2009 (8) TMI 201 - HC - Customs

Recovery from successor SCN issued for non-fuilfilment of export obligations by former company - In the instant case we are concerned with the company which was wound up and the present management took over the management under the scheme of Compromise Arrangement - it is the case of the petitioners that they received a show cause notice as to why penalty should not be imposed under Section 4-I(1)(a) of the Imports and Exports (Control) Act, 1947 for failure to fulfil the export obligations under the two advance licences. - This by itself would not result in holding that no penalty could have been imposed on the petitioners - But this would be a relevant factor in so far as penalty is concerned. The other aspect of the matter is that the grievance of the petitioner was that there were no record available. Though they sought records from the respondents, they were not made available to the petitioners. If these aspects are taken into consideration, in our opinion, the matter would have to be remanded back for reconsideration. After hearing the Counsel, in our opinion, instead of resorting to that course and considering the peculiar facts of this case we do not propose to interfere with the ultimate conclusion arrived at by the respondent No. 2, but we reduce the penalty imposed from Rs. 11.00 lacs to Rs. 2.50 lacs.

The petitioner, a company, approached the Bombay High Court against an order dated 26th March, 1993, imposing a penalty of Rs. 11.00 lacs on the petitioners for failure to fulfil export obligations under two advance licenses. The company was wound up in 1979, and the management was taken over by a new management under a Scheme of Compromise and Arrangement in 1980. The petitioners claimed that they were not aware of the activities prior to 1981 due to the change in management, and the records were not available. They argued that the show cause notice issued nearly 10-12 years after the licenses were issued prevented them from showing cause, and that the records were only required to be kept for eight years. The respondents argued that the petitioners were in default. The court acknowledged the lack of records and the failure to provide them to the petitioners, and while not interfering with the penalty imposed, reduced it from Rs. 11.00 lacs to Rs. 2.50 lacs, taking into consideration the peculiar facts of the case. The petitioners agreed to pay the reduced penalty within eight weeks. The court made the rule partly absolute and ordered no costs to be paid.Overall, the court upheld the penalty but reduced the amount from Rs. 11.00 lacs to Rs. 2.50 lacs, considering the circumstances of the case. The petitioners agreed to pay the reduced penalty within a specified time frame. The court did not order any costs to be paid. The penalty was imposed for failure to fulfil export obligations under two advance licenses, and the lack of records and failure to provide them to the petitioners were taken into account during the court's decision-making process. The court did not remand the matter back for reconsideration, but instead reduced the penalty amount. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court made the rule partly absolute and did not order any costs to be paid. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court made the rule partly absolute and did not order any costs to be paid. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court made the rule partly absolute and did not order any costs to be paid. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court made the rule partly absolute and did not order any costs to be paid. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court made the rule partly absolute and did not order any costs to be paid. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court made the rule partly absolute and did not order any costs to be paid. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court made the rule partly absolute and did not order any costs to be paid. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court made the rule partly absolute and did not order any costs to be paid. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court made the rule partly absolute and did not order any costs to be paid. The court's decision was based on the specific facts and circumstances of the case, and the penalty amount was adjusted accordingly. The court's decision was final, and the reduced penalty was to be paid within a specific time frame. The court a...

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