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TMI Blog2007 (4) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... in the show cause notice have been amply proved. It is further clear that the firm has no rebuttal evidence to adduce. In view of the above position, in exercise of the powers vested in me under Section 4-K of the Imports Exports (Control) Act, 1947, (hereinafter referred to as the 1947 Act) I hereby levy a penalty of Rs. 75 lakhs for misutilisation of the imported material in contravention of the provisions of Section 4-I(1) (a) of the said Act and further debar the firm and its Directors from making imports and receiving import licence/CCPs and receiving any imported material from STC/MMTC or any other canalizing agency and also from importing any material, machinery, etc. under OGL for 15 licensing periods from AM 1986 to AM 2000 for violation of the provisions of Clause 8(1)(b)(c)(f) and (h) of the imports (Control) Order, 1955." L.D. Textiles preferred a statutory appeal which was rejected by the Appellate Committee Cell, Government of India, Ministry of Commerce, New Delhi by order dated 14th January, 1992. Against that order L.D. Textile Industries Limited have preferred Writ Petition bearing Writ Petition No. 680 of 1992 before the High Court of Delhi. According to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts and Exports (Control) Act, 1947 as also the Import Control Order 1955 had been repealed and a new enactment known as Foreign Trade (Development Regulation) Act 1992 (hereinafter referred to as the F.T.D.R. Act) had come into force by repealing the Imports and Exports (Control Act, 1947). It was also submitted that Section 111(d) of the Customs Act conferred power to confiscate prohibited goods under the provisions of the Customs Act, 1962 and under any other law for the time being in force. An order passed by a functionary under the provisions of an Act, which has ceased to exist, could not be the basis for an order of confiscation under Section 111(2) of the Customs Act. On a specific query on behalf of the Appellants it was conceded that the point was not argued before the Tribunal when the Tribunal passed the impugned order. It was however, contended that upholding of the order of confiscation was an error made by the Tribunal which is apparent on the record. The learned Members of the Tribunal, however, noted that in so far as the contention that the prohibition imposed would cease to exist, on the coming into force of the new Act, relied on, Section 20 of the F.T.D.R. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd consequently the order is without jurisdiction. (c) It is next submitted that judgment of 14th November, 1986 passed by the Additional Chief Controller of Imports and Exports is not 'law' within the meaning of Section 2(33) of the Customs Act. The goods imported were, therefore, not prohibited goods to attract Section 112(d) of the Customs Act. For contravention of an order passed under the Imports (Control) Order 1955, action could have been taken under Section 5A of the Import and Exports (Control) Act, 1947. Consequent to its repeal and there be no corresponding law, the impugned order is liable to be set aside. On behalf of the respondents, learned Counsel submits that once an order has been passed under the Import Control Order of 1985, it was within the jurisdiction of the Respondent No. 2 to pass the order under the Customs Act and consequently the order cannot be faulted. It is next submitted that the order passed under the Import Exports (Control) Act, 1947 read with Imports (Control) Order 1955 considering the provisions of Section 20 of the FTDR Act, would be saved and consequently it was open to the Respondents to have passed the order. The impugned order, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re subordinate legislation and not judicial or quasi judicial orders. Under Section 5, it was open to the Central Government to formulate and announce an Export and Import policy. We may now gainfully reproduce Section 20 of the F.T.D.R. Act, which reads as under :- "20. (1) The imports and Exports (Control) Act, 1947 (18 of 1947) and the Foreign Trade (Development and Regulation) Ordinance, 1992 (Ordinance 11 of 1992) are hereby repealed. (2) The repeal of the Imports and exports (Control) Act, 1947 (18 of 1947) shall however, not affect, - (a) the previous operation of the Act so repealed or anything duly done or suffered thereunder, or (b) any right, privilege, obligation or liability acquired, accrued or incurred under the Act so repealed; or (c) any penalty, confiscation or punishment incurred in respect of any contravention under the Act so repealed; or (d) any proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, confiscation or punishment as aforesaid, and any such proceeding or remedy may be instituted, continued or enforced, and any such penalty, confiscation or punishment may be imposed or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Import Trade Control Harmonised System Code, vide Heading No. 550320.00, provided that polyester staple fibre, the item in question, is freely importable without any restriction whatsoever by anybody for any purpose. In view of that the goods could be imported by any person and similarly purchased by any person. 9. An analysis of the provisions of the Act of 1947 and the Import Control Order of 1955, would show that there was power, apart from imposing penalty by way of fine also for prosecution and conviction for a term punishable with imprisonment which could extend upto two years or with fine or both. Under the FTDR Act 1992, the provisions pertaining to prosecution have been omitted. The Act provides for search, seizure, penalty by way of fine which can be recovered as arrears of land revenue. Section 12 which is relevant, reads as under :- "12. No penalty imposed or confiscation made under this Act shall prevent the imposition of any other punishment to which the person affected thereby is liable under any other law for the time being in force." It would, therefore, be clear that if the person was liable under any other law then irrespective of the provisions of the F.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also not correct to say that the test is whether there is any provision in the rules to the effect that pending proceedings will lapse on omission of the rule under which the notice was issued. It is our considered view that in such a case the court is to look to the provision in the rule which has been introduced after omission of the previous rule to determine whether pending proceedings will continue or lapse. If there is a provision therein that pending proceedings shall continue and be disposed of under the old rule as if the rule has not been deleted or omitted then such proceedings will continue. If the case is covered by Section 6 of the General Clauses Act or there is a pari materia provision in the statute under which the rule has been framed, in that case also the pending proceedings will not be affected by omission of the rule. In the absence of any such provision in the statute or in the rule the pending proceedings would lapse on the rule under which the notice was issued or proceedings were initiated being deleted/omitted." The Constitution Bench judgment was considered by the Supreme Court in General Finance Company Anr. v. Assistant Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , to have exercised jurisdiction under Section 111(d) of the Customs Act to pass the impugned order. Exercise of jurisdiction under Section 111(d) would arise, if the goods are imported or brought within the Indian customs waters, contrary to any prohibition imposed by or under this Act or any other law for the time being in force. We may gainfully reproduce Section 111(d) which reads as under :- "111. Confiscation of improperly imported goods, etc. - The following goods brought from a place outside India shall be liable to confiscation :- (a) .................. (b) .................. (c) .................. (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force." Similarly, we may reproduce the definition of "prohibited goods" under Section 2(33) which reads as under :- "2.(33) "prohibited goods" means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vember, 1986 passed by the quasi judicial authority/Tribunal would not be Indian Law or enactment and consequently the provisions of Section 111(d) of the Customs Act would not be attracted. The prohibition had to be under the Customs Act or any other law for the time being in force. The import of goods were not prohibited. They are only subject to Customs duties, nor is there any law in force prohibiting the import of goods. The order under the 1986 Act, could have been enforced if say, Section 5A of the Act of 1947 was saved or a similar provision like Section 5A was there in the F.T.D.R. Act, 1992 making punishable acts, which are in violation of any order make under the Act of 1947 or rules or policy made thereunder. The prohibition under the order of 1986 on L.D. Textiles, was so long as a license was required for importing the goods. In other words Obron Impex (P) Limited or L.D. Textiles under the Import or Export Policy of 1997-2002 could have imported the goods, even considering the findings by the Respondents, that the company is nothing but another incarnation of L.D. Textiles on lifting the corporate veil as long as a licence was not required for its import. In our opin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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