2009 (5) TMI 500 - HC - Customs

Violation of export and import code- The petitioner was previously a Government of India Undertaking and after the process of disinvestment it is now controlled by its management. The petitioner is engaged in the business of manufacture and sale of E.M.U coaches, wagons, heavy cranes, etc. and in course of its business undertakes both import and export activities. For the purpose of such activity on 20th June, 1990 the petitioner was allotted an Import-Export Code bearing no. 0290000211 (for short I.E.C ). In the usual course of business the petitioner is required to import components and parts for E.M.U. coaches, cranes, wagons etc. The agent of the petitioner filed necessary documents with the customs authorities for its release. On 23rd/24th February, 2009 the agent of the petitioner was informed that the import could not be completed as the I.E.C. was not functioning. On 25th and 26th February, 2009 the agent of the petitioner informed the petitioner that I.E.C. of the petitioner had been suspended by the respondent authorities. Since due to non-release of the goods the petitioner was severely prejudiced and as the particulars could not be provided by the agent, in the first week of March, 2009 the petitioner made enquiries with the authorities, but without any effect. On 18th March, 2009 a letter demanding justice was issued, but it went unheeded. Aggrieved, the writ petition was filed. In the light of the various decisions held that- Hence, as the petitioner gave an undertaking, was given opportunity to represent, knew about the statutory consequences of non-payment of penalty and as suspension is consequential and in view of the provisions contained in Section 11(4), no further opportunity to represent or hearing is required before an order of suspension under the Act is passed. Therefore, the writ petition is dismissed.

Issues Involved:
1. Whether the petitioner was entitled to an opportunity to furnish representation or be heard before the suspension of the Importer-Exporter Code (I.E.C.) under Section 11(4) for non-payment of penalty.

Detailed Analysis:

1. Entitlement to Opportunity for Representation or Hearing Before Suspension of I.E.C.:

The petitioner argued that no order of suspension was furnished and that they were not given an opportunity to make a representation before the suspension of the I.E.C., which they claimed was a violation of the Foreign Trade (Development and Regulation) Act, 1992 (the Act) and principles of natural justice. The petitioner cited multiple judgments to support their contention that suspension of I.E.C. has civil consequences and thus requires adherence to natural justice principles.

The respondents countered that before imposing the penalty, the petitioner was given a show-cause notice and ample opportunity to respond, which the petitioner did in writing but failed to avail of the personal hearing opportunity. The respondents emphasized that the petitioner was informed that non-payment of the penalty would lead to the suspension of the I.E.C. without any further notice. They argued that the language of Section 11(4) is clear and unambiguous, making further opportunity to represent unnecessary.

Legal Provisions and Interpretation:

- Section 8 of the Act: This section provides for suspension or cancellation of the I.E.C. after giving the person a notice and a reasonable opportunity to make a representation in writing and, if desired, a hearing.
- Section 11(4) of the Act: It states that if a penalty imposed under the Act is not paid, it may be recovered as an arrear of land revenue, and the I.E.C. may be suspended until the penalty is paid.
- Section 14 of the Act: This section ensures that no penalty or confiscation order is made without giving the owner of the goods a notice in writing and an opportunity to make a representation and be heard.

The court noted that the petitioner was issued show-cause notices and given opportunities to respond and be heard before the penalty was imposed. The petitioner failed to avail of the personal hearing opportunity. The order imposing the penalty clearly stated that non-payment would lead to the suspension of the I.E.C. without further notice.

Judgment Analysis:

The court found that the language of Section 11(4) is clear and unambiguous, indicating that suspension of the I.E.C. is a consequence of non-payment of the penalty. The word "and" in Section 11(4) makes non-payment of the penalty and consequent suspension conjunctive. The court emphasized that the suspension flows from the penalty order, and thus, further opportunity to represent before suspension is not required.

The court referred to the Supreme Court's judgment in Union of India v. Dharamendra Textile Processors to highlight that in interpreting fiscal laws, the language used in the statute is the determinative factor of legislative intent, and nothing can be read into a provision that is not explicitly stated.

The court concluded that the petitioner was aware of the consequences of non-payment of the penalty, as evident from the declaration/undertaking furnished by the petitioner. The court held that the statutory provisions operate in different contexts, and the language of Section 11(4) does not require further opportunity for representation before suspension.

Conclusion:

The court dismissed the writ petition, holding that the petitioner was not entitled to further opportunity for representation or hearing before the suspension of the I.E.C. under Section 11(4) of the Act. The court emphasized that the legislative intent, as reflected in the statute's clear and unambiguous language, does not support the petitioner's contention for additional procedural safeguards before suspension.

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