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TMI Blog2003 (5) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... licences to import raw material free of customs duty subject to actual user conditions. Under the policy, the petitioners also applied for issue of advance licence. A licence to import Dupion Yarn, Mulberry Raw Silk and Fusing Lining Anatrial was issued to the petitioners for manufacturing the resultant product, description of which was given in the Duty Exemption Entitlement Certificate (DEEC). The licence was issued to the petitioner subject to the following conditions : "(i) They would export 5,400 Nos. of mulberry mixed silk jackets/blazer with fusing lining material for an FOB value of Rs. 36,42,800 (US $ 1,41,603.66) within a period of nine months from the date of clearance of first consignment. (ii) To ensure fulfilment of export obligation they would, before clearance of the first consignment, execute a bond for Rs. 42,74,529.16 with Bank Guarantee for Rs. 5,91,729.16. (iii) The goods imported against the said Advance Licence would be utilised exclusively in the manufacturing of the resultant produce. (iv) In the event of their failure, (A) to fulfil the export obligation within the prescribed time limits stipulated above or (B) to produce t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use 10(1) of the aforesaid order as to why penalty be not imposed upon them under Section 4-I(1)(a) of the said Act and why the petitioners be not debarred from importing any goods, receiving import licence and allotment of imported goods through STC/MMTC or any other similar agency under Clause 8(1) of the Imports (Control) Order, 1955 read with Section 20(2) of the Foreign Trade (Development and Regulation) Act, 1992. 3.In the show cause notice it was stated by the respondents that "as you have failed to fulfil the remaining export obligation imposed under the said licence, there are, prima facie, reasons to believe that the duty free imported goods valued at Rs. 9,10,125 (CIF) have been utilised by you and also failed to fulfil the balance export obligation for F.O.B. value of Rs. 27,20,462 within stipulated time and thus violated the conditions of advance licence/LUT". Reply to the show cause notice was filed by the petitioner on 14th June, 1995. After giving personal hearing to the petitioners, the Additional Director General of Foreign Trade passed the order dated 13th August, 1995 and considering the shortfall in export to the tune of Rs. 27,20,462, he held the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral of Foreign Trade who had the power to entertain and adjudicate upon the show cause notice and an appeal against the order of Joint Director General of Foreign Trade was to lie to the Additional Director General of Foreign Trade. It is submitted that since the show cause notice has been adjudicated upon the Additional Director General of Foreign Trade, the petitioners have been deprived of their right to appeal to the Additional Director General of Foreign Trade and thus prejudice has been caused to them. 6.It is not in dispute that under the Notification dated 31st December, 1993 the Joint Director General of Foreign Trade could adjudicate upon and entertain the show cause notices in respect of goods of the value of up to Rs. 10 lacs and an appeal against his order could lie to the Additional Director General of Foreign Trade. However, can it be said that simply because the show cause notice had been adjudicated upon by the Additional Director General of Foreign Trade, any prejudice has been caused to the petitioners or the order passed by him is without jurisdiction? The answer, in my view, has to be in the negative. In my opinion, there cannot be any doubt about the propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .56% against the stipulated value addition of 26.56%". It was while interpreting this show cause notice that the Court observed that nowhere in the show cause notice it was averred that the petitioners had misused the imported goods and if that was the case then the same would not fall under Section 4-I(1)(a), as there was no allegation that the goods had not been used for the purpose for which they were imported. The Court, therefore, held that until and unless allegations were made in the show cause notice that the goods imported under the OGL licence were misutilised, penalty could not be imposed under Section 4-I(1)(a) of the Act. This judgment, in my view, would not in any manner assist the petitioner. In the present case, the show cause notice clearly states that as the petitioners had failed to fulfil the remaining export obligations imposed under the licence, there were, prima facie, reasons to believe that the imported goods had been utilised by the petitioners and they had thus violated the conditions of advance licence. Paragraph 5 of the show cause notice, which have a bearing on this case, reads as under : "As you have failed to fulfil the remaining export obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the case of the petitioner would not fall under Section 4-I(1)(a), as there was no allegation that the goods had not been used for the purpose for which it was imported under the OGL licence". That judgment was, therefore, given on the basis that no allegations were made in the show cause notice that the goods had been used for the purpose for which they were imported under the licence. In the present case, the show cause notice clearly says that the duty free imported goods valued at Rs. 9,10,125 have been utilised by the petitioner and they have also failed to fulfil the balance export obligation within the stipulated time and thus violated the conditions of the advance licence attracting provisions of Section 4-I(1)(a) of the Import and Export (Control) Act. Allegations having been clearly made in the show cause notice about the utilisation of the imported goods by the petitioner and their having violated the conditions of the advance licence, in my opinion, the judgment of this Court in Optima Impex Private Limited v. Union of India (supra), will not be application to the present case. Petitioners having thus used or utilised the goods otherwise than in accordance with the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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