Karnataka High Court
M/S Raj Fishmeal And Oil Co vs Director General Of Foreign Trade on 6 September, 2019
Author: B.Veerappa
Bench: B. Veerappa
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 6TH DAY OF SEPTEMBER, 2019
BEFORE
THE HON' BLE MR. JUSTICE B. VEERAPPA
WRIT PETITION Nos.57344-57346/2014(GM-RES)
BETWEEN:
1. M/S RAJ FISHMEAL & OIL CO
3RD CROSS, MALPE-MADHWARAJ ROAD,
MALPE-576 108,
UDUPI DISTRICT,
REPRESENTED BY ITS POA HOLDER
SHRI PRAKASH.
2. M/S JANATHA FISH MEAL & OIL PRODUCTS
MANOOR FISHERIES ROAD,
KOTA-576 221.
UDUPI DISTRICT.
REPRESENTED BY ITS MANAGING PARTNER
SHRI ANAND C. KUNDER
3. M/S. MUKKA SEA FOOD INDUSTRIES PVT. LTD,
TRINITY COMMERCIAL COMPLEX,
1ST FLOOR, N.G. ROAD,
ATTAVAR, MANGALORE-575001,
REPRESENTED BY ITS DIRECTOR
MR. MOHAMMED HARIS.
... PETITIONERS
(BY SRI B. N. GURURAJ, ADVOCATE)
AND:
1. DIRECTOR GENERAL OF FOREIGN TRADE
UDYOG BHAWAN,
2
SUNSAD MARG,
NEW DELHI-110003.
2. DEPUTY DIRECTOR GENERAL OF
FOREIGN TRADE,
6TH FLOOR, C &E WING,
KENDRIYA SADAN,
KORAMANGALA,
BANGALORE-560095.
... RESPONDENTS
(BY SMT. ANUPAMA HEGDE, CGC FOR R1 & R2)
......
THESE WRIT PETITIONS ARE FILED UNDER
ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA
PRAYING TO DIRECT THE RESPONDENT-1 TO CONSIDER
THE REPRESENTATION DATED 21.10.2014 AT ANNEXURE-
A AND QUASH THE PROCEEDINGS COMMENCED UNDER
SHOW CAUSE NOTICES ALL DATED 31.10.2014 VIDE
ANNEXURE-C, C1 & C2.
THESE WRIT PETITIONS COMING ON FOR
PRELIMINARY HEARING IN 'B' GROUP THIS DAY, THE
COURT MADE THE FOLLOWING:
ORDER
These writ petitions are filed by the petitioners for a writ of certiorari to quash the proceedings commenced under show cause notices in F No.07/21/051/Customs /3/AM10 dated 31.10.2014, at Annexure-C, F No. 07/ 21/051/Customs/1/AM10 dated 31.10.2014 at Annexure-C1, and F No.07/21/051/Customs/2/AM10 3 dated 31.10.2014 at Annexure-C2 and for a writ of mandamus to direct the first respondent to consider the representation dated 21.10.2014 vide Annexure-D.
2. It is the case of the petitioners that they are engaged in the business of manufacture of fish oil, fish meal and export of the same from India. Under the Foreign Trade Policy administered by the respondents, the petitioners claimed duty credit under the Duty Exemption Pass Book (DEPB) under the policy. On 24.03.2009, the Policy Interpretation Committee, which is an advisory body to the first respondent, placed interpretation on relevant DEPB entry to hold that fish oil and fish meal are Value Added products and are to be covered by the said DEPB entry. Consequently, after November 2009, the petitioners were denied DEPB benefit. It is further case of the petitioners that, between 2009 and 2014, petitioners made representations to the Minister of Commerce and 4 Industries, Government of India, and to the first respondent, through their Trade Association i.e., "Indian Fish Meal and Fish Oil Exporters Association, India", but to no avail. In the meantime, the Regional Joint Director General of Foreign Trade, Bengaluru, had issued demand notice on 19.01.2010 for recovery of DEPB credit benefits for the past period, prior to the interpretation by Policy Interpretation Committee (PIC). But, in view of the various representations made to the Minister and the first respondent, no action was initiated. Later, second respondent issued show cause notice for recovery of DEPB credit for past period along with interest of 15% per annum, which would cause irreparable loss to the petitioners. Based on the subsequent change of interpretation or opinion, demand was raised against the petitioners for the past period arbitrarily. It is contended that the impugned show cause notices vide Annexures-C, C1 and C2 are in violation of Article 14 of the Constitution of India which 5 is hit by doctrine of promissory estoppel. Therefore, petitioners are before this Court for the reliefs sought for.
3. The respondent Nos.1 and 2 filed statement of objections and contended that the impugned show cause notices are appealable under Section 15 of the Foreign Trade (Development and Regulations) Act, 1992 ('Act' for short). Therefore, the writ petitions are not maintainable. The petitioners have not availed the opportunity to be in person before the Appellate Board and denied all other averments as false. Therefore, sought to dismiss the writ petitions for not having exhausted the statutory appellate process under the 'Act'.
4. I have heard the learned counsel for the parties to the lis.
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5. Sri B.N.Gururaj, learned counsel for the petitioners contended that impugned action of the respondents is erroneous, contrary to the material on record and are in utter violation of the principles of natural justice. The notices vide Annexures-C, C1 and C2 seek to give retrospective effect to the interpretation placed by the PIC on the disputed entry. The petitioners are engaged in the business of manufacture of fish oil and fish meal from 2007. There was no demand for recovery of DEPB benefit to the there is no demand for payment. Absurdly notice is issued to recover for the amount for past period which is impermissible and impugned notices issued are in utter violation of Articles 14, 19(1)(g) and 21 of the Constitution of India. He further contended that the petitioners are not seeking extension of DEPB benefit for their export goods. The petitioners await the decision of the Government of India. Before taking any decision by the Government, the impugned notices issued by second respondent 7 cannot be sustained. Inspite of petitioners knocking the doors of the concerned authorities, time and again, either Government of India or the concerned Ministers have not taken any decision on the representation. In the meanwhile, if the notices issued are implemented, petitioners will be put to great hardship. Inspite of representation vide Annexure-D dated 21.10.2014, till today, the first respondent has not considered the same. Therefore, he sought to allow the writ petitions.
6. Since, Sri Prem Kumar and Sri Ashok N. Patil, learned Central Government Counsel did not appear before Court, on the directions issued by this Court, Smt.Anupama Hegde, learned Central Government Counsel, appeared on behalf of the respondent Nos.1 and 2, and reiterating the averments made in the statement of objections, sought to justify the impugned action of the respondents and contended that the very writ petitions filed against the show cause notices 8 issued by the second respondent are pre-mature and it is for the petitioners to file objections to the show cause notices and to consider the same and pass orders and therefore, sought to dismiss the writ petitions.
7. Having heard the learned counsel for the parties, it is the specific case of the petitioners that the petitioners are engaged in the business of manufacture of fish oil, fish meal and export of the same from India. On 24.03.2009, the PIC decided to exclude fish meal and fish oil from the scope of DEPB scheme under the Foreign Trade Policy. The first representation by the Trade body to the Minister of Commerce and Industries to restore DEPB benefit was made on 28.10.2009. On 19.01.2010, the demand notices were issued by the Deputy Director General of Foreign Trade for recovery of DEPB credit. On 25.01.2010, representation was made by the Trade Body to the Chairman, MPEDA, to intercede on their behalf and inspite of repeated 9 representations made to the concerned Minister and concerned authority of the Central Government, no decision has been taken till today to exclude the fish oil and fish meal from the scope of Duty Exemption Pass Book Scheme under the Foreign Trade Policy. It is the case of the petitioners that by the impugned notices, Annexures-C, C1 and C2, the respondents sought to recover DEPB benefit for the past period, when the representations made by the petitioners are pending before the concerned authority for consideration. The petitioners also made representation as per Annexure- D. In the meanwhile, impugned notices are issued.
8. A careful perusal of the impugned show causes notices as per Annexures-C, C1 and C2 issued by the second respondent directing the petitioners to appear before the concerned Deputy Director General of Foreign Trade, by filing objections and also advised to appear after seeking appointment through telephone or by 10 sending an e-mail, well in advance and the notice also depicts that the notice is issued without prejudice to any other action contemplated against the petitioners and its Directors/Partners/Proprietors under Foreign Trade (Development and Regulation) Act, 1992 or Rules issued thereunder.
9. If the petitioners are aggrieved by the impugned notices, they ought to have filed objections before the second respondent and it is for the second respondent to consider the objections and verify as to whether the decision of the PIC to exclude fish meal and fish oil from the scope of DEPB scheme under the Foreign Trade Policy, is in accordance with law. Before approaching the authority concerned, the petitioners are before this Court challenging the impugned show cause notices.
10. It is well settled that the writ petitions challenging the show cause notices are not maintainable and it is for the petitioners to file objections and show cause to 11 the second respondent as to how they are not liable to pay the duty credit.
11. Admittedly, except the representation dated 21.10.2014, vide Annexure-D, petitioners have not filed objections to the impugned show cause notices. Therefore, the present writ petitions are not maintainable.
12. This Court, while issuing notice to the respondents, stayed operation of impugned show causes notices vide Annexures-C, C1 and C2, as long back as on 17.12.2014. Till today, respondents have not filed any application seeking to vacate the stay.
13. In view of the above, it is suffice to direct the petitioners to file objections to the impugned show cause notices vide Annexures-C, C1 and C2 issued by the second respondent, within a period of six weeks from the date of receipt of certified copy of this Order. If 12 such objections are filed, it is for the second respondent to consider the same and pass appropriate Orders, considering the representation dated 21.10.2014 vide Annexure-D, in accordance with law. Till such consideration, the respondents shall not take any precipitative action against the petitioners. Accordingly, writ petitions are disposed off.
Sd/-
JUDGE kcm