Delhi High Court
Duflon Polymers P.Ltd. & Ors vs The Additional Director General ... on 14 January, 2009
Author: S.Ravindra Bhat
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 6389/2008
DUFLON POLYMERS P.LTD. & ORS ..... Petitioner
Through : Mr. Syed Naqvi, Advocate
versus
THE ADDITIONAL DIRECTOR GENERAL OF FOREIGN
TRADE & ANR .... Respondent
Through : Mr. Sandeep Aggarwal, Advocate
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
1. Whether the Reporters of local papers
may be allowed to see the judgment? Yes
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be Yes
reported in the Digest?
S.RAVINDRA BHAT, J. (ORAL)
1. Issue Rule. Mr. Sandeep Aggarwal, learned counsel for the respondents
waives notice of rule. Learned counsel for the parties agree for final disposal
of this writ petition.
2. The petitioners obtained an advance license for a total CIF Value of
Rs.8,87,000/- for import of a quantity of PTFE RESIN-TEFLON with the
corresponding obligation to export finished products for a total FOB value of
Rs.12,31,854/-, on 13.10.2000. The Licensing authority, on 06.03.2004,
issued a show cause notice demanding that the first petitioner should submit
WP (C) No.6389/2008 Page 1
and provide documentary evidence, showing discharge of its export
obligation. Subsequently the petitioner, in terms of the scheme evolved
under the Foreign Trade (Development & Regulation) Act, 1992 (hereinafter
referred to as "the Act"), was declared as a defaulter and a refusal order was
made on 19.07.2005 against it. The petitioner was issued a show cause
notice on 28.12.2005 by the second respondent, under Section 13 of the Act,
asking it to disclose why action by way of imposition of fiscal penalty should
not be taken against it as well as petitioners 3 and 4. It is contended that
the first petitioner became a victim of floods which occurred in Mumbai in
July 2006 and destroyed all its assets, goods, equipments, raw material and
documents. It claims that due to this force majeure event, it could not file
the original documents and convince the authorities about fulfillment of the
export obligations. The petitioner contends that its financial reports for the
year 1996 onwards till 2005-2006 demonstrated that the exports ran into
several crores of rupees clearly indicating that it was fulfilling its obligations
in terms of the licence.
3. On 16.11.2007, the second respondent issued an order holding that
the documents furnished by the petitioners in the form of copies of shipping
bills and bank realization service, were unconvincing and the license was not
utilized for the purpose for which importation was permitted. The second
respondent also held that the license was secured on misrepresentation of
facts. Accordingly a fiscal penalty of Rs.8,87,400/- due to default in
fulfillment of export obligation and additional fiscal penalty of Rs.7,41,200/-
WP (C) No.6389/2008 Page 2
on account of export duty and interest for a period of 85 months was
imposed. The total amount payable thus was Rs.16,28,600/-.
4. It is contended that an appeal was preferred on 25.01.2008 against the
order of the second respondent with an application for condonation of delay,
under Section 15(1) which also was accompanied by an application for
waiver of pre-deposit, in terms of the third proviso to that section. By the
impugned order dated 04.03.2008, the appellate authority i.e. Additional
Director General of Foreign Trade rejected the appeal and the applications.
The appellate authority in the said order stated as follows :
"3. Aggrieved by the above mentioned Order dated
16.11.2007, M/s Duflon Polymers Pvt. Ltd. Mumbai filed an
appeal dated nil received in this office on 30.01.2008
which was delayed by 25 days and they had requested to
set aside the said Adjudication order. It is concluded that
the appeal was not filed within stipulated period of 45 days
and the appellant has also not submitted the proof of
depositing of pre-deposit of penalty amount of
Rs.16,28,600/- along with their appeal. In terms of
provisions of Section 15 of the Foreign Trade (Development
& Regulation), Act, 1992, any person aggrieved by any
decision or order can file an appeal within a period of 45
days from the date on which the decision or order is served
on such person. It is further provided in the Section
15(1)(b) that in case of an appeal against a decision or
order imposing a penalty or redemption charges, no such
appeal shall be entertained unless the amount of penalty
or redemption charges has been deposited by the
appellant. However, in this case, it has been observed that
the appellants have not filed the appeal in time and no
submitted the proof of deposit of pre-deposit of the penalty
amount along with the appeal. Appellant has not
submitted any proof of fulfillment of the export obligation
against the Advance license referred to above in terms of
Para 7.25 of Handbook. Keeping in view the facts
explained above, I do not find any merit in this appeal. The
firm is bringing frivolous information like flood in Mumbai
WP (C) No.6389/2008 Page 3
which has destroyed their office and the documents were
lost in the flood. These factors cannot be the ground for
appeal. The true fact is that the firm has failed to fulfill the
export obligation against the advance Licence mentioned
above and that the material imported therein-duty free has
been misutilized and in exercise of powers vested in me in
terms of the provisions of section 13 read with Section 15
of the Foreign Trade (Development & Regulation) Act, 1992
the following order is made::
Order
No.11/168/07-08/ECA.1/1469 Dated 04-03-2008
The appeal is dismissed for (i) delay in filing of appeal; and
(ii) non-submission of proof of depositing of pre-deposit of
penalty amount (iii) non submission of prescribed
documents in support of fulfillment of export obligation in
terms of para 7.25 of Hand Book of Procedure Vol.1.
Sd/-
(M.Balagangdharan)
Addl. Director General of Foreign Trade
5. It is contended on behalf of the petitioner that approach of the
appellate authority was needlessly technical. Counsel also contended that
although the statute has fixed a time limit for the filing of an appeal, the
authority was empowered to condone the delay if the reasons adduced were
sound and credulous. It was further contended that the appellate authority
did not furnish any reason why the application for pre-deposit was also
rejected. Mr. Naqvi, learned counsel submitted that the concerned amount
would be deposited in any event and that the Court may in these
circumstances consider and make appropriate orders directing the appellate
authority to dispose of the appeal on merits.
6. Mr. Sandeep Aggarwal, learned counsel on behalf of the respondents
WP (C) No.6389/2008 Page 4
submitted that the petitioner cannot fault the Tribunal for rejecting the
appeal particularly when the requirement of having to pre-deposit the
penalty is peremptory: having chosen to sleep over its rights, and not take
effective steps in the prosecution of its appeal the petitioner cannot now
seek equitable remedies under Article 226 of the Constitution.
7. The above discussion would show that this Court has to decide an
extremely narrow dispute, as to the correctness of the appellate authority's
order rejecting the petitioner's appeal. The extracted portion of the order
which is the rationale for the appellate authority's findings merely discloses
its opinion that the appeal had not been preferred in time and that the
petitioner had not submitted the proof of pre-deposit of penalty. The said
authority was further guided to take the view it did on the merits, in the
background of the petitioner's omission to make the pre-deposit. In view of
the statement made, this Court is of the opinion that the interests of justice
would lie in relegating the parties for re-consideration of the petitioner's
appeal subject to full pre-deposit as required in law being made by it.
8. In the circumstances, the impugned order dated 04.03.2008 of the
Additional Director General of Foreign in appeal No.11/168/07-08/ECA.1/1469
is hereby quashed. The petitioner shall deposit the total adjudicated penalty
amounts of Rs.16,28,600/- within four weeks. After verifying the same, the
appellate authority shall consider and decide the appeal on its merits, and
not on the ground of delay. The petitioner shall be granted a reasonable
opportunity of hearing before the appellate authority, after which the said
WP (C) No.6389/2008 Page 5
authority shall proceed to issue its order, in accordance with law. The entire
process shall be completed within a period of four months after the initial
period of four weeks granted to the petitioner. The writ petition is allowed in
the above terms. No costs.
S. RAVINDRA BHAT, J.
JANUARY 14, 2009
mb
WP (C) No.6389/2008 Page 6
