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TMI Blog2021 (5) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... e show cause notice pursuant to the said search operation and subsequent to the suspension of this is already given on 05.03.2019. Any indulgence on the part of the Court at this stage, would amount to entertaining the matter and indulging into the merit at the stage of show cause notice, which is impermissible. Once having extended the period on 27.11.2018, without availing the opportunity, the grant of extension of Export Obligation period, cannot be cancelled. However, if there are certain suspicious documents noticed by the DRI, the authority concerned, if has chosen to suspend the same and has sought the detail from the petitioner, no interference is desirable. If the petitioner is given a clean chit in the proceedings of the show cause notice, it may request the concerned authority to consider the case of extending the Export Obligation period which has been suspended presently and it would be for the authority to consider such a request at an appropriate time, if the factual circumstances based on the substantive material eventually tilt in favour of the petitioner. This petition deserves no merit and consideration, and stands dismissed. - R/SPECIAL CIVIL APPLICATION ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rency. This EPGC Scheme has been set out under Chapter 5 of the Foreign Trade (Development Regulation) Act, 1992. 2.3 The Central Government in exercise of powers conferred by Section 25(1) of the Customs Act, 1962 issued a Notification No.97/2004-CUS dated 17.09.2004 as amended from time to time; whereby the capital goods imported, under valid authorisation issued under the EPCG Scheme in terms of Chapter V of the FTP is exempted from so much of the duty of Customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975. This would be in excess of the amount calculated at the rate of 5% ad valorem, and the whole of additional duty leviable under Section 3 of the Customs Tariff Act,1975 with the conditions as provided under the said Notification. 2.4 The petitioner was even-though granted the EPCG Authorisation No.0830002618 dated 09.09.2008 by the respondent No.2 under the EPCG Scheme formulated by the Ministry of Commerce under the FTP in the year 2008, for import of printing machines with a condition to export of leaflets, booklets, brochures, commercial banners, books, calenders and similar matters classifiable under ITC 4901-1020 and 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 In the meantime, the Directorate of Revenue Intelligence ('the DRI' for short) initiated investigations into duty-free imports of the petitioner. During the course of investigation, statement of the petitioner was recorded. Although, the application seeking extension of Export Obligation was pending before the licensing authority and the petitioner being eligible for second extension on payment of fees as payable the said capital goods imported under the EPCG scheme, pursuant to the seizure of the imported capital goods, the petitioner sought provisional release after furnishing bank guarantee of ₹ 27,52,042/- and Bond for the full value of the imported capital goods. Upon furnishing the Bank guarantee and the Bond, the machine was released provisionally by the respondent No.4. 2.11 The petitioner was directed to submit the original copy of the EPCG licence issued to them within a period of two days without providing any details vide communication dated 24.12.2018 allegedly for no rhyme or reason. The petitioner requested respondent No.2 to clarify the matter as to why the licence was required to be submitted. 2.12 The respondent No.3 vide letter dated 22.01.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir Export Obligation under the EPCG Authorisation issued to them as stipulated under Foreign Trade Policy; (ii) The Extension given by Respondent No.2 vide licence Amendment sheet dated 27.11.2018, expiring on 09.09.2020 may be extended or made applicable for a period of 2 years prospectively from the date of communication of the order of extension or from the date of Order of this Hon'ble Court; (III) Stay the operation/adjudication of the Show Cause Notice dated 05.03.2019 (Annexure I) issued to the Petitioner, till such time the extension of Export Obligation period is granted and valid; (iv) Not to take coercive action against the Petitioner till the expiry of the extended period of EOP. (B) this Hon'ble Court be pleased to issue a Writ of Certiorari, or a Writ in the nature of Certiorari, or any other appropriate Writ, Order or direction, calling for the papers and proceedings leading to the letter dated 22.01.2019 issued by Respondent No.3 suspending the Amendment Sheet No.3 (Annexure G) and after looking into the same and the legality thereof this Hon'ble Court be pleased to quash and set aside the said letter dated 22.01.2019 (Annexure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.2018. 5. It is further contended that the allegations made by the petitioner are false and baseless as DRI has sent communication to DGFT, Ahmedabad giving the details of case and statements recorded in case of M/s.Maruti Printers in the year 2018. According to the respondent, the prayer to stay the operation/ adjudication of the show cause notice dated 05.03.2019 is granted till such time the extension of EOP or his valid merit would not require to be considered. It is the connivance of the petitioner with the third party without manufacturing or supplying any goods to the third party version exporter on the contrary should require strict directions. 6. The affidavit-in-rejoinder is filed by the petitioner which would be regarded at an appropriate place. 7. This Court has heard extensively the learned advocate, Mr.Hardi P. Modh appearing for the petitioner and learned Central Government Standing Counsel, Mr.Parth Divyeshvar appearing for the respondent, who have argued along the line of the respective pleadings. On careful examination of the entire material and on thoughtfully considering the rival claims of the parties, for reasons to follow hereinafter, this petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice is still alive and 43% of export is already carried out; however, 57% of export is still remaining. The obligations of his since have remained unfulfilled, no purpose is likely to be served in granting the extension of the time against the EPCG authorisation No.0830002618 dated 09.09.2008, since the same had been suspended. Having noticed that, continuing the same, is of no use when the petitioner has not fulfilled his obligations as were required to be done at his end. 10. Having thus heard both the sides and also having considered the material on the record, the question that dragged the attention of this Court is as to whether the extension as sought for of the authorisation needs to be given to the petitioner in wake of the pendency of the show cause notice dated 05.03.2019 and in total set of facts and circumstances? 11. Undisputed facts in the instant case are that the petitioner applied for and was granted EPCG authorisation on 09.09.2008 by the office of respondent No.2 under the EPCG scheme formulated by the Ministry of Commerce under the FTP in the year 2008. The EPCG authorisation No.0830002618 was for import of printing machines with a condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation No.64/2008-CUS dated 09.05.2008, a show cause notice was issued on 05.03.2019. The condition in Para No.5 of Notification No.64/2008-CUS dated 09.05.2008 requires the importer to furnish the details of Export Obligation fulfilled in two Blocks i.e. 50% Export Obligation in Block of 1st to 6th year and remaining 50% Export Obligation in Block of 7th to 8th year with evidence before the Customs Authorities within a period of 30 days of expiry of each Block. The respondent authorities could not find any evidence that within the stipulated time period, the Export Obligation of each Block had been fulfilled. 16. It also appears that the search operation was conducted on 15.09.2018 at the office cum factory premises of the petitioner at Abhay Estate, Tavdipura, Shahibaug, Ahmedabad where printing machines imported under the EPCG licence No.0830002618 dated 09.09.2008 was installed. During the course of the search operation conducted, the statements of the proprietor of the petitioner, the proprietor of M/s.Singh Road Carrier, Ahmedabad, General Manager of M/s.Quarterfold Printabilities, Production In-charge of Scratch Card unit of the petitioner, etc. have been recorded. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shipping bills of other firms and using it before its own export. The Foreign Trade (Development Regulation) Act, 1992 and the Rules made thereunder requires the personal hearing for the authority to propose imposition of the penalty and it also involves adjudication of the confiscation. 18. We notice that the extension has been firstly provided of the EOP by respondent No.2 on 10.09.2018 and thereafter, this has been suspended by the respondent No.3 on 22.01.2019. It is to be noted that the petitioner was directed to submit the original copy of the EPCG with the enclosure in two working days by a communication dated 24.12.2018. Yet another communication dated 22.01.2019, which is impugned here states that since the communication dated 24.12.2018 calling for authorisation for amendment had not been complied with nor had he availed any personal hearing to explain the non-compliance, the amendment in the Sheet No.3 dated 27.11.2018 stood suspended. It was further directed to furnish the original EPCG No.0830002618 within a period of seven days, failing which the action under Foreign Trade (Development Regulation) Act, 1992 had been proposed. The show cause notice has been iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise its jurisdiction, entertained the writ petition and decided the issue on merits, we do not think it appropriate to upset the impugned order of the High Court under Article 136 of the Constitution on a technical ground. The second contention urged by Mr. T.L.V. Iyer is that under Section 11-A, the authority did have power and the High Court had itself found in regard to paragraphs (1) to (13) and directed inquiry in respect of the clandestine removal of the goods. The assessee could have been directed to file a reply in regard to the matters concerning the incorrect valuation and the High Court ought not to have interfered. We are unable to accept the contention of the learned counsel for reasons more than one. First, as submitted by Mr. K.K. Venugopal, if an authority which has jurisdiction in regard to one aspect takes upon itself to make enquiry into a matter in respect of which it had no jurisdiction then merely because in regard to one aspect it has jurisdiction, the court cannot ignore the fact of lack of jurisdiction and allow the Tribunal to proceed with the matter in respect of which it has no jurisdiction to make inquiry. Secondly, the position, stated above, na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preliminary issue should more appropriately be dealt with by the Tribunal. The appeal court has made it clear that any party who feels aggrieved by the finding of the Tribunal on this preliminary issue may move the high Court in accordance with law. Therefore, we are not prepared to accept Mr. Sastris argument that the Appeal court was wrong in reversing the conclusion of the trial Judge insofar as the trial Judge proceeded to deal with the question as to whether the action of the appellant was a closure or a lockout. 14. In State of Uttar Pradesh v. Brahm Datt Sharma and Anr., AIR (1987) SC 943 : [1987] 2 SCC 179, this Court held: 9. The High Court was not justified in quashing the show cause notice. When a show cause notice is issued to a government servant under a statutory provision calling upon him to show cause, ordinarily the government servant must place his case before the authority concerned by showing cause and the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued probably without any authority of law. The purpose of issuing show cause notice is to afford opportunity of hearing to the gove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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