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2016 (11) TMI 469 - HC - CustomsAdvance licence - Duty Exemption Scheme - DEEC - invocation of Section 11(2) of FTDR Act, 1992 - Held that - We do not find any substance even in the contention that the show cause notices being silent about the proposed levy of penalty, it is not open to the respondents to invoke Section 11(2) of FTDR Act, 1992. On a perusal of the show cause notices, we found that the petitioner was put on notice that it failed to submit the documents to prove the fulfilment of export obligation. It is also relevant to note that the show cause notice dated 01.12.2009 was in fact issued under Section 14 of the FTDR Act proposing to take action under Section 11(2) for non-fulfilment of export obligation against the advance licence dated 22.12.1999. Hence, the allegation that the show cause notices were silent about the action proposed has no factual basis. - The contention that the Directors of the appellant company should not have been made liable also deserves no consideration since none of the Directors approached this Court. Appeal dismissed - decided against appellant.
Issues:
Appeal against order in W.P.(C) No.8417/2015 regarding advance license under Duty Exemption Scheme, violation of export obligation, imposition of penalty under FTDR Act, 1992, mis-utilization of license, dismissal of statutory appeal and review petition, failure to produce documents for export obligation fulfillment, interpretation of clause 4.12 of Handbook of Procedures, imposition of penalty on directors, sufficiency of reasons in the order. Analysis: The appeal was filed against the order in W.P.(C) No.8417/2015 related to an advance license granted under the Duty Exemption Scheme. The appellant was required to fulfill an export obligation within a specified period, failing which penalties were imposed under the FTDR Act, 1992. The appellant failed to provide the necessary documents to prove export obligation fulfillment, leading to the imposition of a substantial penalty by the authorities. The statutory appeal and review petition were dismissed, and the appeal before the High Court challenged the order dated 18.05.2016. The appellant contended that all relevant documents were produced to establish export obligation fulfillment, citing clause 4.12 of the Handbook of Procedures allowing "exports in anticipation of license." However, the authorities found deficiencies in the documents submitted by the appellant, including missing endorsements, lack of specific details, and failure to provide necessary certificates. The authorities provided multiple opportunities for the appellant to submit the required documents but found the submissions inadequate to prove export obligation fulfillment. The High Court observed that the authorities had considered the appellant's contentions and provided opportunities to submit necessary evidence. The Court upheld the findings that the appellant failed to produce authenticated documents to prove export obligation fulfillment as required by the license terms. The Court noted that the dispute was not about the interpretation of clause 4.12 but the appellant's failure to provide essential documents, justifying the penalty imposed under Section 11(2) of the FTDR Act, 1992. Regarding the contention that show cause notices did not specify the proposed penalty, the Court found that the notices clearly indicated the failure to submit documents for export obligation fulfillment, justifying the penalty under Section 11(2). The Court dismissed the argument that directors should not be held liable, stating that none of the directors challenged the decision. Ultimately, the Court found no merit in the appeal and upheld the order dismissing W.P.(C) No.8417/2015, affirming the penalty imposed for non-fulfillment of export obligations under the FTDR Act, 1992.
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