2017 (9) TMI 281 - HC - Customs

Validity of suspension order - suspension of operation of the importer and exporter code (IEC code) allotted to the petitioner - non-speaking order - It is alleged against the petitioner that, the petitioner had allegedly involved itself in the export of consignment of red dry chilies of M/s. S.B. Impex - Held that - there is no material to arrive at the finding that, the observation made in the impugned order that, there are no satisfactory explanation against the show cause notice, is perverse. The reason why the impugned order was passed is that, the explanation given is not satisfactory. This reason has not been substantiated to be perverse - suspension order upheld - petition dismissed.

Summary

Issues Involved:
Challenge to suspension order under Foreign Trade (Development & Regulation) Act, 1992 based on alleged involvement in export of red dry chilies without satisfactory explanation in show cause notice reply.

Analysis:
The petitioner, engaged in import and export business, challenged a suspension order dated March 23, 2017, issued under the Foreign Trade (Development & Regulation) Act, 1992. The petitioner, represented by learned Advocate, argued that the suspension order was non-speaking and should be set aside. It was alleged that the petitioner was involved in the export of red dry chilies of a specific company, but the company issued a letter denying the petitioner's involvement. On the other hand, the Department's Advocate contended that quoting a wrong section in the order does not invalidate it. The petitioner's name emerged from a police investigation, and the accused in criminal proceedings have been charge-sheeted. The Department argued that reversing the suspension order at this stage would not benefit revenue.

Upon reviewing the arguments and materials on record, the court found that the petitioner had received a show cause notice under the Act of 1992 and had responded to it, although the reply was not on record. The authorities, based on the show cause notice and the unsatisfactory explanation provided by the petitioner, decided to suspend the importer and exporter code allotted to the petitioner. Despite errors in quoting sections in the order, the court held that it did not invalidate the order in this case. The court noted that the petitioner was aware of the proceedings, as evidenced by the show cause notice and the petitioner's response, which was not produced. Therefore, there was insufficient material to conclude that the order's observation of unsatisfactory explanation was unjustified. The court emphasized that the reason for the suspension order was the unsatisfactory explanation, which was not proven to be incorrect.

In conclusion, the court dismissed the writ petition (WP No. 383 of 2017) as it found no merit in the petitioner's arguments. No costs were awarded in this judgment.