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TMI Blog2024 (5) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... FT Act. Therefore, the penalty was imposed specifically u/s 11(2). Thus, the waiver granted under the rehabilitation scheme is of no assistance to the appellant as it was only of the customs duty. There is no allegation made by the respondents against the appellant's predecessor of making or attempting to make any export or import in contravention of the FT Act, any Rules or orders made thereunder, or the foreign trade policy. Under the license granted to the appellant s predecessor, there was an obligation to export finished goods by earning foreign exchange equivalent to USD 2,59,948 within a period of five years. The allegation is of the failure to abide by the obligation to export the finished goods within a period of five years. So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Karnataka Biotics was permitted to import capital goods worth Rs. 23,38,882/- equivalent to US$ 64,987 CIF value, subject to the condition of the appellant exporting the finished goods worth US$ 2,59,948 and earning an equivalent amount in a freely convertible foreign currency within five years from the date of the licence. Karnataka Biotics imported goods as permitted under the licence and commenced commercial production. However, the Board for Industrial Finance and Reconstruction (for short, BIFR ), in its meeting dated 11th August 1999, declared Karnataka Biotics as a sick unit under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short, SICA ). The said company submitted a rehabilitation proposal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isposed of the appeal by granting permission to withdraw the Writ Petition with the liberty to file a fresh Writ Petition, presumably in view of the amalgamation. 6. The present appellant filed a Writ Petition before the High Court of Karnataka. The learned Single Judge dismissed the Writ Petition by the order dated 14th November 2017. One of the grounds of dismissal was that Karnataka Biotics had withdrawn the earlier Writ Petition without reserving any liberty to reagitate the same issue. By the impugned judgment, a writ appeal preferred by the appellant against the order of the Single Judge was dismissed on the ground that Karnataka Biotics had withdrawn the earlier Writ Petition without reserving any liberty to reagitate the issues invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was a contravention of the terms of the licence, and therefore, the respondents were well within their powers to impose the penalty. Learned senior counsel appearing for the appellant relied upon various decisions of the High Courts of Gujarat and Delhi to support his contentions. CONSIDERATION OF SUBMISSIONS 9. At the outset, we may note that the first error committed by the Division Bench and learned Single Judge was by recording a finding that the first Writ Petition filed by Karnataka Biotics was withdrawn without seeking a liberty to file a fresh Writ Petition. We may note here that on 9th February 2007, the first Writ Petition was filed by Karnataka Biotics. On 24th March 2009, there was an amalgamation of Karnataka Biotics. Even af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cence. In view of the grant of the licence, Karnataka Biotics was allowed to clear the imported capital goods at a concessional rate of 15 per cent. For non-payment of the balance customs duty demand, the customs authorities issued a show cause notice. Pursuant to the said notice, the bank guarantee furnished earlier by Karnataka Biotics was encashed. We have carefully perused the sanctioned rehabilitation scheme of Karnataka Biotics under SICA. Various reliefs and concessions were noted in the scheme. It provided for a waiver of payment of specific amounts. The relevant waiver clause reads thus: (ii) To waive the customs duty payable of Rs. 33.30 lakhs payable on account of nonfulfillment of export obligation and Rs.44.40 lakhs towards int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rade policy. 13. In the present case, there is no allegation made by the respondents against the appellant's predecessor of making or attempting to make any export or import in contravention of the FT Act, any Rules or orders made thereunder, or the foreign trade policy. Under the license granted to the appellant s predecessor, there was an obligation to export finished goods by earning foreign exchange equivalent to USD 2,59,948 within a period of five years. The allegation is of the failure to abide by the obligation to export the finished goods within a period of five years. So, there is no allegation of attempting to make an export or import, which is covered by Section 11 (2). There is no allegation against the appellant or its pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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