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TMI Blog2018 (7) TMI 1760X X X X Extracts X X X X X X X X Extracts X X X X ..... r to this case and when the impugned order does not deal with the without prejudice arguments, ignores the mitigating factors, they, all the more we are disinclined to allow the respondents to enforce such an order - The impugned order is quashed and set aside - petition allowed. - Writ Petition No.1096 of 1999, With Chamber Summons No.64 Of 1999 In Writ Petition No.1286 Of 1998 With Notice Of Motion No.217 Of 1999 With Writ Petition No.1286 Of 1998 - - - Dated:- 26-7-2018 - S.C. DHARMADHIKARI PRAKASH D. NAIK, JJ. Mr. V. Sridharan, Senior Counsel a/w Mr. Prakash Shah, Mr. Jas Sanghvi i/b PDS Legal for the Petitioner. Mr. Pradeep S. Jetly a/w Smt. Shehnaz V. Bharucha for the Respondent Nos.1 and 2. COMMON JUDGMENT : (Per S.C. Dharmadhikari, J) 1. These two petitions under Article 226 of the Constitution of India are by a partnership firm and involve common questions of fact and law. They are disposed of by this common judgment. 2. It is agreed by both the sides that we can take the facts from Writ Petition No.1096 of 1999 which suffices for the purpose of our judgment. 3. Prior to 1st April 1997 and in terms of the Standard Input Output Norms ( SION fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/kgs fish products. This corresponded to SION prevailing prior to 01st April 1997. It did not correspond to SION prevailing after this date. The licence was registered in Mumbai Port. 5. On 27th November 1997 the office of the DGFT issued Export Obligation Discharge Certificate to the exporter in terms of Circular No.24 of 1996 dated 19th April 1996. A copy of this certificate is annexed as (Exhibit-B on page Nos.51 to 52). On 27th November 1997 this licence was amended, whereby import quantity was reduced to 15,769.61 and export quantity was reduced to 69,469.660. Further, the licence was made transferable in terms of paragraph 727 of Handbook of Procedures 19972000. Licence is transferable only if the export obligation has been fulfilled. On 28th November 1997 the exporter transferred this license to M/s.Praful G. Kamdar and Sons, perhaps with intimation to DGFT. On 30th December 1997 M/s. Praful G. Kamdar and Sons transferred the licence to the petitioner and the petitioner presumed that intimation was given to DGFT. 6. On 12th February 1998 the exporters submitted the licence under consideration for transferability and further amendment of the import items. The expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction ordering and directing the respondents, their officers subordinate, servants and agents to allow the petitioners to import and clear full and/or balance quantity of 13894 Vitamin Mixes as endorsed/described on the said licence and the validity period for utilization of the licence be extended for that purpose. The petitioners have impleaded to this writ petition the Union of India, the Additional Director General of Foreign Trade, the Commissioner of Customs (Export), the Assistant Commissioner of Customs and by amendment the Joint Director General of Foreign Trade as respondents. 10. It is claimed that the exporter had challenged the adjudication proceedings before the High Court of Orissa at Cuttak. Then reliance is placed on the detailed correspondence between the exporter and office of DGFT, New Delhi. It was urged therein that the exporter was representing in the matter to the DGFT Headquarters at New Delhi. Some reasons were assigned in support of the interpretation of the documents by the exporter. It was inter alia contended by the exporter that advance license be issued ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct have come into force and accordingly the said authorization should have been issued and made transferable as per the revised input output norms and it appears that the said letter of Additional Director General of Foreign Trade, New Delhi dated 25.05.1998 was issued to Customs authorities to restrict the entitlement and refer the matter to Director General of Foreign Trade, New Delhi for further action. 15. With reference to para 12(d) to (f) of the petition, I say that the subject letter dated 25.05.1998, issued by respondent No.2 was not to withheld any clearance of goods mentioned in the subject authorization but to restrict the quantity as per revised input output norms. 16. With reference to para 14 to 22 of the petition, I repeat reiterate and confirm incomplete what is stated in the foregoing para and deny all that is contrary to what is stated by me. The action taken by the respondent no.2 is only to protect the interest of the country and to stop drainage of valuable govt. revenue and foreign exchange. The licencee M/s.Surya Udyog Ltd., A/68, Sahid Nagar, Bhubaneswar have filed a writ petition before the Hon'ble Cuttack High Court on the issue of Show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te. 16. Mr. Sridharan, learned Senior Counsel appearing for the petitioners submitted that though cancellation of the licences cannot be made retrospectively but the petitioners are not challenging the cancellation of the impugned license No.0013883 dated 27th October 1997 after a lapse of long duration. 17. However, Mr. Sridharan submits that the petitioner had undertaken only part import, namely, 1,875 kgs out of total entitlement of 13,894 kgs., of Vitamin Mixes against the impugned licence which was issued based on norms prevailing prior to 1st April 1997. The petitioners are not interested in importing balance quantity of entitlement under the licence since such import will be of no use. The same has lost its relevance and the imported goods will fetch no market/customer due to passage of time. Mr. Sridharan submitted that the petitioners have undertaken import of vitamin mixes of 1,875 kgs vide three Bills of Entries of September 1998 and November 1998, duty free against the impugned licence. These imports were/are well within reduced entitlement of the quantity as per the revised norms published by the DGFT which are effective from 1st April 1997. These imports were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to agree or reject the submissions of the exporter. However, the respondent Nos.1 and 2 entertained another view but at no stage held that there was any misstatement or suppression. The petitioner says that the first defective application was made in November 1996 for issuance of licence based on the exports made during the period from 17th October 1996 to 19th November 1996. A declaration was sought for but once the predecessor in title of the petitioner did not submit that declaration, the case was closed by the licensing authority. The second application was filed in continuation of the first application. At that stage the Exporter believed that the norms prevalent on the date of the export ought to be considered. Even the Licensing Authority proceeded on that basis. It is the adjudicating authority which takes a different view and that is no ground to impose a penalty. 19. The two without prejudice arguments of Mr. Sridharan are as follows : 17. Without prejudice and in any event, it is submitted that Petitioner dealt with the impugned licence only after it was transferred in its favour in May, 1998, much after the issuance of the licence by the DGFT. The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Act, 1962. 22. We have also found from a reading of the FTDR Act that the penalty is sought to be imposed on the basis that the person making or abeting or attempting to make any export or import in contravention of the provisions of this Act or any Rules or order made thereunder or the Export and Import Policy is liable to pay it. The penalty in the instant case has been imposed though there was in vogue a policy styled as Export and Import Policy from 1st April 1992 to 31st March 1997, Chapter-VII of which contained Duty Exemption Scheme. Paragraph 66 of this Policy reads as under : 66. Exports/supplies made from the date of receipt of an application under this scheme by the licensing authority may be accepted towards discharge of export obligation. If the application is approved, the licence shall be issued based on the input/output and value addition norms in force on the date of receipt of the application by the licensing authority in proportion to the provisional exports already made till any amendment in the norms is notified. For the remainder of the exports, the Policy/Procedures in force on the date of issue of the licence shall be applicable. The conversion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing factors have also been noted. Yet, a primafacie finding is rendered that the licence has been issued on the basis of forged and incorrect documents. If there were forged and incorrect documents then, the exporters' stand as reflected in his representation and reiterated from time to time should have been noted and appropriately dealt with at that stage itself. The parties who have been responsible for the alleged fraud, suppression of facts and representation should have been proceeded against at that time. Further, we find that the conclusion is not resting on fraud but fraud, suppression of facts or misrepresentation. We do not find any scope for such a mixed conclusion. Either of the acts have to be held as established and proved. This Court cannot be left to guess as to whether the authority concluded that either fraud is proved or that parties like the petitioner is guilty of suppression of facts or misrepresentation. We do not wish to go into niceties for a fraud could be said to be established and proved if there was suppression of facts. However, when the finding also refers to misrepresentation, then, we are left wondering as to what are the acts attributed to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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