9911796707
TMI Blog2019 (10) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... .P. Trading Company in the matter of import of the canalized goods, in our opinion, imposing the penalty on the petitioners in the absence of mens rea is unsustainable. As the licence is misused by the letter of authority holder M/s. A.P. Trading Company, in the absence of mens rea which is an essential ingredient of the offence, the petitioner No.1 cannot be held liable to pay the penalty. Petition allowed. - WRIT PETITION NO.1873 OF 1998 - - - Dated:- 27-9-2019 - S.C. DHARMADHIKARI M.S. KARNIK, JJ. Mr. Mehul Arvind Shah for petitioners. Mr. J.B. Mishra for respondents. JUDGMENT (PER SHRI M.S. KARNIK,J.) By this petition filed under Article 226 of the Constitution of India the petitioners-Milton's Limited seek quashment of the impugned orders dated 21.7.1998 and also the order dated 13.12.1996. The petitioners have prayed for consequential relief directing the respondent Nos.3 and 4 to withdraw the recovery notice dated 6.8.1998. 2. Brief facts of the case are thus :- The petitioner No.1 claims to be a well known export house and manufacturer and exporter of readymade garments of various types for se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Export House was not allowed to appoint agents in operating non-transferable additional licences for distribution of imported goods on their behalf and that Amoxyciline Trihydrate being a canalized item during the Financial Years April-March 1983 and April-March 1984 was not covered under the main additional licence. It was further alleged in the said show cause notice that the said letter of authority issued by petitioner No.1 in favour of M/s. A.P. Trading Company was unauthorised and both petitioner No.1 and the said M/s. A.P. Trading Company being the letter of authority holder, had committed a breach of Import Control Regulations which attracted the provisions of Clause 8(f) and (g) of the Import and Export (Control) Order 1955 dated 7.12.1955. Petitioner No.1 was called upon to show cause as to why action should not be taken against it and its Directors under Clause 8 of the said order. 6. Petitioner No.1 replied to the show cause notice by its letter dated 28.2.1986. It is the stand of the petitioner No.1 that it had no knowledge about the issue of subsidiary licences and it was not at all involved in any manner for the issuance of the said licences. By the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder Additional Chief Controller held that it was not a fit case for invoking the provisions of Clauses 6(1)(d) and (e) of the Import (Control) Order 1955 against petitioner No.1. 10. The Import and Export (Control) Act, 1947 was repealed by the Foreign Trade (Development and Regulations) Ordinance 1992. Subsequently the said Foreign Trade (Development and Regulations) Ordinance 1992 was repealed by the Foreign Trade (Development and Regulations) Act, 1992. 11. On 28.2.1992/4.3.1992 the Additional Chief Controller of Import and Export issued another show cause notice to petitioner No.1 to show cause as to why penalty should not be imposed on petitioner No.1 under Section 4 I of the Import and Export (Control) Act, 1947. According to the petitioner, the said show cause notice was issued on the same facts as the earlier show cause notice. 12. Petitioner No.1 through his Advocate replied to the said show cause notice. In the reply dated 20.5.1992 the attention of the Additional Chief Controller was specifically drawn to the order dated 21.10.1988 wherein it was held that though the import of goods by the importer was unauthorised it was cleared by the custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ports through letter of authority holder which is a violation of the condition of the licences. M/s. A.P. Trading Company, Bombay who are the letter of authority holders are abetted by the Licencee's act of violation of conditions of the licences and misutilisation of the goods imported thereagainst. 16. It is the further case of the respondents that the M/s. A.P. Trading Company had by some means obtained revalidation of the original licence and that way it illegally overstepped or over utilized the letter of authority. This wrongly procured subsidiary licence was utilized by an unauthorized and unrecognized party. It is the case of the respondents that the licence holder that is the petitioners cannot be absolved of the responsibility as the licence holder is primarily responsible for the proper utilization of the licence. The liability for any act of commission and omission rests on the licence holder. The item was canalized item w.e.f. 16.10.1981. In view of these facts, the Adjudicating Authority imposed a fiscal penalty of ₹ 20 Lakhs on the petitioner firm. 17. Heard learned counsel for the parties. 18. The impugned orders are passed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete statement of the utilization of those goods in its letter dated 3.2.1987. 20. The Apex Court in the case of Hindustan Steel Ltd. V. State of Orissa reported in 1978 (2) ELT (J.159) (SC) held that the discretion to impose a penalty must be exercised judicially. A penalty will, ordinarily, be imposed in cases where the party acts deliberately in defiance of law or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation but not, in the cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. Further the Apex Court in the case of Akbar Badruddin Jiwani V. Collector of Customs reported in 1990 (47) ELT 161 (SC) held that mens rea has to be established in imposing penalty. 21. The facts therefore clearly reveal that the letter of authority holder had made request for re-validation and for issue of subsidiary licences. The Petitioner No.1 claims that it had not issued any letter of authority in favour of M/s. A.P. Trading Company and there is no evidence available on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
