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TMI Blog2015 (10) TMI 2032X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Bank guarantees can be encashed only after a proper determination of issues – Until quantification is made and petitioner is found liable for some amount there is no justification for the issue of Ext.P11; same is unsustainable and set aside - Interim order granted shall continue to be in force until a decision is taken by the Joint Director of Foreign Trade – Decision made partly in favour of assessee. - W.P(C) NOS.29077/2006, 14472/2007 & 7065 OF 2011 - - - Dated:- 11-2-2015 - Mr. K. Surendra Mohan, J. For the Petitioner : Advs. Sri. D.S. Sreekumaran, Smt. T.S. Maya (Thiyadil), Smt. Rekha Nair, Smt. K. Reena For the Respondent : Shri. P. Nagaresh Asst. Solicitor, Adv. Sri. Thomas Mathew Nellimoottil, SC, CB EX ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .P2 and P2(a). It is the case of the petitioner that, as per the terms of the import the petitioner was to earn foreign exchange worth US$4,84,570/- which is five times the value of the capital goods on FOB basis imported as per Ext.P2. The foreign exchange was to be earned within a period of eight years. Under Ext.P2(a), the required foreign currency expected is fixed at US$ 3,74,653. The petitioner executed a bank guarantee to the extent of 95% of the normal customs duty that was expected to be earned. The copies of the bank guarantee are Exts.P3 and P3(a) in WPC 29077/2006. 2. Accordingly the cars were imported and were being used by the petitioner pursuant to installation certificates Exts.P4 and P4(a). While so, by Ext.P5 notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, he has been directed to show cause why the imported cars should not be confiscated, why the bank guarantees should not be enforced, why interest should not be recovered under Section 28 of the Customs Act, 1962, why penalty should not be imposed under Section 112 of the Customs Act, 1962, why penalty should not be imposed on the petitioner in his personal capacity under Section 114A/112 of the Customs Act, 1962 and failing which, action was proposed to be pursued as notified. The petitioner has sought for the issue of appropriate directions, quashing Ext.P12. The said writ petition was admitted on 24.5.2007 and an order of interim stay granted in the case continues to be in force. 4. While so, action was initiated to enforce the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner, he has earned more than the amount of foreign exchange that has been stipulated in Exts.P2 and P2(a) by putting the imported cars for use in the hotel industry itself. Therefore, there are absolutely no grounds for initiating the action as per Exts.P7, P8 and P10 in WPC 29077/2006, Ext.P12 in WPC 14472/2007 and Ext.P11 in WPC 7065/2011. The counsel therefore seeks the issue of appropriate orders quashing the said proceedings. 7. According to Mr. Thomas Mathew Nellimootil, Senior Standing Counsel for Central Board of Excise and Customs, these writ petitions are premature. No action prejudicial to the interests of the petitioner has been initiated by the respondents so far. Though it is true that Exts.P7 and P8 have been issued res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eign exchange earnings from all sources for the purposes of satisfying the requirements of Exts.P2 and P2(a) or whether the entire foreign exchange earnings stipulated by the said proceedings would have to be confined to the use of the motor vehicles alone. 9. The question as to whether the petitioner has satisfied the requirements of Exts.P2 and P2(a) has to be decided by the second respondent, the Joint Director of Foreign Trade, Trivandrum who is in a position to access the records maintained by the petitioner in this connection also.Since no such determination has taken place, I am of the view that in the first instance it is necessary for such a determination to be conducted. It is for the said purpose that, Ext.P10 in WPC 29077/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment, with supporting documents if any. The second respondent shall consider the explanation and the material or evidence that may be produced by the petitioner in support of his contentions and shall decide whether any further action is necessary to be pursued on the basis of Ext.P12 show cause notice. Such decision shall be taken taken, as expeditiously as possible and at any rate within a period of two months of the date of receipt of the petitioner's explanation to the show cause notice. Further action in the matter shall be pursued only after passing an order in accordance with the above direction. ii) WPC 7065/2011 is allowed. Ext.P11 is set aside. iii) The interim order granted in this case shall continue to be in force ..... X X X X Extracts X X X X X X X X Extracts X X X X
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