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TMI Blog2018 (5) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor General of Foreign Trade, under the instructions of the Joint Director of Foreign Trade, issued a show cause notice dated 25-2-2013 to the petitioner pointing out that the petitioner was granted 21 scrips for a total credit of Rs. 211.61 crores under DFCE scheme which was obtained fraudulently by misstating the facts that the company had not included the re-export of the imported goods for claiming such benefits and had utilized the benefits to import goods such as Gold and Silver which were not permitted to be imported under DFCE scheme. It was averred that the company had obtained such scrips by making misrepresentation and misdeclaration suppressing the fact that actual importation and re-export of the same was done with ulterior motive to gain undue benefit of the scheme for the goods which were otherwise ineligible for such benefits. According to the authority, this was in violation of para 3.7.2.1 of Export & Import Policy, 2002-2007 read with relevant notifications. The petitioner, was therefore, called upon to show cause why following actions under Sections 9(4) and 11(2) of the said Act should not be taken : "(i) Ab initio cancel the above-mentioned said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er replied to the said show cause notice under letter dated 29-6-2015, in which, both these aspects were opposed. It was contended that there were no infirmities in the order passed by the Joint Director of Foreign Trade. The petitioner also contended that the pecuniary limits set out in the notification dated 13-6-2013 would not apply in the present case. 6. The Director of Foreign Trade passed the impugned order dated 24-8-2015 and held that the Joint Director of Foreign Trade did not have authority to act as the adjudicating authority as the pecuniary limit involved crossed Rs. 25 crores, as laid down by the notification dated 13-6-2013. His conclusions were as under : "8. I have examined complete facts of the case including written submissions and submissions in the personal hearings. The show cause notice No. 08/F-3/04/AM13/ECA/118, dated 25-2-2013 by Jt. DGFT, Ahmedabad, categorically called upon the Company and its Directors to show cause as to why actions should not be taken against them under Section 9(4) and Section 11(2) of the FT(D&R) Act, 1992. Hence, the moment any adjudicating authority is adjudicating a case under Section 11(2) of the FT (D&R) Act, 1992, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Joint Director of Foreign Trade thus was authorized to rule on this issue. The question of imposition of penalty under Section 11(2) of the Act was merely consequential. His order therefore, did not lack jurisdiction. The Director General of Foreign Trade, therefore, ought not to have set aside such an order in exercise of revisional powers particularly, when no error on the merits of the order passed by the Joint Director of Foreign Trade is pointed out. Counsel further submitted that if the Joint Director of Foreign Trade did not have power to adjudicate on penalty under Section 11(2) of the Act, his very show cause notice would be without authority. He submitted that the notification dated 13-6-2013 would not apply in the present case. 8. On the other hand, learned counsel for the department opposed the petition contending that the show cause notice was a composite notice. The question of cancellation of licence under Section 9(4) and imposition of penalty under Section 11(2) were closely interlinked. When the Joint Director General of Foreign Trade did not have jurisdiction to decide the question of penalty, he ought to have transferred the entire proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;Section 11 of the Act pertains to contravention of provision of the Act, rules, orders and foreign trade policy, relevant portion of which, reads as under: "11. Contravention of provision of this Act, rules, orders and foreign trade policy. - (1) No export or import shall be made by any person except in accordance with the provisions of this Act, the rules and orders made thereunder and the export and import policy for the time being in force." 12. The term 'adjudicating authority' used in Section 11 is defined in Section 2(a) of the Act as to mean the authority specified in or under Section 13. Section 13, in turn, reads as under : "13. Adjudicating Authority.- Any penalty may be imposed or any confiscation may be adjudged under this Act by the Director General or, subject to such limits as may be specified, by such other officer as the Central Government may, by notification in the Official Gazettte, authorise in this behalf." 13. In exercise of powers under Section 13 of Act, the Central Government had published a notification on 13-6-2013 specifying the authority and the limits of his power to act as the adjudicating authority under Section 11 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue authorizing the Director General or other officers. In terms of the said section, under notification dated 13-6-2013 the limit of exercising powers of Joint Director General of Foreign Trade were fixed at Rs. 25 crores where the value of goods or services or technology covered by the authorization issued, registration certificate or permits issued for import or export or in respect of goods or service or technology for which import or export is permitted without any authorization. 15. In plain terms thus, the Joint Director could not have adjudicated the question of penalty where the value of the goods or service or technology covered by the authorization exceeded Rs. 25 crores. This pecuniary limit therefore, would take the present matter out of the purview of the Joint Director. The contention of the petitioner, that the said notification would not apply in the present case, cannot be accepted. The description in the notification is "value of goods or services or technology covered by an authorization issued, registration certificate/permits issued for import or export or ......". The DFCE scrips would also be in the nature of an authorization issued for import of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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