JUDGMENT Hon’ble Rajes Kumar, J.—By means of the present petition the petitioner is challenging the order dated 11.2.2008, passed by the Additional Director General of Foreign Trade, New Delhi, by which the appeal filed by the petitioner against the order dated 11.8.2006, passed by the Joint Director General of Foreign Trade, is rejected. 2. The brief facts giving rise to the present writ petition are that the petitioner is a Partner of M/s. D.B. Exports, Moradabad. M/s. D.B. Exports was involved in the manufacturing of Brass Handicraft/Artware. On the application dated 3.9.2002, M/s. D.B. Exports, Moradabad, obtained an import licence, bearing No. 2910003595 dated 27.9.2002, for the import of 200 mt. ton of Brass Scrap for C.I.F. Value of Rs. 1,00,00,000/- with an obligation to export 186.047 mt. ton of Brass Artware having a F.O.B. Value of Rs. 1,25,00,040/- within a period of 18 months commencing from the date of issue of licence subject to the various terms and conditions. The export obligation period expired on 26.3.2004. On being asked, after the expiry of the export obligation period, the licence holder informed to have imported 195.501 mt. ton Brass Scrap for Rs. 1,01,99,212/- free of customs duty. In the absence of any information about the export of Brass Artware, a notice dated 27.3.2006 was issued to M/s. D.B. Exports, Moradabad, and to its Partners, viz. Brahma Prakash Upadhyay and Shahid Khan, asking them to show-cause why action should not be taken against them for imposition of penalty under Section 11 (2) of the Foreign Trade (Development & Regulation) Act 1992 (called the ‘Act’ for short) for their having failed to comply with the conditions regulating the imports made by them under licence No. 2910003595 dated 27.9.2002. The notiee claimed to have made 10 export shipments totalling 82.160 mt. ton Brass Artware for F.O.B. Value of Rs. 80,64,881/-. It appears that the petitioner has not filed any reply to the notice. The adjudicating authority further issued notice to represent their case personally but neither any reply was filed nor appearance was made and, therefore, the adjudicating authority proceeded to pass the ex parte order. He passed the order on 11.8.2006. The adjudicating authority in exercise of power under Section 13 of the Act imposed penalty of Rs. 3 crores on M/s. D.B. Exports, Moradabad, as well as on its partners, viz. Brahma Prakash Upadhyay and Shahid Khan.
He passed the order on 11.8.2006. The adjudicating authority in exercise of power under Section 13 of the Act imposed penalty of Rs. 3 crores on M/s. D.B. Exports, Moradabad, as well as on its partners, viz. Brahma Prakash Upadhyay and Shahid Khan. The said penalty was held payable in addition to the customs duty and interest etc. as payable on the material so imported by the petitioner against the said advance licence. 3. Being aggrieved by the order of the Joint Director General of Foreign Trade, the petitioner filed appeal before the Director General of Foreign Trade, New Delhi, which has been dismissed by the impugned order. A perusal of the order reveals that the date of hearing was fixed on 8 days but the petitioner did not appear and, therefore, the ex parte order was passed. 4. Heard Sri Govind Krishna, learned counsel for the petitioner and Sri Deepak Verma appearing on behalf of the respondents. 5. Learned counsel for the petitioner submitted that the Director General of Foreign Trade has wrongly mentioned that on the date fixed the petitioner did not appear. He submitted that the petitioner appeared on 10.9.2007 and moved the adjournment application, Further the adjournment application was moved on 5.11.2007. On 27.8.2007 two duplicate sets of appeal were filed. The petitioner further appeared on 5.12.2007 in respect of which Visitor’s Pass No. 758348 was obtained. In support of his contention he referred Annexure 11 to the writ petition. In this view of the matter he submitted that the appellate authority has wrongly observed that the petitioner could not appear on 29.1.2007, 26.2.2007, 30.5.2007, 3.7.2007, 10.9.2007, 15.10.2007, 5.11.2007, 5.12.2007, 9.1.2008 and 21.1.2008. He submitted that in the counter-affidavit the issue of gate pass and the receipt for filing of adjournment applications have not been denied. In this view of the matter he submitted that the appellate order is liable to be set aside and the matter may be remanded back to the appellate authority to decide the appeal afresh. On merit, he submitted that before the adjudicating authority the petitioner has filed the details of 10 export shipments totalling 82.160 mt. ton Brass Artware. He submitted that the petitioner applied for extension of export obligation period which was illegally rejected. In case if the period could be extended, the petitioner would have made the export towards import licence obligation.
On merit, he submitted that before the adjudicating authority the petitioner has filed the details of 10 export shipments totalling 82.160 mt. ton Brass Artware. He submitted that the petitioner applied for extension of export obligation period which was illegally rejected. In case if the period could be extended, the petitioner would have made the export towards import licence obligation. He further submitted that the penalty proceedings is a quasi criminal proceeding and the penalty will not be imposed unless the party either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. In support of the contention he relied upon the decision of the Apex Court in the case of Hindustan Steel Ltd. v. State of Orissa, (1983 ITR 26). 6. Learned Standing Counsel submitted that in pursuance of the import licence the petitioner imported 195.501 mt. ton Brass Scrap for Rs. 1,01,99,212/-, free from customs duty. Under the terms of the import licence the petitioner had to export Brass Artware within a period of 18 months commencing from the date of issue of licence which expired on 26.3.2004. The petitioner failed to comply with the obligation within the stipulated period. It is submitted that the petitioner has furnished the detail of 10 export shipments totalling 82.160 mt. ton of the Brass Artware for F.O.B. Value of Rs. 80,64,881/-. On the enquiry a report was received from the Mumbai General Unit of D.R.I. informing that it had not made any export against shipping bill Nos. 2000009640 dated 27.2.2003 and 200009629 dated 27.2.2003 and had submitted forged shipping bills etc. in support of their claim. He submitted that the petitioner has not filed any reply before the adjudicating authority and• has also not pleaded their case before the appellate authority, despite several opportunities were given. He submitted that the petitioner is enjoying the benefit of the customs duty exemption, availed during the period 200204, he submitted that even before this Court the petitioner has not furnished any detail for the export obligation. Therefore, the petitioner is not entitled for any relief. He further submitted that along with the writ petition the photocopy of only one visitor’s pass No. 958348 dated 5.12.2007 has been filed. In the said pass the name of the petitioner is not mentioned. The name of one Navneet is mentioned.
Therefore, the petitioner is not entitled for any relief. He further submitted that along with the writ petition the photocopy of only one visitor’s pass No. 958348 dated 5.12.2007 has been filed. In the said pass the name of the petitioner is not mentioned. The name of one Navneet is mentioned. It is not clear that for what purpose Sri Navneet had obtained the visitor’s pass. He further submitted that mere issue of visitor’s pass does not prove actual appearance being put before the appellate authority. 7. Having heard learned counsel for the parties, I have perused the impugned orders and the rival submissions. 8. It is appropriate to refer the findings recorded by the adjudicating authority and the appellate authority, which are as below : Finding of the adjudicating authority : “8. The export obligation period expired on 26.3.2004. On being asked after the expiry of export obligation period, the licence holder informed to have imported 195.501 MT of Brass Scrap for Rs. 10199212/- free of custom duty. The noticee also claimed to have made 10 export shipments totaling 82.160 MT of Brass Artwares for FOB Value of Rs. 8064881/-. They applied for extension in the export obligation period which was rejected for want of composition fee etc. In the meantime a report was received from the Mumbai Zonala Unit of DRI informing that the noticee had not made any export against shipping bill Nos. 2000009640 dated 27.2.2003 and 200009629 dated 27.2.2003 and had submitted forged shipping bills etc. in support of their claim to have fulfilled export obligation partially. It is pertinent to mention here that at no point of time any documents evidencing the export made was submitted by the noticee. Hence there is no justification for me to accept their such claim of having made exports. Even if one goes by the claim of the noticee with respect to the import and export effected by them, they still have an admitted liability to pay customs duty and interest on 107.174 MT of Brass Scrap imported by them duty free under this licence. The noticee has not paid a single penny towards their liability towards customs duty and interest on this unutilized imported material. 9.
The noticee has not paid a single penny towards their liability towards customs duty and interest on this unutilized imported material. 9. From what has been stated herein before it is amply clear that the noticee did not .submit any documents evidencing the exports made by them under this licence and failed to get their case regularized by making requisite payments. Therefore, they have contravened the conditions regulating the exports made by them under the above referred advance licence. Their such action attract action against them under Section 11(2) of the Foreign Trade (Development and Regulation) Act 1992, and hence imposition of penalty. 10. Therefore, keeping in view the facts and circumstances of the case and in view of the powers vested in me under Section 13 of the Foreign Trade (Development and Regulation) Act 1992, the undersigned imposes a penalty of Rs. 30000000/- (Rupees Three crores only) on M/s. D.B. Exports Moradabad as well as on its partners Sri Brahm Prakash Upadhayay and Shri Shahid Khan The said penalty is payable in addition to the customs duty and interest etc. as payable on the material so imported by the noticee against the said advance licence." Finding of the appellate authority : “3. Aggrieved by the above-mentioned order-dated 11.8.2006, M/s. D.B. Exports filed an appeal. Till December 2007 the matter was considered by my predecessor in office and the appellants were given opportunities of hearing on 20.1.2007, 26.2.2007, 30.5.2007, 23.7.2007, 10.9.2007, 15.10.2007, 5.11.2007 and 5.12.07 but nobody attended any personal hearing. When the case came up before me the appellants were given an opportunity of hearing on 9.1.08 but nobody appeared before me for hearing. Hence, another opportunity of hearing was given on 21.1.2008 but again nobody appeared for hearing. Because the appellant firm is not appearing for personal hearing in spite of giving them repeated opportunities of personal hearing. I am left with no other option but to decide the case ex-parte. 4. I have gone through the facts of the case available on record and it has been observed that the appellants have not submitted any paper, (like Shipping Bill, Bank Realisation Certificate, DEEC Books-Import and Export, duly lodged by the Customs Authorities) in support of exports made by them. Hence, the appellant firm’s claim that they have fulfilled their export obligation cannot be accepted because it is not supported by documentary evidence.
Hence, the appellant firm’s claim that they have fulfilled their export obligation cannot be accepted because it is not supported by documentary evidence. Accordingly, in view of the powers vested in me in terms of provision of Section 13, read with Section 15 of the Foreign Trade (D&R) Act, 1992 the following order is made : ORDER No. 11/178/2006-07/ECA. 1 FEBRUARY 11, 2008 The appeal is dismissed." 9. Admittedly, as against the import licence No. 2910003595 dated 27.9.2002, the petitioner has imported 195.501 mt. ton. of Brass-ware for Rs. 1,01,99,212/ free of custom duty. Under the terms of the import licence it was obligatory on the part of the petitioner to export 186.047 mt. ton of the Brass Artware within a period of 18 months from the date of the issue of the licence. The exemption on the’ custom duty on the import has been allowed only on such condition, otherwise the petitioner could be liable to custom duty while importing the Brass Scrap, but the record reveals that the petitioner failed to fulfil the export obligation during the statutory period. The petitioner claimed to have made 10 export shipments for 82.160 mt. ton of Brass Artware for the value of Rs. 80,64,881/- and on enquiry of such claim the documents relating to two shipments, referred herein above were found forged and it was found that no export against such shipment were made. Even in the writ petition it has not been shown that in pursuance of the export obligation exports were made. The petitioner has not filed any reply to the showcause notice. Therefore, the adjudicating authority had no option but to pass ex parte order. The appellate order also reveals that on several occasions the date of hearing were fixed but the petitioner did not appear. Issue of the visitor’s pass on 5.12.2007, in the name of Navneet, does not establish that the petitioner actually appeared on the date fixed. But, even assuming that the petitioner appeared on 5.12.2007, but it is not the case of the petitioner that on the said date they participated in the hearing and furnished the necessary details relating to export obligation. No evidence has been furnished in respect of any other date of hearing referred to in the order of the appellate authority.
But, even assuming that the petitioner appeared on 5.12.2007, but it is not the case of the petitioner that on the said date they participated in the hearing and furnished the necessary details relating to export obligation. No evidence has been furnished in respect of any other date of hearing referred to in the order of the appellate authority. Therefore, having regard to the fact that the petitioner has not discharged its export obligation, availed ,the benefit of the exemption of custom duty while importing the Brass-ware and having regard to the fact that the petitioner has furnished forged documents in respect of the two shipments, the penalty has rightly been imposed. 10. The decision of the Apex Court, cited by learned counsel for the petitioner, in the case of Hindustan Steel Ltd. (supra) is not applicable to the facts of the present case. In the result the writ petition fails and is dismissed. ————