Madras High Court
M/S. S.S.D. Oil Mills Company Limited vs The Assistant Director General Of ... on 16 June, 2022
Bench: R. Mahadevan, Mohammed Shaffiq
WA No. 2054 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 16.06.2022
CORAM
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
and
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
W.A. No. 2054 of 2021
and
C.M.P. Nos.13039 & 13041 of 2021
M/s. S.S.D. Oil Mills Company Limited
Represented by its Director
Shri R. Deepan Dorai
No.52, 48th Street, Ashok Nagar
Chennai 600 083 .. Appellant
Versus
1. The Assistant Director General of Foreign Trade
26, Haddows Road, Shastri Bhavan Annexe
Chennai 600 006
2. The Joint Director General of Foreign Trade
26, Haddows Road, Shastri Bhavan Annexe
Chennai 600 006
3. The Additional Director General of Foreign Trade
26, Haddows Road, Shastri Bhavan Annexe
Chennai 600 006
4. The Director General of Foreign Trade
Udyog Bhawan, H-wing, Gate No..02
Maulana Azad Road, New Delhi – 110 011
https://www.mhc.tn.gov.in/judis
1/9
WA No. 2054 of 2021
5. Export Promotion Capital Goods (EPCG) Committee
Director General of Foreign Trade
Udyog Bhawan, H-wing, Gate No.02
Maulana Azad Road, New Delhi 110 011
6. The Deputy Commissioner of Customs (EPCG)
Custom House, No.60, Rajaji Salai
Chennai 600 001 .. Respondents
Writ Appeal filed under Clause 15 of Letters Patent against the order
dated 25.03.2021 made in W.P. No.383 of 2017.
For Appellant : Mr. Hari Radhakrishnan
For Respondents 1 to 4 : Mr. V. Ashok Kumar
For Respondents 5 & 6 : No appearance
JUDGMENT
[Judgment of the Court was delivered by R.MAHADEVAN, J] Challenging the order dated 25.03.2021 passed by the learned Judge in W.P. No. 383 of 2017, the appellant / assessee has come up with this appeal.
2.The necessary facts leading to the filing of this appeal, would run thus:
2.1. The appellant is in the business of import and export and has obtained Import Export Code No.0492020779. During the course of the same, they had obtained four EPCG authorisations from the third respondent for import of vapour absorption heat pump, membrane filter press, lenser mixed https://www.mhc.tn.gov.in/judis 2/9 WA No. 2054 of 2021 pack PP membrane, Deliniting Hulling & Oil Pressing Equipment, Diesel Generating Set and Centrifugal Separator. With the use of the imported goods, the appellant has an obligation to export Vanaspathi and Margarine.
2.2. While so, they were issued with a show cause notice dated November, 2013 proposing to impose penalty and also for suspension of import export code as per section 11(7) of the Foreign Trade (Development and Regulation) Act, 1992.
2.3. Subsequently, the first respondent passed the order-in-original dated 16.01.2014 imposing penalty of Rs.39,42,308/- on the appellant, on the premise that export documents were not submitted to prove fulfilment of export obligation. Challenging the same, the appellant preferred an appeal before the third respondent, who examined all the export documents and passed an order-
in-appeal dated 11.02.2016 dismissing the appeal, on the ground that the export of alternate products was inadmissible, as the EPCG Authorisation has been issued in September 2002, whereas the amendment of para 5.4.1 of the FTP was applicable only from January, 2004. Aggrieved over the same, the appellant preferred a review before the fourth respondent, which also ended in dismissal.
2.4. Subsequently, as per the communication dated 28.06.2016 sent by the Joint Director of Foreign Trade, New Delhi, the appellant made a https://www.mhc.tn.gov.in/judis 3/9 WA No. 2054 of 2021 representation dated 26.08.2016 to the fifth respondent, who ultimately, rejected the same, against which, the writ proceedings are pending.
2.5. In the mean while, the appellant came to know that the import export code has been cancelled. However, no order was passed, cancelling or suspending the import export code. Therefore, the appellant approached the respondent authorities in this regard. Finding no response, they have preferred WP.No.383 of 2017, to quash the order of cancellation of their import export code no.0492020779 by the third respondent and for consequential direction.
2.6. By order dated 25.03.2021, the learned Judge has disposed of the said writ petition, with the following directions:
(i)The jurisdictional officer under the Foreign Trade (Development and Regulation) Act, 1992 should issue appropriate show cause notice to the appellant within a period of 30 days from the date of receipt of the order, calling upon them to explain, as to why the import export code should not be cancelled;
(ii)On such show cause notice being issued within such time, the appellant should file a reply within a period of 30 days thereafter.
(iii)The jurisdictional officer should thereafter pass appropriate order in accordance with law within a period of 90 days after giving adequate opportunity to the appellant being heard.
(iv)The status quo as on date should continue for a period of 90 days and would be subject to further outcome of the proposed order to be passed by the jurisdictional officer under the provisions of the Act.
The aforesaid order of the learned Judge is questioned in this writ appeal.
3.The prime contention of the learned counsel for the appellant is that the respondents have cancelled the Import Export Code issued to the appellant https://www.mhc.tn.gov.in/judis 4/9 WA No. 2054 of 2021 by violating Section 8 of the Foreign Trade (Development and Regulation) Act, 1992, as per which, a license can be suspended or cancelled only after giving show cause as well as personal hearing, but in the present case, no such show cause notice or personal hearing has been granted to the appellant prior to suspension of the license. Though the learned Judge has taken note of the same, while disposing the writ petition, erred in directing the jurisdictional officer to issue a fresh show cause calling upon the appellant to explain, as to why the Import Export Code issued to them should not be cancelled. The learned counsel further submitted that in the show cause notice issued during the month of November 2013, there was only a proposal under Section 11 (7) of the Act for suspension and not cancellation of the licence. Thus, according to the learned counsel, show cause notice under Section 8 of the Act is mandatory, without which, the department is not justified in either cancelling or superseding the IEC licence issued to the appellant. Therefore, the learned Judge sought to allow this appeal by setting aside the order of the learned Judge as well as the order impugned in the writ petition.
4.On the other hand, the learned Central Government Standing Counsel appearing for the respondents submitted that the appellant has not discharged the export obligation undertaken in the authorisations issued to them and https://www.mhc.tn.gov.in/judis 5/9 WA No. 2054 of 2021 hence, the IEC licence was suspended on 17.03.2014. However, the learned counsel fairly conceded that no separate show cause notice was issued to the appellant prior to the cancellation of the IEC code. Therefore, the learned Judge has rightly directed the jurisdictional officer to issue show cause notice as contemplated under the Act, by the order impugned herein, which does not require any interference by this court.
5.Heard the learned counsel appearing for both sides and also perused the materials available on record.
6.It is not in dispute that the appellant was issued with import export licence bearing code no.0492020779, besides they had obtained four EPCG authorizations. Since they failed to comply with the export obligation, during the month of November, 2013, they were issued with show cause notice, proposing to levy penalty. In the very same show cause notice issued by the third respondent, there was a proposal made as to why the Import Export Code issued to the appellant should not be suspended under Section 11(7) of the FTDR Act, 1992 as amended during 2010. However, no show cause notice as contemplated under the Act, was issued and no opportunity was provided to the appellant, before suspending the IEC, by the third respondent. https://www.mhc.tn.gov.in/judis 6/9 WA No. 2054 of 2021
7.Taking note of the fact that the said show cause notice issued in November, 2013, culminated in an order dated 16.01.2014 passed by the first respondent and thereafter, no further proceedings were initiated against the appellant prior to cancellation of the IEC, the learned Judge while disposing the writ petition filed by the appellant, challenging the order of cancellation of IEC passed by the third respondent, has correctly directed the jurisdictional officer under the Act, to issue appropriate show cause notice to the appellant, within a period of 30 days from the date of receipt of a copy of the order; further directed the appellant to file a reply within a period of 30 days; and thereafter, directed the jurisdictional officer to pass appropriate order, in accordance with law, within a period of 90 days, after giving adequate opportunity of hearing to the appellant. Further, the interest of the appellant was rightly protected by extending the status quo order for a period of 90 days. Therefore, this court is of the opinion that the order of the learned Judge so passed does not call for any interference.
8.It is brought to the notice of this court that pursuant to the order of the learned Judge, show cause notice has been issued by the Joint Director General of Foreign Trade in File No.I(124) /Dqr/Addl.DGFT/ Che/AM 14/ECA, dated 11th August, 2021. Therefore, it is open to the appellant to raise all the https://www.mhc.tn.gov.in/judis 7/9 WA No. 2054 of 2021 contentions available to them, before the authority concerned, by way of reply or during the course of personal hearing.
9.In fine, this writ appeal stands dismissed. No costs. Consequently, connected miscellaneous petitions are closed.
[R.M.D., J.] [M.S.Q., J.]
16.06.2022
Index : Yes/No
dhk/rsh
To
1. The Assistant Director General of Foreign Trade 26, Haddows Road, Shastri Bhavan Annexe Chennai 600 006
2. The Joint Director General of Foreign Trade 26, Haddows Road, Shastri Bhavan Annexe, Chennai 600 006
3. The Additional Director General of Foreign Trade 26, Haddows Road, Shastri Bhavan Annexe, Chennai 600 006
4. The Director General of Foreign Trade Udyog Bhawan, H-wing, Gate No..02 Maulana Azad Road, New Delhi – 110 011
5. Export Promotion Capital Goods (EPCG) Committee Director General of Foreign Trade Udyog Bhawan, H-wing, Gate No.02 Maulana Azad Road, New Delhi 110 011
6. The Deputy Commissioner of Customs (EPCG) Custom House, No.60, Rajaji Salai Chennai 600 001 https://www.mhc.tn.gov.in/judis 8/9 WA No. 2054 of 2021 R.MAHADEVAN, J.
and MOHAMMED SHAFFIQ, J.
dhk/rsh WA No. 2054 of 2021 16.06.2022 https://www.mhc.tn.gov.in/judis 9/9