2009 (9) TMI 372 - HC - Customs

Export quota- The petitioners have impugned the orders passed by the Apparel Export Promotion Council, the Textile Commissioner and the second Appellate Committee directing the petitioners that they were not entitled to waiver of forfeiture amount for failure to comply with the terms of the quota obligation. Held that- the aforesaid clause did not give any power to the second appellate committee to enhance the quantum of forfeiture and increase the same. Thus the second appellate committee to enhance the forfeiture amount is liable to be set-aside. Thus the appeal is partly allowed.

Summary

Issues:
Challenge to orders of Apparel Export Promotion Council, Textile Commissioner, and Appellate Committee regarding waiver of forfeiture amount for quota non-utilization.

Analysis:
The petitioners contested orders directing forfeiture due to quota underutilization. Pre-2005, textile export was governed by bilateral agreements. Quotas required earnest money to prevent lapses. Petitioners admitted non-utilization, leading to forfeiture notices upheld by Appellate Committees. Legal precedents supported forfeiture for non-compliance.

The petitioners cited unscheduled power cuts in Ludhiana for non-utilization. Authorities rejected this, stating power cuts were normal business risks. Judicial review found authorities' decisions reasonable, not warranting interference. The Court cannot substitute its opinion and upheld the normalcy of power cuts as a business hazard.

One petitioner claimed 88.94% quota utilization, arguing against forfeiture. However, authorities upheld forfeiture due to underutilization. Policy allowed no forfeiture for under-utilization up to 10%. The Court clarified that decisions on marginal cases like this are within authorities' discretion.

In one case, the second Appellate Committee enhanced forfeiture against policy. The Court found this enhancement unauthorized, as only exporters could appeal forfeiture decisions. The Committee lacked the power to increase forfeiture without an exporter's appeal. The Court set aside the enhanced forfeiture, allowing remedial steps if needed.

In conclusion, the Court dismissed two petitions challenging forfeiture orders but partly allowed one due to unauthorized enhancement. No costs were awarded.