JUDGMENT K.A. PUJ, J. Rule. Mr. P. S. Champaneri, learned Assistant Solicitor General, waives service of rule. 2. The petitioners have filed this petition under Article-226 of the Constitution of India praying for quashing and setting aside order-in-appeal dated 25/28.5.2009 passed by the Additional Director General of Foreign Trade (DGFT), New Delhi and order-in-original dated 6.5.2008 passed by the Joint DGFT, Baroda with consequential declaration and relief that no penalty was liable to be imposed on the petitioners as regards Value Based Advance License No.P/L/3499501 dated 6.1.1995. The petitioners have also prayed for direction restraining the respondents from taking any action against the petitioners including recovery of any amount as penalty, in respect of exports made under Value Based Advance License No.P/L/3499501 dated 6.1.1995. 3. This Court has issued notice on 7.10.2009. Pursuant to the notice learned Assistant Solicitor General Mr. P. S. Champaneri appeared and placed on record the affidavit-in-reply filed by the Joint DGFT. Pursuant to the order passed by this Court on 11.2.2010, letter dated 5.5.2006 issued by the Jt. DGFT on the petitioner was also produced on record. 4. It is the case of the petitioners that the petitioner Company has been dealing in textile produces, and the business of the petitioner also involved import and export of the textile goods. A Value Based Advance License was granted to the petitioner company by the office of the Joint DGFT, Baroda for allowing imports of materials valued at Rs.81,71,450/- for exporting textile goods of value of Rs.1,92,07,640/- as export obligation. The petitioners exported the specified textile products of the required quantity as stipulated in the above license but the value of exported goods was 86.64% of the goods required to be exported under the above license, and thus, the export obligation was fulfilled in terms of quantity but not in terms of value. 5. The Joint DGFT, Baroda suggested to the petitioner vide letter dated 5.5.2006 to regularize the above transaction by getting value based license converted into quantity based license and by paying the duty with interest as regards the shortfall in value of the exported goods. Since there was no regularization of the above transaction, a show cause notice proposing to impose fiscal penalty on the petitioner was issued. The Joint DGFT, Baroda passed an order-in-original imposing fiscal penalty of Rs.21,13,200/-on the petitioner company as well as the Directors. 6. Since there was no regularization of the above transaction, a show cause notice proposing to impose fiscal penalty on the petitioner was issued. The Joint DGFT, Baroda passed an order-in-original imposing fiscal penalty of Rs.21,13,200/-on the petitioner company as well as the Directors. 6. being aggrieved by the said order the petitioners filed an Appeal with a stay application before the Director General of Foreign Trade, New Delhi. During the hearing of the case before the Additional DGFT on 17.3.2009, the petitioners' advocate indicated that the petitioners were ready and willing to pay the amount of duty and interest for regularization of the license. The Additional DGFT, therefore, adjourned the hearing to 2.4.2009 so that the petitioners could make the payment in the meanwhile and come for hearing with payment particulars. 7. The petitioners' advocate, thereafter, sent a letter on 19.3.2009 to the Additional DGFT informing him that the office of the Joint DGFT, Baroda was approached immediately after the hearing for details of duty and interest, but without any direction in writing from the Additional DGFT, Baroda office was not giving any details to the petitioners. The petitioners' advocate sent a letter on 24.3.2009 to the Additional DGFT requesting him to direct in writing to the Joint DGFT, Baroda to quantify amounts of duty and interest and give information to the petitioners for depositing the same, and also to adjourn the hearing fixed on 2.4.2009. The petitioners' advocate sent another letter to the Additional DGFT on 2.4.2009 referring to the above difficulty and requesting him to adjourn the hearing and to intimate the new date for this case. There has been no response at all from the office of the Joint DGFT, Baroda to any of the above letters and also not to the personal visits and request made by the petitioners' representatives to the officers at Joint DGFT, Baroda in this regard. The Additional DGFT, New Delhi passed an order-in-appeal on 25/28.5.2009 dismissing the appeal for the reason that no intimation regarding payment of duty and interest was received from the petitioner company and hence original order was not to be interfered with. 8. It is this order which is under challenge in the present petition. 9. Mr. The Additional DGFT, New Delhi passed an order-in-appeal on 25/28.5.2009 dismissing the appeal for the reason that no intimation regarding payment of duty and interest was received from the petitioner company and hence original order was not to be interfered with. 8. It is this order which is under challenge in the present petition. 9. Mr. P. M. Dave, learned advocate appearing for the petitioners, has submitted that the petitioners have been ready and willing to pay the amount of duty saved with interest for regularizing the case but the respondent authorities have not informed the petitioners about the amounts payable for this purpose despite several requests and applications made by the petitioners in this regard and, therefore, the action of dismissing petitioners' appeal only on the ground that the required amounts were not paid by the petitioners is unreasonable and incorrect in the facts of this case. He has further submitted that the petitioners have not been in a position to arrive at the figure of duty saved and interest in this case because it has been the petitioners' submission that there has not been any saving of duty by the petitioner company as regards the imports made under the advance license and, therefore, it is incumbent upon the respondent authorities to calculate the amount of duty saved in view of their own understanding of the case and, therefore, the petitioners have not been in a position to deposit any amount on their own in the peculiar circumstances of this case. 10. Mr. Dave further submitted that even otherwise, there is no liability of whatsoever nature on the petitioners in law as regards imports and exports made qua the advance license in question because the export obligation in terms of quantity was totally fulfilled for this license and accordingly no penalty could be imposed on the importer as provided under the Exim Policy itself. He has, therefore, submitted that the action of the respondent authorities in not considering the petitioners' case on merits on one hand and rejecting the entire case only on the ground of the petitioners not having deposited the amount of duty saved with interest though no details of such amounts are ever made available to the petitioners notwithstanding the petitioners' willingness to deposit the required amounts on the other hand, is unreasonable, illegal and without jurisdiction in the facts of this case. 11. Mr. 11. Mr. Dave further submitted that the respondents have no authority in law to have imposed any fiscal penalty on the petitioners in the facts of this case because of the peculiar fact that the value addition achieved by the petitioner company for export of goods, when the value of the imported materials was compared with the value of exported goods, has been to the extent of 152.86% as against the specified requirement of achieving value addition of 135% for the advance license. Thus, there is not only positive value addition achieved by the petitioner company while exporting the goods under this advance license, but the value addition achieved has been much higher than the specification prescribed under the Exim Policy. 12. Mr. Dave lastly submitted that though the office of Jt. DGFT, Baroda had suggested to the petitioner company for getting the advance license in question to quantity based advance license so as to regularize the case, there was no such obligation on the petitioner company to go for any such regularization also in view of the provisions of para 7.28 of the Hand Book of Procedure - Volume (1) - 1997-2002 whereunder it is provided that no penalty shall be imposed if the export obligation was fulfilled in terms of quantity but there was a shortfall in terms of value when the license holder had achieved positive value addition. The penalty is provided under the Exim Policy only when there was a shortfall in terms of value addition achieved fell below a minimum prescribed requirement for a license. In the facts of this case, therefore, there was no liability of any penalty on the petitioners' part and, therefore, there was no need also to go for any regularization by converting the value based advance license in question into the quantity based advance license. He has, therefore, submitted that the impugned order be quashed and set aside and the petition be allowed accordingly. 13. Mr. P. S. Champaneri, learned Assistant Solicitor General, on the other hand, has supported the orders passed by the respondent authorities. Mr. Champaneri further submitted that the petitioner company had failed to submit export documents towards fulfillment of export obligation and hence Demand Notice was issued to them on 4.1.1996 followed by show cause notice on 17.7.1996 with opportunity of personal hearing on 6.8.1996. Mr. Champaneri further submitted that the petitioner company had failed to submit export documents towards fulfillment of export obligation and hence Demand Notice was issued to them on 4.1.1996 followed by show cause notice on 17.7.1996 with opportunity of personal hearing on 6.8.1996. Since there was no response from the petitioner company to the show cause notice dated 17.7.1996, another show cause notice was issued to the petitioner company on 24.6.1998. Vide letter dated 30.7.1998, the petitioner has submitted photo copy of export documents as an evidence of fulfillment of export obligation. The respondents have asked for the original export documents vide letter dated 30.11.1998 which were submitted on 10.9.1999. The documents were examined and deficiency letter was issued to the petitioner on 14.12.1999 which was replied on 6.2.2000. The petitioner was again issued another deficiency letter on 12.5.2000, pursuant to which the petitioner submitted documents on 30.5.2000 which were examined and deficiency letter was issued on 4.9.2000. Since the petitioner has not complied with the deficiency pointed out on 4.9.2000, show cause notice was issued on 7.1.2004 with opportunity of personal hearing on 22.1.2004 which was returned undelivered with postal remarks “left”. Show cause notice under Section-14 of Foreign Trade (Development & Regulation) Act, 1992 was issued to the Company and its Directors on 7.6.2005 with personal hearing on 16.8.2005. The petitioner company was placed under default on 4.2.2006. The respondents have directed the party to get the excess import regularized by payment of custom duty and interest vide letter dated 5.5.2006. Since there was no response from the Company firm adjudication order dated 6.5.2008 was issued to the Company and its Directors. Even in that adjudication order it was clearly mentioned about the excess imports made by the petitioners. This order was challenged by the petitioners in Appeal before the Appellate Authority and the Appellate Authority had granted opportunity of personal hearing on 16.12.2008, 27.1.2009, 17.3.2009 and 2.4.2009. The Appellate Authority has specifically observed in the Appellate Order that the petitioners were directed to pay custom duty and interest on the excess import made and they did not appear for personal hearing on 2.4.2009. Ultimately the Appeal was dismissed on 25.5.2009 on the ground that the petitioner did not comply with the directions given during the personal hearing. 14. Mr. Ultimately the Appeal was dismissed on 25.5.2009 on the ground that the petitioner did not comply with the directions given during the personal hearing. 14. Mr. Champaneri further submitted that as per records available with the respondent No.3, the petitioner had fulfilled export obligation to the tune of 86.64% and earned US $527488.30. However, the petitioner was entitled to import the raw material ‘disperse dyes’ 12% of the FOB value only but they imported more than their entitlement and hence respondent No.3 had issued a letter to the petitioners on 5.5.2006 to regularize the excess import by paying custom duty and interest in terms of Policy Circular No.28 dated 22.9.2000. Since this was not done, the penalty was imposed and the order of the adjudicating authority imposing the penalty was also confirmed by the Appellate Authority. 15. Mr. Champaneri further submitted that the advance licenses are issued with certain conditions of exports and imports which are reckoned on case to case basis. The advance license referred to in the present case is a value based one and accordingly value terms in free foreign exchange are main criteria. In the present case, the export obligation fixed was US $ 608800 whereas the petitioners fulfilled only US $ 527486.30 i.e. 86.64%. The realization of less amount in US $ cannot be attributed with the fluctuation in exchange rate of Rupees. 16. Mr. Champaneri further submitted that the advance license in question was issued to the petitioner with a specific value addition to be achieved and not with positive value addition - a concept which was envisaged in the Exim Policy after a long period after issue of the license to the petitioner. He has further submitted that para-7.28 of the Hand Book of procedures cannot be made applicable to the value based advance license issued to the petitioner on 6.1.995. He has, therefore, submitted that the contention of the petitioner that they have achieved positive value addition and no penalty could be imposed on the ground of shortfall in terms of value is not at all correct and cannot stand in the eye of law. He has, therefore, submitted that no interference of this Court is called for in the orders passed by the respondent authorities and the petition be dismissed with costs. 17. Having heard the learned advocate Mr. He has, therefore, submitted that no interference of this Court is called for in the orders passed by the respondent authorities and the petition be dismissed with costs. 17. Having heard the learned advocate Mr. Dave appearing for the petitioners and learned Assistant Solicitor General appearing for the respondent authorities and having gone through the impugned orders in light of the pleadings of the parties contained in the memo of petition as well as affidavit-in-reply, the Court is of the view that once having given an option to the petitioners to regularize the transaction in question by getting value based license converted into quantity based license and by paying the duty with interest as regards the shortfall in value of the exported goods and not giving calculation of figures for payment of custom duty and interest, despite repeated requests by the petitioner, would not make the petitioners liable for penalty. It is true that there are some lapses on the part of the petitioners. However, before the Appellate Authority a specific plea was raised by the petitioners' advocate that the petitioner was willing to pay duty alongwith interest thereon and for that purpose time was granted to produce the original receipt of payment of duty plus interest. During the period between 17.3.2009 to 2.4.2009 the petitioners wrote two letters on 19.3.2009 as well as on 24.3.2009. The petitioners have not received any reply to these letters, hence the petitioners had asked for time on 2.4.2009 and requested the Additional DGFT to direct the Joint DGFT at Vadodara to inform the petitioners about the exact amount to be paid for the purpose of regularizing the transaction. The petitioners have also reiterated in the said letter that the petitioners were ready to pay the duty and interest to regularize the transaction. Instead of acceding to the request made in this letter or adjourning the hearing, the Appellate Authority has straightway passed order on 25/28.5.2009 dismissing the Appeal of the petitioners by observing that the petitioners failed to produce the evidence of payment of duty saved plus interest. We are of the view that the order of the Appellate Authority is in violation of the principle of natural justice and contrary to law. 18. The stand of the respondent authorities is that the petitioners were informed by letter dated 5.5.2006 to get the excess import regularized by payment of duty and interest. We are of the view that the order of the Appellate Authority is in violation of the principle of natural justice and contrary to law. 18. The stand of the respondent authorities is that the petitioners were informed by letter dated 5.5.2006 to get the excess import regularized by payment of duty and interest. First of all, this letter was not produced alongwith the affidavit-in-reply and on direction by the Court to produce the said letter, the same was produced subsequently. On perusal of the said letter it is found that no figure is mentioned in the said letter. It is simply stated that the petitioner should do needful as per the Policy Circular No.28 dated 22.9.2000. This is to be viewed in light of the specific stand taken by the petitioners that the export obligations have been fully made by the petitioner company in terms of quantity thereby fulfilling the export obligation. However, in view of fluctuation in the exchange rate between the US Dollar and Indian Rupee, the CIF value of the imported inputs have gone up whereas the FOB value of the goods exported by the petitioner Company had gone down thereby resulting in an impression that the petitioner company had not fulfilled the export obligations; though the entire export obligation in terms of quantities stood fulfilled. The details of imports as well as exports in terms of quantities are duly reflected in the petitioners' DEEC Book. We are not examining this issue as to whether the stand taken by the petitioner is correct or otherwise. However, for the purpose of deciding the question of levy of penalty this would have certainly a bearing on the issue and hence while quashing the impugned orders of levy of penalty and/or confirmation thereof by the Appellate Authority we direct the respondent authorities to inform the petitioners within one month from the date of receipt of the writ of this Court or from the date of receipt of certified copy of this order, whichever is earlier, about the exact amount of custom duty with interest to be paid by the petitioners for regularization of transaction in question and on receipt of such communication by the petitioners from the respondent authorities, within one month there from the petitioners shall pay the said amount subject to their right to challenge the correctness thereof before the appropriate forum. Despite such intimation if the petitioners fail to pay such amount it is open for the respondent authorities to proceed further in accordance with law. 19. Subject to the aforesaid directions and observations this petition is accordingly allowed. Rule is made absolute without any order as to costs. (NRP) Petition allowed.