Registrar of Trade Marks, which established that alternative remedies do not preclude the High Court from issuing writs in cases of fundamental rights violations or jurisdictional issues.

Conclusion:
The Court concluded that the show cause notice dated 18th February 2003 and the order dated 18th August 2003 were without jurisdiction and thus null and void. The petitioners were granted liberty to approach the appropriate forum for challenging any subsequent show cause notices. The application was disposed of without any order as to costs.