Zaida Clothing vs Addl. Dir. General of Foreign Trade, New Delhi

T.S. Sivagnanam, J.—Heard Mr. B. Satish Sundar, learned counsel for the petitioner, Mr. V. Venkatesan, learned Senior Central Government Standing Counsel appearing for the respondents 1 and 3 and Mr. V. Sundareswaran, learned counsel appearing for 3rd respondent and with the consent of either side, the writ petition is taken up for final disposal.

The petitioner has filed this writ petition challenging the order passed by the first respondent namely, Additional Director General of Foreign Trade, New Delhi dated 24-6-2015. This order is an order passed exercising jurisdiction as an appellate authority over and above the order-in-original dated 6-2-2013, passed by the second respondent imposing physical penalty on the petitioner to the tune of Rs. 15 lakhs on the ground that the petitioner has failed to fulfil the conditions of licence granted by virtue of advance authorization No. 0410078753, dated 21-2-2006. Before the appellate authority, namely the first respondent, the petitioner though did not appear in person submitted a detailed written submissions stating that the entire duty amount was cleared by means of Bank Guarantee executed in favour of the Customs authorities and the petitioner had requested the Customs authorities to release the Bank Guarantee and set off the same against the duty liability so as to enable the petitioner to take advantage of the Public Notice No. 22, dated 12-8-2013 which has provided an amnesty with a cut-off date of 31-3-2014.

In fact in respect of two other advance licences issued to the petitioner, the petitioner made such a request and such request was accepted and on appeal, the appellate authority namely the first respondent has closed the proceedings by order dated 9-6-2015. However, in the instant case, the Bank Guarantee having not been encashed and the amount having not been appropriated towards the duty, the petitioner was not extended the benefit of amnesty, though the petitioner had paid the duty liability which was remaining to be paid, i.e., a sum of Rs. 2,50,000/- by Demand Draft dated 30-6-2014, well beyond the cut-off date fixed in the Public Notice No. 22, dated 12-8-2013.

The counter affidavit filed by the third respondent shows that the petitioner has sent a letter dated 28-3-2014 to the Commissioner of Customs requesting the Bank Guarantee No. 2/2006 which is available with them to be encashed and adjusted towards the balance customs duty payable, i.e., Rs. 2,18,806/-. In fact, the Bank Guarantee was to the tune of Rs. 2,60,000/-. However, this aspect of the matter appears to have not been placed before the first respondent with the appeal was heard.

Therefore, this Court is of the view that the matter should be remanded to the first respondent to consider this fact and to examine the bona fide of the petitioner to see as to whether the benefit of amnesty provided under the Public Notice No. 22, dated 12-8-2013 could be extended to the petitioner. This direction and observation is issued in the light of the fact that the petitioner had requested the customs to encash the Bank Guarantee by letter dated 28-3-2014 which is well before the cut-off date, i.e., 31-3-2014.

In the counter affidavit filed by the second respondent it has been stated that to avail the benefit of Public Notice No. 22, dated 12-8-2013, the last date for payment was 31-3-2014. There can be no quarrel to this position and in fact, the learned counsel for the third respondent also submitted that the benefit of the Public Notice cannot be extended beyond the cut-off date. This position also cannot be disputed.

Nevertheless, in the facts of the present case, the petitioner did exercise his option and made request to the customs to encash his Bank Guarantee which was given for a sum of Rs. 2,60,000/- and adjust the duty liability of Rs. 2,18,806/- and if such adjustment had been made by encashing the Bank Guarantee, the petitioner would have had the benefit of Public Notice No. 22, dated 12-8-2013. Therefore, the bona fides of the petitioner may be reconsidered by the first respondent, after inviting appropriate report from the third respondent in this regard.

In the light of the above, the writ petition is allowed and the impugned order is quashed. The matter is remanded to the first respondent to ascertain the bona fides of the petitioner in the facts set out in the preceding paragraphs, call for report from the third respondent and thereafter, proceed to decide the matter in accordance with law. Consequently, connected miscellaneous petition is closed. No costs.