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TMI Blog2016 (5) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... he DGFT after a detailed enquiry. Therefore, the very exercise of issuing the impugned SCNs stood vitiated. Held that:- the impugned SCNs do not refer to alleged violations of the Act that are not consequential upon the alleged violations of the FTDR Act or FTR Rules. As already noticed, this aspect has already been examined thoroughly by the Dy DGFT while passing the order dated 24th September 2012. In fact, as can be seen from the body of the order, the Dy DGFT during the course of those proceedings consulted the Customs authorities and sought their clarifications on various aspects which have been referred to hereinbefore. Respondents are unable to point out any portion of the impugned SCNs which is any different from the SCN and the consequent adjudication order passed by the Dy. DGFT. In the circumstances, the impugned SCNs issued to the Petitioners, more than one and half years after the Dy DGFT exonerated them of the very same allegations, is nothing but a harassment of the Petitioners and an abuse of the process of law. Therefore, the SCN dated 28th March 2014 issued by the Commissioner, Central Excise, Noida and the SCN dated 19th February 2015 issued by Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) quality control and inspection under Note 3 and 4 respectively as well as condition stipulated at Note 6 and 8 of the Export Policy have to be fulfilled. 5. It is stated that the issue concerning the suspension and cancellation of Importer-export Code (IEC) is governed under Sections 7 and 8 of the Foreign Trade (Development and Regulation) Act, 1992 ( FTDR Act ) respectively and Rules 9 and 10 of the Foreign Trade (Regulation) Rules, 1993 ( FTR Rules ). The DGFT or an officer authorized by him (licensing authority) is the competent authority to issue suspension and cancel any licence certificate, scrip or any instrument bestowing financial or fiscal benefits to the importer or exporter. 6. Under Sections 13 and 14 of the FTDR Act, the DGFT or an officer authorized by him is empowered to adjudicate contravention of provisions of FTDR Act, Rules, Order and Foreign Trade Policy and impose penalties upon the exporter/importer/beneficiary of license certificate after following the principles of natural justice. 7. Petitioner No. 1 procures dressed carcasses in four pieces in refrigerated trucks from the Government of Rajasthan s slaughter house situated at Jaipur, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificates, and without any inspection of the export goods or the ante mortem or post mortem reports of the animals slaughtered and that there was a resultant contravention of the Export of Raw Meat (Chilled/Frozen) (Quality Control and Inspection) Rules, 1992 ( the 1992 Rules'), the Customs officers conducted simultaneous searches on 10th October 2011 at the corporate office at Sarvapriya Vihar, New Delhi and the meat processing plant of Petitioner No. 1 at Manesar, Gurgaon (Haryana). The Customs Officers of the Preventive wing at Delhi seized all the documents available on the spot under Panchanamas dated 10th October 2011 as well as documents pertaining to the export made by Petitioner No. 1 which included all the certificates issued by designated veterinary authority of Jaipur. 12. During the course of the investigation Respondent No. 1, statements were recorded under Section 108 of the Customs Act, 1962 ('Act') of several witnesses including Veterinary Assistant Surgeon, Incharge of Disease Diagnostic Laboratory, Palam, Delhi; Veterinary Officer, Noida (UP) and one at Meerut. The statement of a Director of Petitioner No. 1 was also recorded. 13. It is state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 (2) read with Sections 13 and 14 of the FTDR Act. 15. In the course of the adjudication of the SCN, information was sought by the Director General Animal Husbandry and Dairy Department, Haryana, Panchkula whether Petitioner No. 1 had in fact approached the Deputy Director Intensive Cattle Development Project, Gurgaon for designating a Veterinary Officer. The Director of Petitioner No. 1 appeared before the Dy. DGFT on 15th May 2012 and 7th June 2012 and submitted the relevant documents. 16. The Dy. DGFT on 23rd May 2012 sought a status report from Respondent No. 1. In response thereto, the Additional Commissioner of Customs (Preventive), Delhi informed the Dy. DGFT that they were in the process of issuing a SCN to Petitioner No. 1 and that a copy thereof would be provided to the Dy. DGFT. Subsequently on 26th June 2012 the Additional Commissioner of Customs (Preventive) informed the Dy. DGFT that they could not issue an SCN to Petitioner No. 1 under the FTDR Act and that has been done by the Jt. DGFT, New Delhi. 17. On 26th July 2012, the DGFT again wrote to Respondent No. 1 , i.e., the Collector of Customs (Preventive), Delhi asking him to clarify the following points: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing and breeding. Thus they had fulfilled Condition No. 1 of Sl. No. 23 of Chapter 2 of Export Policy. It was clarified that there was no government designated veterinary authority in Haryana and therefore, Petitioner No. 1 had approached the Veterinary Officer of Meerut Division and requested for testing at the Disease Diagnostic Laboratory, NCT of Delhi. 21. By an order dated 24th September 2012 the Dy. DGFT came to the conclusion that Petitioner No. 1 had not violated any of the conditions of export of frozen buffalo meat in terms of the Exim Policy and that they had not committed any fraud under the DEPB/VKGUY Scheme warranting any penalty under Section 11 (2) (4) read with Section 13 of the FTDR Act. Thus, all the charges against the Petitioners were dropped. SCN by the Customs Commissionerate at Noida 22. After waiting for more than a year and half, the Commissioner of Customs, Central Excise and Customs, Noida issued the impugned SCN dated 28th March 2014 asking Petitioner No. 1 and its directors (Petitioner Nos. 2 to 5) to show cause why (i) Frozen boneless buffalo meat valued at ₹ 28,69,97,814 exported through ICD Dadri during the year 2008 to 2011 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same issue, two draft notices had been prepared. One had been sent to the Bombay Collector and the other to the Commissioner of Customs, Noida. While till then the Collector of Customs at Bombay had not issued any SCN in view of the earlier decision of the Dy. DGFT, the Commissioner of Customs, Noida had issued the impugned SCN. Counter affidavit and rejoinder-affidavit have been filed by the Respondents and Petitioners respectively in Writ Petition (Civil) No. 6114 of 2014. 25. During the pendency of W.P. (Civil) No. 6114 of 2014, the Collector of Customs (NS-II), Navi Mumbai, Maharashtra issued the second impugned SCN dated 19th February 2015, which too was challenged by the Petitioners in the second W. P. (Civil) No. 10709 of 2005. While directing notice to issue in the said petition on 20th November 2015, the Court directed it to be heard along with W.P. (Civil) No. 6114 of 2014. 26. This Court has heard the submissions of Mr. Vakul Vardhan Gautam, learned counsel for the Petitioners and Mr. Satish Kumar, learned Senior standing counsel for the Respondents. Submissions on behalf of the Petitioner 27. The principal submission of Mr. Gautam is that in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larations before the Customs authority at the time of filing of shipping bill by submitting invalid veterinary health certificates. It is further submitted that by violating the provision of ITC (HS) classification of Import and Export Items, Schedule II thereby contravening the provisions of Section 11 of FTDR Act, Petitioner No. 1 had rendered the goods exported by them prohibited under Section 11 of the Act. Thus the goods had become liable for confiscation under Section 113 (d) of the Act. Reliance was placed on the decision of the Supreme Court in Chengalvaraya Naidu v. Jagannath AIR 1994 SC 853. According to the Respondents, the entire DEPB credit and VKGUY benefit availed by the Petitioners during the past five years were payable by them along with interest and penalty under Sections 114 and 114A of the Act. Analysis and Reasons 31. The Court has carefully perused the impugned SCNs dated 28th March 2014 issued by the Customs Commissioner, Noida and 19th February 2015 issued by the Customs Commissioner at Nhava Sheva, Mumbai. One is virtually a carbon copy of the other. Further, the SCNs refer to the violation of ITC (HS) inasmuch as certificate has not produced to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntation it was the licensing authority which had to take steps to cancel the licence. 34. The impugned SCNs do not refer to alleged violations of the Act that are not consequential upon the alleged violations of the FTDR Act or FTR Rules. As already noticed, this aspect has already been examined thoroughly by the Dy DGFT while passing the order dated 24th September 2012. In fact, as can be seen from the body of the order, the Dy DGFT during the course of those proceedings consulted the Customs authorities and sought their clarifications on various aspects which have been referred to hereinbefore. 35. Mr. Satish Kumar was unable to point out any portion of the impugned SCNs which is any different from the SCN and the consequent adjudication order passed by the Dy. DGFT. In the circumstances, the impugned SCNs issued to the Petitioners, more than one and half years after the Dy DGFT exonerated them of the very same allegations, is nothing but a harassment of the Petitioners and an abuse of the process of law. 36. The Court accordingly quashes the SCN dated 28th March 2014 issued by the Commissioner, Central Excise, Noida and the SCN dated 19th February 2015 issued by Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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