THE HON’BLE SRI JUSTICE L. NARASIMHA REDDY WRIT PETITION No. 20363 of 1999 O R D E R: The petitioner established 100% of the Export Oriented Unit, for the manufacture of polished granites. Necessary permissions were obtained from the Director General of Foreign Trade (D.G.F.T.) in this regard. On the basis of the permissions accorded by the various authorities, the petitioner imported machinery from Foreign Countries, in addition to purchasing some items indigenously. The Development Commissioner, V.E.P.Z., Visakhapatnam, the fourth respondent herein, reported to the Office of the D.G.F.T. that though machinery worth Rs.72.52 lacs was imported and certain items worth Rs.9.8 lacs were acquired indigenously, the petitioner had exported goods worth 51,000 $ only. It was alleged that the petitioner did not meet the limits of export, in terms of the value. The Additional Director General of Foreign Trade, the third respondent herein, issued a show cause notice to the petitioner on the basis of the report of the fourth respondent. The petitioner submitted its reply. It was pleaded that it had time till the year 2003 to fulfill the commitments and that an undertaking was also submitted. The third respondent was not satisfied with the reply and passed an order, dated 11.09.1998, imposing a penalty of Rs.10 lacs on the petitioner. Aggrieved thereby, the petitioner preferred an appeal before the second respondent. The appeal was rejected in limini on 12.07.1999. Hence, this writ petition. Sri V.S.Raju, the learned counsel for the petitioner, submits that the third respondent did not take into account the explanation offered by the petitioner. It is also stated that on 14.09.1998, the first respondent had extended the time for further period of five years from 29.03.1998 and in that view of the matter, there is no justification either for the third respondent to impose the penalty or for the second respondent to dismiss the appeal. He further contends that the second respondent did not examine the matter from the correct perspective and the appeal was dismissed without going into the merits at all. The learned Standing Counsel for the respondents, on the other hand, submits that the third respondent had undertaken a detailed discussion of the matter and a specific finding was recorded to the effect that the petitioner failed to fulfill the commitments. He further submits that the mere fact that the further time was given to the petitioner does not relieve it of the obligation to fulfill the commitments. The third respondent initiated proceedings against the petitioner on a report submitted by the fourth respondent. The only allegation is that the petitioner did not meet the commitments of exports within the stipulated time. The petitioner pleaded that it had time to fulfill the commitments and that an undertaking was also given. Not being satisfied with that, the third respondent imposed the penalty of Rs.10 lacs. Whatever may have been the circumstances under which the third respondent imposed the penalty, the fact remains that the first respondent extended the time by five years for the petitioner with effect from 29.03.1998. This aspect was specifically pleaded before the second respondent, but the same was not taken into account. It is not even evident that the petitioner was heard before the appeal was rejected. Hence, the writ petition is allowed and the orders passed by the third respondent on 11.09.1998 and the second respondent on 12.07.1999 are set aside. It shall be open to the third respondent to examine the matter afresh, duly taking into account the further extension granted by the first respondent in favour of the petitioner. There shall be no order as to costs. __________________ L.NARASIMHA REDDY,J Dt:17.12.2008. kdl