9911796707
TMI Blog2024 (7) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the FTDR Act, the associated Rules and Orders, or the Foreign Trade Policy. In the present case, there is no allegation that the petitioner attempted to make any export or import in violation of the FTDR Act of 1992, or the Rules, Orders made thereunder, or the Foreign Trade Policy. In similar circumstances, the Supreme Court in the case of M/S. EMBIO LIMITED [ 2024 (5) TMI 684 - SUPREME COURT ] ruled that when the allegation pertains to the failure to fulfill the obligation to export goods within a specified period of five years, and there is no allegation of attempting to make an export or import, the imposition of a penalty under Section 11 (2) of the FTDR Act of 1992 cannot be sustained. In the absence of any contravention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mum level of Net Foreign Exchange Earning as a Percentage of Export (NFEP). The petitioner was required to import capital goods worth US $14,290,000 for their project and committed to an export turnover of US $42,240,000 over five years. 3. In accordance with the Letter of Permission (LOP), the petitioner entered into a Letter of Undertaking (LOU). As per the terms of the undertaking, the petitioner was required to earn a minimum of US $42,240,000 by exporting its entire production. In the event of failing to meet the terms and conditions of the LOP/LOU, including the export obligation, or the conditions required for exemption from customs duty under the Export and Regulation Policy, the petitioner would be liable for payment of customs dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the FTDR Act, 1992, leading to the filing of this petition. 5. The learned counsel for the petitioner argued that the non-fulfillment of the obligations stated in the letter of permission/letter of undertaking, specifically not exporting the minimum quantity of finished goods, does not constitute a contravention of the provisions of the FTDR Act, 1992. He asserted that Section 11 (2) of the FTDR Act, 1992, can only be invoked if the petitioner had attempted to make any export or import in violation of the provisions of the Act, Rules, or export and import policy. Therefore, in the absence of the petitioner contravening the provisions of the Rules or the export and import policy, the penalty imposed under Section 11 (2) of the FTDR Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the value of the goods or services or technology in respect of which any contravention is made or attempted to be made, whichever is more. (emphasis added) 9. A reading of the provision makes it clear, Sub-section (2) can be invoked only when a person attempts to or succeeds in making an import or export in contravention of the provisions of the FTDR Act, the associated Rules and Orders, or the Foreign Trade Policy. In the present case, there is no allegation that the petitioner attempted to make any export or import in violation of the FTDR Act of 1992, or the Rules, Orders made thereunder, or the Foreign Trade Policy. 10. In similar circumstances, the Supreme Court in the case of M/S. EMBIO LIMITED ruled that when the allegation pertai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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