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TMI Blog2012 (11) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... collected prima facie material to suggest that the petitioners did not have requisite manufacturing facilities in their registered units. On such basis, investigation was undertaken and certain panchnamas were drawn by DRI authorities. 4. When the petitioners approached the Joint Director of Foreign Trade for issuance of fresh licence for imports, their requests were not considered on the premise that they had breached the provisions of the Customs Act as well as the conditions of the import licences. Special Civil Applications No.10600/2012, 10602/2012, 10605/2012 and 10607/2012 are concerned with the orders passed by the Joint Director of Foreign Trade in this respect. 5. On the premise that these very petitioners had fulfilled their full obligation of exports in connection with the import licences granted to them by DGFT, they had applied for Export Obligation Discharge Certificate ('EODC', for short). Once again, on the premise that the petitioners had not made any genuine exports, the respondents did not grant such certificates. It may be noted that no formal orders in this respect have been passed so far. In Special Civil Applications No.10601/2012, 10604/2012, 106 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue Intelligence, Ahmedabad. Hence, you are requested to kindly take up the matter with the concerned DRI, Ahmedabad for further action in the matter. On receipt of their clearance, your case could be considered further. Your case stands closed." 7.4 In addition to rejecting the petitioners' application for fresh advance licence since the respondent No.1 also desired to disentitle the petitioners from securing any licence/exim benefits and also proposed to suspend/cancel the advance licences already granted, a show-cause notice dated 23-12-2005 came to be issued by the respondent No.1. In such show-cause notice, it was conveyed that DRI had reported that the petitioners had no capacity and machinery to carry out processing of yarn imported duty free under advance licences. A panchnama was drawn on 10-8-2005 at the factory premises of the petitioners in presence of the Chartered Engineer revealing that all the machines were very old and nonfunctional. They were found in dismantled condition and not connected to any power supply. No alternative for power generation was also found. It also conveyed that as per DRI report, vehicles by which the transport was shown to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that on verification of vehicles by which you have shown transport of consignments of deemed exports, revealed that either the vehicles were non-transport nature viz. two-three wheeler, auto rickshaw, motor-cart etc. or the number of there were not registered with any respective RTO at all or the owner of the vehicles denied any transportation for the firm. It was also noticed that in order to camouflage the diversion, you had shown deemed export to far flung located 100% EOU, which include M/s. G.N.Rubbertech P.Ltd., Badu, Barsat, West Bengal, M/s. M.P.Textile Exports, Vill.Fatehpur, Burhanpur, M/. Bhatapara Polytex P.Ltd., Bhatapara, M/s. Royal Fabrics P.Ltd. Medak, A.P., M/s. Raja Textiles, Hyderabad and M/s. G.N.Rubbertech P.Ltd. was found non-functional and non working unit. M/s. Raja Textiles, Hyderabad was totally nonfunctional from the day of its inception. No manufacturing processes were carried out in the factory premises shown on paper. The machinery installed were dismantled condition, rusted and covered with dust and spider's webs. The range Superintendent of Central Excise. M/s. Raja Textiles also reported that the said unit has closed down its activities since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Surat, on Monday i.e. on 22nd February 2010. It is further clarified that the respondent-authority will dispose of the said proceedings within six months i.e. on or before 21st August 2010." 7.12 Pursuant to such orders passed by the learned Single Judge of this court, the petitioners made a detailed representation on 20-2-2010 to the Commissioner of Central Excise as the DRI authority. However, for over full two years since no development took place though this court had granted six months to the respondent to take a final decision, the petitioners filed the present batch of petitions reviving the challenge to the orders passed by respondent No.1 with respect to the petitioners' application for advance licence. 8. In second batch of petitions pertaining to nongranting of EODC, facts may be noticed as emerging in Special Civil Application No.10601/2012. Here, the facts are brief. The very same petitioners claimed to have fully discharged their export obligations against advance licences under which they had made duty free imports. They, therefore, applied for necessary certificate to enable them to liquidate the bank guarantees lying with the Department. They, therefore, app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al is maintainable against an order refusing to grant or renew or suspend or cancel a licence. 10. Section 10 of the Act of 1992 gives power to an authorised officer who may be authorised by the Central Government for the purpose of search and seizure of premises and goods. Section 17 of the Act of 1992 pertains to powers of adjudicating and other authorities which include the powers of the civil court while trying a suit in respect of summoning and attendance of witnesses requiring the discovery and production of any document etc. 11. In exercise of power conferred under section 19 of the Act of 1992, the Foreign Trade (Regulation) Rules, 1993 (hereinafter to be referred to as 'the Rules of 1993') have been framed. Rule 7 thereof pertains to refusal of licence. Relevant portion thereof reads as under:- 7. Refusal of licence.- (1) The Director General or the licensing authority may for reasons to be recorded in writing, refuse to grant or renew a licence if - (a) the applicant has contravened any law relating to customs or foreign exchange; (c) the application or any document used in support thereof contains any false or fraudulent or misleading statement; (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs, the respondent No.1 committed serious breach of principles of natural justice in the following manner. Firstly, in his order dated 30-5-2006, he heavily relied on the contents of the report of the DRI which according to him suggested that the petitioners did not have necessary machinery, infrastructure or facilities for manufacturing the export product and further that there was prima facie material to believe that such goods were never supplied to the EOUs. Admittedly, at no stage, the respondent No.1 shared such report of the DRI with the petitioners. A bare reading of the impugned order reveals that the sole basis for the ultimate conclusion that the respondent No.1 reached with respect to the delinquency of the petitioners was the report of the DRI. 16. Additionally, from the affidavit-in-reply dated 19-10- 2012 filed by respondent No.1 it further emerges that after he issued the show-cause notice to the petitioners and elicited the petitioners' representation to such show-cause notice, he supplied such representation to the DRI officials and also solicited their response. He has, in his reply, stated that the Central Excise authorities have confirmed that the unit wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, do not dilate any further on the impugned communication dated 16-12-2005. 21. Coming to the question of the applications filed by the petitioners for grant of EODC, it is an admitted position that their applications have remained pending since 2005/2006 only on the ground that DRI investigation is going on. We are of the opinion that granting or refusing such certificate is within the powers of respondent No.1. In any case, on the ground that the inquiry is going on, such an issue cannot be kept pending for over seven years. Respondent No.1, therefore, shall have to take a final decision thereon as early as possible. We are informed by the counsel for the respondents that DRI authorities have, after completion of the investigation, issued the show-cause notice in the year 2007 but that no final adjudication of such show-cause notice has been made so far. Be that as it may, the duty of respondent No.1 is to pass some final order on the applications of the petitioners. 22. Under the circumstances, the petitions are disposed of with following directions:- (1) The orders impugned in Special Civil Applications No.10600/2012, 10602/2012, 10605/2012 and 10607/2012 are quashed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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