Madras High Court
M/S.Thriveni Earthmovers ... vs Joint Director General Of Foreign ... on 24 August, 2021
W.P.No.26863 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 24.08.2021
CORAM
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
W.P.No.26863 of 2016
and
W.M.P.No.23073 of 2016
M/s.Thriveni Earthmovers Private Limited,
Rep.by its General Manager (Administration)
Mr.S.P.R.Venkataachalam,
Having office at 22/110, Greenways Road,
Fairlands, Salem – 636 016. ...Petitioner
Vs
1.Joint Director General of Foreign Trade,
1544, India Life Building (Annexe), 1st Floor,
Trichy Road, Coimbatore – 641 018.
2.The Deputy Director General of Foreign Trade,
O/o, The Joint Director General of Foreign Trade,
1544, India Life Building (Annexe), 1st Floor,
Trichy Road, Coimbatore – 641 018.
3.Foreign Trade Development Officer,
O/o, the Joint Director General of Foreign Trade,
1544, India Life Building (Annexe), 1st Floor,
Trichy Road, Coimbatore – 641 018.
4.The Additional Director General
Directorate of Revenue Intelligence
Kolkata Zonal Unit, 3rd Floor,
1/32
http://www.judis.nic.in
W.P.No.26863 of 2016
Suite No.17, No.8, Ho-Chi-Minh Sarami,
Kolkata – 700 071. ...Respondents
PRAYER : Writ Petition filed Under Article 226 of the Constitution of
India, to issue a Writ of Certiorari, to call for the records pertaining to the
impugned show cause notice dated 20.07.2016 issued in
F.No.32/EPCG/Misc/AM15 by the 2nd respondent and quash the same.
For Petitioner : Mr.Vijay Narayan
Senior counsel
For M/s.Hari Radhakrishnan
For Respondents : R1 – M/s.S.Venkataswamy Babu
Senior Panel counsel
ORDER
The writ on hand is instituted, questioning the legal validity of the
show cause notice dated 20.07.2016 issued by the second respondent.
2. The petitioner is a company, engaged in the business of mining
services. In the course of their business, the petitioner had obtained 38
Export Promotion Capital Goods (EPCG) authorisations, during the period
2004 to 2010. The said EPCG licences were used to import certain capital
goods at concessional rate of duty and the petitioner had a corresponding
export obligation to mine iron ore using these capital goods and export the
http://www.judis.nic.in
W.P.No.26863 of 2016
same and thereby earn foreign exchange. The capital goods imported under
the above EPCG authorisations were installed in the addresses mentioned
and declared to the licencing authority viz., the Joint Directorate General of
Foreign Trade, Coimbatore.
3. The petitioner had obtained the redemption certificate in respect of
all the 38 licenses, which were issued from the office of the 1 st respondent.
In respect of 18 out of 38 licences, the petitioner admittedly could not fulfill
the export obligation and therefore, the differential duty was paid along with
the applicable interest. On payment of the differential duty along with the
interest, the office of the 1st respondent had discharged the petitioner
company from the export obligation imposed on the petitioner in respect of
the said 18 licences.
4. The learned Senior counsel appearing on behalf of the writ
petitioner mainly contended that the Show Cause Notice impugned lacks
jurisdiction as the very initiation is beyond the period of limitation as
contemplated under Section 16 of the Foreign Trade (Development and
http://www.judis.nic.in
W.P.No.26863 of 2016
Regulation) Act, 1992 [hereinafter referred to as the 'Act'].
5. Though the impugned show cause notice has been issued by stating
that it was issued under Section 14 of the Act, factually it cannot be issued
under Section 14 of the Act. For all purposes, it is to be construed that the
show cause notice was issued under Section 16 of the Act as the Certificate
of discharge issued by the competent authority became final and against
such certificate, only review would lie and a show cause notice cannot be
issued, which is otherwise contemplated as the procedures to be followed in
certain circumstances.
6. The learned Senior counsel for the petitioner is of an opinion that
the Redemption certificate issued in respect of all the 38 licenses cannot be
reopened by issuing a show cause notice under the guise of Section 14 of the
Act. If at all any further initiation is required, it must be under Section 16 by
way of review by the competent authority and by complying with the period
of limitation as contemplated under Section 16 of the Act. The period
prescribed is two years and in the present case, the impugned show cause
http://www.judis.nic.in
W.P.No.26863 of 2016
notice admittedly was issued beyond the period of two years and therefore,
the impugned show cause notice is lacking jurisdiction and thus, to be set
aside.
7. The learned Senior counsel for the petitioner in support of the said
contention, relied on the judgment of the High Court of Gujarat in the case
of Alstom India Limited Vs. Union of India reported in 2014 (301) E.L.T.
446 (Gujarat). Relying on the said judgment, the High Court of Madras also
passed an order on 02.09.2020 in W.P.Nos.21689 to 21696 of 2016,
wherein the learned Single Judge of the High Court of Madras relied on the
judgment of the High Court of Gujarat cited supra and relied on the
judgments of M/s.Simplex Infrastructures Limited Vs. Union of India &
others in W.P.(c).No.4455 of 2013, decided by the Delhi High Court and
allowed the writ petition on the ground that the order issued beyond the
period of two years under Section 16 was without jurisdiction.
http://www.judis.nic.in
W.P.No.26863 of 2016
8. The relevant paragraphs of the judgment dated 02.09.2020 in
W.P.Nos.21689 to 21696 of 2016 are extracted hereunder:
“4. Secondly, he submitted that the impugned notices
have been issued after about 10 years from the issuance of the
EOD Certificate which is contrary to the limitation prescribed
under the proviso to Section 16 of the Act, which prescribes a
period of two years for such a power to review.
7. As rightly pointed out by the learned counsel for the
petitioner, Section 16 of the FTDR Act empowers the Director
General to review any decision or order made by the Joint
Director of Foreign Trade. The power of review of any
decision or order is only under Section 16.
8. As and when the second respondent had issued the
EPCG licence and the Export Obligation Discharge
Certificate, he becomes “functus officio” and if at all, such an
order of the second respondent is to be reviewed, the same
can be done only by the Director General, as provided under
Section 16. Apparently, the impugned notice issued by the
second respondent itself is without any jurisdiction and
contrary to the statutory provisions.
9. The learned counsel for the petitioner relied upon the
decision of the Gujarat High Court in the case of Alstom India
Ltd., Vs. Union of India reported in 2014 (301) E.L.T. 446
http://www.judis.nic.in
W.P.No.26863 of 2016
(Guj.) on this proposition. The relevant portion of the order
reads as follows:-
“31. On going through the provisions of the FTDR
Act, we find that those do not grant power to the Respondent
No.2 or its subordinates to redetermine or re-verify the
deemed export benefits if such benefits have been approved
or granted as per the provisions of the FTDR Act except by
way of review as provided in Section 16. In the absence of
any power under FDR Act, the Respondent No.2 or its
subordinates cannot assume quasi-judicial power for
instance, the power to re-determine or re-verify under the
administrative guidelines i.e. Para 7 of the ANF-8 Form.
Therefore, by virtue of Para 7 of the ANF8, the Respondent
No.2 is deriving the quasijudicial power which is beyond the
provisions of FTDR Act. We have already pointed out that
according to Section 6 of the FTDR Act, the Respondent
No.2 or the officer subordinate to him cannot usurp the
power under Sections 3, 5, 15 and 19 of the FtDR Act.
According to Section 3, it is for the Central Government
which may, by Order published in the Official Gazette, make
provision for the development and regulation of foreign
trade by facilitating imports and increasing exports.
...
32.1 Section 16. on the other hand, authorizes the
Central Government, in the case of any decision or order
made by the Director General, or the Director General in
the case of any decision or order made by any officer
subordinate W.P.(C)4455/2013 Page 7 to him, to act on its
http://www.judis.nic.in
W.P.No.26863 of 2016
own motion or otherwise, by calling for and examining the
records of any proceeding for the purpose of satisfying itself
or himself, as the case may be, as to the correctness, legality
or propriety of such decision or order and make such orders
thereon as may be deemed fit. The proviso. however, says
that no decision or order shall be varied under section 16 so
as to prejudicially affect any person unless such person has,
within a period of two years from the date of such decision
or order, received a notice to show cause why such decision
or order shall not be varied and has been given a
reasonable opportunity of making representation, and, if he
so desires, of being heard in defence.
...
33.We, thus, find that although specifically
prohibited under Section 6 of the Act, the DGFT has been
illegally vested with the power to intervene in the subject
matters coming within the purview of Sections 3, 5, 15, 16
and 19 in clear violation of sub section(3) of Section 6 of the
FTDR Act. In other words, what is specifically prohibited by
the FTDR Act, by taking aid of the HOP, the D.G.F.T has
assumed such power in colourable exercise of the power
conferred upon it.
10. Following the aforesaid decision in Alstom India
Limited, a Division Bench of the Delhi High Court in Simplex
Infrastructure Ltd., Vs. Union of India & others in WP.(c)
No.4455 of 2013 had held that Joint DGFT has no powers to
http://www.judis.nic.in
W.P.No.26863 of 2016
review his own orders in view of Section 16 of the FTDR Act.
The relevant portion of the order reads as follows:-
“4. ... Further, it is argued that the power to review an
order under the policy is granted to the DGFT under
Section 16 of the Act, which in this case was
impermissibly exercised by the Deputy DGFT. .. .. 8. In
this case, the impugned order-inoriginal, which acted
upon the decision taken by the PIC, is of the Joint
DGFT, dated 30 th March, 2012. Clearly, in terms of
the decision in Alstom (supra), with which this Court
concurs, there can be no review of an earlier refund
except in accordance with the provision of Section 16
of the FTDR Act, which only permits the DGFT or the
Central Government (in case the original order was by
the DGFT) to exercise the power of review.”
14. For all the foregoing reasons, the impugned notices
dated 26.02.2016 passed by the second respondent herein are
hereby quashed. Consequently, connected Miscellaneous
Petition is closed. The Writ Petitions stand allowed. No costs.”
9. Relying on the said judgment, the learned Senior counsel contended
that the facts in the present writ petition are almost similar and therefore, the
impugned show cause notices are to be declared as void, in view of the fact
that the said notices are issued, beyond the period of limitation, more so,
http://www.judis.nic.in
W.P.No.26863 of 2016
under an inapplicable provision.
10. It is further contended that the show cause notice has been issued
by an authority, who is subordinate to an officer, who issued the redemption
certificate. Therefore, the subordinate authority has no authority to review
the order passed by the higher authority and even on that ground also, the
writ petition is to be allowed.
11. The learned Senior Panel counsel objected the contentions raised
on behalf of the writ petitioner and drew the attention of this Court with
reference to the provisions of the Act. Before that, the learned Senior counsel
contended that the impugned show cause notice was issued, under Section
14 for action under Section 10 & 11 (2) of the Act and Section 14D of
Foreign Trade (Development & Regulation) Amendment Act, 2010 for
cancellation of EODCs regarding. The show cause notice was issued based
on the report submitted by the Directorate of the Revenue Intelligence to the
respondents and therefore, it is a new cause of action for the purpose of
issuing show cause notice and it is unconnected with the redemption
http://www.judis.nic.in
W.P.No.26863 of 2016
certificate already issued based on certain documents filed by the Petitioner.
In view of the fact that the show cause notice is the original action initiated
pursuant to the report submitted by the Directorate of Revenue intelligence,
the same cannot be compared with the review provision for review under
Section 16 of the Act.
12. The learned Senior Panel counsel referred Section 11 of the Act,
which stipulates “Contravention of provisions of this Act, rules, orders
and foreign trade policy”. Sub-section (2) and Sub-section (3) to Section
11 of the Act reads as under:
“(2) Where any person makes or abets or attempts to
make any export or import in contravention of any provision of
this Act or any rules or orders made thereunder or the foreign
trade policy, he shall be liable to a penalty of not less than ten
thousand rupees and not more than five times the value of the
goods or services or technology in respect of which any
contravention is made or attempted to be made, whichever is
more.
(3) Where any person signs or uses, or causes to be
made, signed or used, any declaration, statement or document
http://www.judis.nic.in
W.P.No.26863 of 2016
submitted to the Director General or any officer authorized by
him under this Act, knowing or having reason to believe that
such declaration, statement or document is forged or tampered
with or false in any material particular, he shall be liable to a
penalty of not less than ten thousand rupees or more than five
times the value of the goods or services or technology in
respect of which such declaration, statement or document had
been submitted, whichever is more.”
13. Section 14 of the Act denotes Giving of opportunity to the owner
of the goods, etc., and reads as under:
“No order imposing a penalty or of adjudication of
confiscation shall be made unless the owner of the goods or
conveyance, or other person concerned, has been given a
notice in writing -
(a) informing him of the grounds on which it is proposed
to impose a penalty or to confiscate such goods or conveyance;
and
(b) to make a representation in writing within such
reasonable time as may be specified in the notice against the
imposition of penalty or confiscation mentioned therein, and, if
he so desires, of being heard in the matter.”
http://www.judis.nic.in
W.P.No.26863 of 2016
14. Section 16 contemplates “Review”, which reads as under:
“The Central Government, in the case of any decision or
order, made by the Director General, or the Director General
in the case of any decision or order made by any officer
subordinate to him, may on its or his own motion or otherwise,
call for and examine the records of any proceeding, for the
purpose of satisfying itself or himself, as the case may be, as to
the correctness, legality or propriety of such decision or order
and make such orders thereon as may be deemed fit:
Provided that no decision or order shall be varied
under this section so as to prejudicially affect any person
unless such person -
(a) has, within a period of two years from the date of
such decision or order, received a notice to show cause
why such decision or order shall not be varied, and
(b) has been given a reasonable opportunity of making
representation and, if he so desires, of being heard in
his defence.”
15. Relying on Sub Section 3 to Section 11 of the Act, the learned
Senior panel counsel reiterated that “ Where any person signs or uses, or
causes to be made, signed or used, any declaration, statement or
http://www.judis.nic.in
W.P.No.26863 of 2016
document submitted to the Director General or any officer authorized by
him under this Act, knowing or having reason to believe that such
declaration, statement or document is forged or tampered with or false in
any material particular, he shall be liable to a penalty”
16. Therefore, the question of traceability of such forged or tampered
with or false document would arise only if any contra materials are made
available to the Department. In the present case, the Director of Revenue
Intelligence submitted a report that fraudulent activities were identified and
further, directed to initiate action for cancellation of redemption certificate
already issued. Thus, the cause of action arose for initiation of action based
on the Intelligence report, which states that certain forged and fraudulent
activities were carried out and by the petitioner. The original redemption
certificate was issued based on the documents furnished by the petitioners in
a usual manner and there was no adjudication as such in respect of these
aspects at the time of issuing redemption certificate at the first instance.
When routine procedures are followed in issuing certain certificate based on
the informations and details furnished by the person concerned and
http://www.judis.nic.in
W.P.No.26863 of 2016
subsequently, the authorities came to understand that such certificate or
document are forged or fabricated one, then the Act contemplates action is
to be initiated and in such circumstances, a show cause notice under Section
14 is to be issued in order to comply with the principles of natural justice
and to provide opportunity, enabling the person to defend their case in the
manner known to law.
17. The learned Senior Panel counsel contended that the power of
Review contemplated under Section 16 is general in nature. The Central
Government, in the case of any decision or order, made by the Director
General, or the Director General in the case of any decision or order made
by any officer subordinate to him, may on its or his own motion or
otherwise, call for and examine the records of any proceeding, for the
purpose of satisfying itself or himself, as the case may be, as to the
correctness, legality or propriety of such decision or order. Therefore,
application of Section 16 would be made available in certain circumstances,
where an order is passed after adjudication or on merits as the case may be
and in the present case, the redemption certificate is issued based on the
http://www.judis.nic.in
W.P.No.26863 of 2016
informations provided by the petitioners. Thus, such redemption certificate
and the subsequent actions cannot be compared and suspension or
cancellation of license is contemplated under Section 14-D of the Act. For
the purpose of such cancellation, a notice under Section 14 is mandatory and
therefore, the actions initiated are independent and unconnected with the
redemption certificate issued. The issues may be interconnected, but cause
of action is entirely independent and fresh, based on the report of the
Director of the Revenue Intelligence.
18. The learned Senior Panel counsel has further stated that the report
of the Revenue Intelligence provides materials for initiation of action and
such materials are vital for the purpose of continuing the action and the writ
petition is filed, challenging the show cause notice and therefore, the writ
petition itself is not maintainable and the petitioner has to defend its case by
submitting their objections/defense by availing the opportunities provided
under the provisions of the Act.
http://www.judis.nic.in
W.P.No.26863 of 2016
19. Considering the arguments as advanced by the learned Senior
counsel appearing on behalf of the petitioner and the learned Senior Panel
counsel appearing on behalf of the respondents, the question of importance
arose, whether an action initiated for cancellation of certificate based on the
Intelligence report is to be construed as an order, which is to be reviewed
under Section 16 or to be taken as a fresh cause of action for the purpose of
initiation of further proceedings by issuing a show cause notice under
Section 14 of the Act.
20. The arguments as advanced by the learned Senior counsel for the
petitioner that the redemption certificate is a proceedings issued by the third
respondent in the present case and for cancellation of such redemption
certificate, the power of review under 16 alone is exercisable and show cause
notice under Section 14 would not lie.
21. In reply, the learned Senior Panel counsel said that it was not an
order passed after adjudication and redemption certificate was issued based
on the informations furnished by the petitioner and such certificate cannot
http://www.judis.nic.in
W.P.No.26863 of 2016
be construed as an adjudicated order for all purposes in order to exercise the
power of review under Section 16 of the Act.
22. The scheme of the Act provides Power relating to Search and
Seizure under Section 10 of the Act. The Central Government shall authorize
any person to enter into the premises, where the goods are kept, stored or
processed, manufactured, traded or supplied or received for the purpose of
import or export and searching, inspecting and seizing of such goods,
documents, things and conveyances connected with such import and export
of goods. In the event of any such Search and Seizure, then if the report is
filed, then Section 11 stipulates Contravention of provisions of this Act,
rules, orders and foreign trade policy. Sub-Section (2) states that “Where
any person makes or abets or attempts to make any export or import in
contravention of any provision of this Act or any rules or orders made
thereunder or the foreign trade policy, he shall be liable to a penalty as
stated subsequently.” Sub-Section 3 to Section 11 unambiguously stipulates
that “Where any person signs or uses, or causes to be made, signed or
used, any declaration, statement or document submitted to the Director
http://www.judis.nic.in
W.P.No.26863 of 2016
General or any officer authorized by him under this Act, knowing or
having reason to believe that such declaration, statement or document is
forged or tampered with or false in any material particular, he shall be
liable to a penalty.”
23. Sub Section 3 to Section 11 would be coming into operation only
if any person submits a document, statement to the Director General or any
officer authorized by him and such documents are subsequently found
forged or tampered with or false in any material particular. Therefore, the
circumstances of invoking the provisions for issuance of show cause notice
would arise only if any person submits a document or statement etc., as
contemplated under sub-section (3) to Section 11 and such documents are
found to be false, forged or fraudulent.
24. If any such declaration statement or document is submitted to the
Director General or any officer is identified as forged, tampered with or
false, then Section 14 would come into operation, where the authority is
bound to provide an opportunity to such person to defend his case for the
http://www.judis.nic.in
W.P.No.26863 of 2016
compliance of the principles of natural justice. Thereafter, Section 14-D
contemplates suspension or cancellation of a license. Therefore, the
suspension or cancellation of a license is relatable to the redemption
certificate. Section 14-D contemplates that “the Director General or an
officer authorised by him may, by order, suspend or cancel a licence to
import or export of specified goods or services or technology without
giving the holder of the licence a reasonable opportunity of being heard
but such person shall be given a reasonable opportunity of being heard
within six months of such order and thereupon the Director General or the
officer so authorised may, if necessary, by order in writing, confirm,
modify or revoke such order.” After Section 14-D of the Act, Section 16
would come into picture. Section 16 contemplates Review and therefore,
such Review is exercisable in respect of an order passed, suspending or
cancelling the license and before passing any such suspension or
cancellation of license, Section 14, Giving of an opportunity became
mandatory.
25. Close reading of the scheme of the Act would reveal that the
http://www.judis.nic.in
W.P.No.26863 of 2016
Power of review is exercisable if an order of suspension or cancellation of
license is passed by following the procedures as contemplated under the
other sections as discussed in the aforementioned paragraphs.
26. In the present case, the redemption certificate issued by the third
respondent states that based on the statement of exports made by the
petitioner, the certificate was issued. The competent authority issued a
certificate, stating that export obligation has been fulfilled and such a
certificate issued cannot be considered as an order passed after adjudication
of issues. Redemption certificate is issued and subsequently, the Director of
Revenue intelligence gathered information, stating that the petitioner had
submitted false and forged document for the purpose of getting the
redemption certificate. The relevant portion of the report dated 08.06.2016
submitted by the Directorate of Revenue Intelligence reads as under:
“5. From the copes of form ANF5B, some of which were
submitted by Thriveni Earth Movers Pvt Ltd., and some
received from Assistant Director General of Foreign Trade,
Coimbatore, it is found that export obligation was claimed to
have been fulfilled against export made by one J J S Ahluwalia.
K J S Ahluwalia is a separate firm who had taken iron ore
http://www.judis.nic.in
W.P.No.26863 of 2016
mines on lease from Odisha government. Thus, it can be seen
that Thriveni Earth Movers Ltd., is not the owner of the iron
ores exported by K J S Ahluwalia and as such the export made
by K J S Ahluwalia cannot be termed as third party export. In
fact Thriveni Earch Movers admitted that neither they were
owner of the iron ores exported by K J S Ahluwalia nor the
exported iron ores were mined by them. Further, K J S
Ahluwalia is a totally separate business entity and Thriveni
Earth Movers Pvt Ltd failed to submit any documents in course
of investigation to prove that K J S Ahluwalia is one of their
group companies.
6. From foregoing it can be seen that Thriveni Earth
Movers Pvt Ltd procured EPCG licenses misdeclaring their
status as manufacturer – exporter. The imported machines were
installed in the mines, not at their factory premises. Installation
certificates were obtained from Chartered Engineer which is
not permissible in case of manufactures. For fulfillment of
export obligation they showed export of iron ore made by
another concern. The exported iron ore was not owned by them
nor mined by them. It thus appears that they have obtained the
EODC fraudulently from DGFT by mis-declaring material facts
and the same needs to be cancelled.
7. It is therefore requested to take necessary action
accordingly and cancel the said EODCs. DRI, Kolkata may be
http://www.judis.nic.in
W.P.No.26863 of 2016
intimated regarding action taken at your end so that show
cause notice under Customs Act can be issued against Thriveni
Earth Movers Pvt Ltd., for Customs duty evasion of estimated
Rs.7.64 Crores.”
27. Once the Intelligence wing submitted a report, based on the
materials gathered that the petitioner had submitted some false statement or
forged documents and obtained certificate, then it is necessary to provide an
opportunity to the person, enabling him to defend his case. If at all, the
report of the Directorate of Intelligence is incorrect on facts or otherwise, the
petitioner is bound to defend his case by producing the documents and
evidences to establish his innocence or otherwise.
28. Presuming that if the provisions of the Act is interpreted as if the
unadjudicated redemption certificate issued based on the informations
furnished by the petitioner is accepted as final, then there no possibility of
unearthing such fraudulent or false certificate, if any produced by any such
person during the course of importing or exporting. Thus, the purpose of the
Act is to be interpreted constructively and more so, a purposive
http://www.judis.nic.in
W.P.No.26863 of 2016
interpretation is to be adopted in a pragmatic manner, so as to ensure that
the circumstances as contemplated are dealt with in a manner for the
purpose of achieving the legislative intention. It may appears to be that
Section 16 would be relevant in such circumstances, where a certificate is
issued. However, the legislative intention and the other provisions
contemplated are more relevant for the purpose of forming an opinion that
where an Intelligence Report is submitted, then the Scheme of the Act in
entirety is to be interpreted, so as to ensure that such circumstances are also
dealt with by following the procedures.
29. As far as the judgment of the High Court of Madras, it is not
discussed, whether the notice was issued under Section 14 or under Section
16 of the Act. The case was proceeded on the basis that power under Section
16 for review is to be exercised within a period of 2 years as contemplated. It
is not in dispute that in case of review, the period of limitation as
contemplated is to be adhered to scrupulously. However, whether the case is
falling under Section 16 or not, requires an adjudication based on the facts
and circumstances and therefore, the judgment relied on dated 02.09.2020
http://www.judis.nic.in
W.P.No.26863 of 2016
in W.P.Nos.21689 to 21696 of 2016 cannot be applied with reference to the
facts and circumstances of the present case.
30. Even in case, certain similarities are available, in the present case,
the respondents could able to furnish the copy of the communication of
Director of Revenue Intelligence to the respondents dated 08.06.2016 and
perusal of the findings would reveal that certain serious irregularities,
illegalities were committed and therefore, action under the provisions of the
Act is certainly imminent. If the mining operations, exports, imports are
done in a particular manner and the redemption certificates are allowed to
remain merely based on the statement given by the licencee, then the
consequences would be disastrous and therefore, this Court is of the
considered opinion that the power of review under Section 16 is exercisable
only if any order of suspension or cancellation is made under Section 14-D
of the Act. The mining operations are done in the State of Orissa. The
redemption certificates were issued by the authority at Coimbatore. The
Revenue Intelligence from Kolkatta, State of West Bengal traced out the
http://www.judis.nic.in
W.P.No.26863 of 2016
illegalities and irregularities in mining exports and imports. Therefore, the
authority at Coimbatore issued the certificate merely based on the
information provided by the petitioner and the said certificate therefore,
cannot be construed as final for the purpose of initiating action under
Section 14 of the Act.
31. The impugned show cause notice issued by the respondent on
20.07.2016 categorically states that “Show Cause Notice under Section 14
for action under Section 10 & 11(2) of FT (D&R) Act, 1992 and Section
14D of Foreign Trade (Development and Regulation) Amendment Act, 2010
for cancellation of EODCs”. Thus, the intention as well as the purpose for
which such show cause notice was issued have been categorically stated in
the show cause notice itself. The respondents have initiated action by issuing
a show cause notice under Section 14 of the Act for the purpose of
continuing action for cancellation of EODCs by exercising the powers under
14-D of the Act and for that purpose, the opportunity is provided to the
petitioner. When the respondent could able to establish that there is a fresh
cause of action after issuing the redemption certificate arose due to the
http://www.judis.nic.in
W.P.No.26863 of 2016
report of the Director of Revenue Intelligence, and such report is the cause
for issuing a show cause notice under Section 14 for the purpose of initiating
action under Section10 & 11 (2) of FT (D&R) Act, 1992, thereafter, if
necessary, an order under Section 14-D is to be passed, then Section 16
Review would apply only if any such final orders are passed under Section
14-D of the Act and not otherwise.
32. In respect of the contention that Subordinate officer issued the
show cause notice, this Court is of the considered opinion that the provisions
would reveal that the actions are initiated for submitting false and forged
documents and therefore, show cause notice is to be issued by the original
authority and if a final order is passed under Section 14-D of the Act,
thereafter, the power of Review under Section 16 is exercisable.
33. This being the scope of the provisions of the Act, the contentions
raised that the redemption certificate is final order, which can be reviewed
under Section 16 of the Act is untenable and the redemption certificates
issued based on the informations furnished by the petitioner, can never be
http://www.judis.nic.in
W.P.No.26863 of 2016
construed as an order issued after adjudication for the purpose of exercise of
power of review and therefore, the impugned show cause notice is issued,
based on the report submitted by the Director of Revenue Intelligence, which
is a fresh cause of action and more so, in respect of the documents furnished
by the petitioner for the purpose of getting a redemption certificate and thus,
such illegality or irregularity if any noticed, is to be proceeded with by
following the procedures as contemplated under law.
34. The petitioners are at liberty to avail the opportunities by
defending their case in the manner known to law and prove their innocence
or otherwise before the authorities competent by responding to the show
cause notice.
35. In view of the fact that the petitioner has not established the
jurisdictional point as raised, the petitioner is at liberty to defend their case
by submitting objections / defense statements by availing the opportunities
to be provided. The time granted in the impugned show cause notice is
extended and accordingly, the petitioner is at liberty to submit their
http://www.judis.nic.in
W.P.No.26863 of 2016
explanation / defense statements and the documents and evidences, if any, to
the respondents within a period of four weeks from the date of receipt of a
copy of this order and on receipt of any such objections / defense statements
etc., if any received from the petitioners, the respondents shall proceed
further by following the procedures as contemplated under the Act.
36. With these observations, the writ petition stands dismissed. No
costs. Consequently, connected miscellaneous petition is closed.
24.08.2021
Speaking order/Non-speaking order
Internet: Yes/No
Index : Yes/No
Kak
To
1.Joint Director General of Foreign Trade,
1544, India Life Building (Annexe), 1st Floor,
Trichy Road, Coimbatore – 641 018.
2.The Deputy Director General of Foreign Trade,
O/o, The Joint Director General of Foreign Trade,
1544, India Life Building (Annexe), 1st Floor,
http://www.judis.nic.in
W.P.No.26863 of 2016
Trichy Road, Coimbatore – 641 018.
3.Foreign Trade Development Officer,
O/o, the Joint Director General of Foreign Trade,
1544, India Life Building (Annexe), 1st Floor,
Trichy Road, Coimbatore – 641 018.
4.The Additional Director General
Directorate of Revenue Intelligence
Kolkata Zonal Unit, 3rd Floor,
Suite No.17, No.8, Ho-Chi-Minh Sarami,
Kolkata – 700 071.
http://www.judis.nic.in
W.P.No.26863 of 2016
S.M.SUBRAMANIAM, J.
Kak
W.P.No.26863 of 2016
http://www.judis.nic.in
W.P.No.26863 of 2016
24.08.2021
http://www.judis.nic.in
