IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:22.07.2010 CORAM THE HONOURABLE MR. JUSTICE T.S. SIVAGNANAM W.P.No.15746 of 2006 & WPMP.No.15521 of 2006 M/s.Abiq Plastics Pvt. Ltd., No.31, Stringer Street, Chennai 600 108 Represented by its Managing Director Mrs.P. Yasmin ..Petitioner Vs 1.The Appellate Authority, Additional Director General of Foreign Trade , Room No.12, Udhyag Bhawan, New Delhi 110 011. 2.The Joint Director General of Foreign Trade, Enforcement-cum-adjudication, O/o. Zonal Director General of Foreign trade, 38 & 39 Whites Road, Royapettah,Chennai 600 014. Respondents Prayer: Writ Petition filed under Article 226 of Constitution of India praying for issuance of Writ of Mandamus directing the 1st Respondent to dispose of the main appeal pending in F.No.11/225/05- 06/FCA-1 in the file of the 1st Respondent without insisting for any bank guarantee. For Petitioner : Mr. Hari Radhakrishnan For Respondents : Mr. K. Ravichandra Babu Senior Central Government Standing counsel ORDER The prayer in the Writ Petition is for issuance of a Writ of Mandamus to direct the 1st respondent to dispose of the main appeal pending in F.No.11/225/05-06/FCA-1 on the file of the 1st Respondent without insisting upon any bank guarantee. 2. The facts which are necessary for the disposal of the Writ Petition are that the petitioner secured an order from U.A.E. for the export of 3000 numbers of school bags. Thereafter https://hcservices.ecourts.gov.in/hcservices/ the petitioner approached the 2nd respondent for issuance of an advance license for import of goods necessary for the manufacture of the export goods namely school bags. The 2nd Respondent issued a quantity based advance licence dated 25.10.1994 . As per the licence, the petitioner was permitted to import Nylon Cloth with export obligation to export the finished product. The period within which the export obligation had to be complied with was extended up to 24.10.1996 and the license was revalidated by the 2nd respondent up to 31.3.1997. The petitioner had filed the report to the 2nd respondent stating that they have complied with the export obligation and informed that the Duty Entitlement Eligibility Certificate book part I and Part II have been handed over to the clearing and forwarding agent for getting appropriate entries from the Customs Department evidencing compliance of the export obligation. 3. At that stage of the matter,the 2nd respondent issued a show cause notice on 5.11.2001 alleging that the petitioner has not fulfilled the export obligation within the stipulated time. A reply was submitted to the 2nd respondent stating that the original DEEC book and other Original document has been handed over to the Customs Department and they are yet to be returned after attestation and on receipt of such document, they would produce the same. 4. The petitioner along with their reply also furnished the copy of the shipping bill dated 22.10.1996 and the commercial invoice dated 18.10.1996, bill of lading and bank realisation certificate issued by the State Bank of India evidencing compliance of the export obligation and submitted that the original DEEC Book could not be traced as they were misplaced in the office of the customs authorities. 5.The 2nd respondent by an order dated 14.9.2005 imposed penalty equivalent to the customs duty on the imported material in addition to a personal penalty. As against such order, the petitioner preferred an appeal to the 1st respondent under Section 15 of the Foreign Trade (Regulation and Development) Act, 1992. The petitioner also filed an application to dispense with the pre-deposit which is required to be made in terms of the 2nd proviso to Section 15(1) of the Act. At that stage, the petitioner has filed the present writ petition for issuance of writ of mandamus for a direction to dispose of the appeal without insisting upon any bank guarantee. 6. When the matter is taken up today, the learned counsel for the petitioner filed an additional typed set of papers in which the interim order passed by the 1st respondent dated 8.5.2006 has been filed. As per the interim order, the petitioner was directed to pre deposit the penalty equivalent to 25% within 4 weeks failing which it was ordered that appeal will be rejected without giving any further opportunity. https://hcservices.ecourts.gov.in/hcservices/ 7. The learned counsel for the petitioner submits that the order passed by the 1st respondent is without any basis, since the 1st respondent failed to consider that even at the time of filing the appeal ,the endorsement in DEEC book have been produced before the authority which proves that the petitioner has fulfilled the export obligation . Therefore the authority ought to have waived the pre deposit in its entirety . 8. Per contra, the learned Senior Standing counsel for the Respondents would submit that the interim order passed by the 1st respondent is prior to the filing of the writ petition and even as per the interim order in the absence of deposit of 25 % of the penalty, the appeal itself stands rejected. Therefore, it is but appropriate for the petitioner to work out his remedy in the manner known to law as against the interim order dated 8.5.2006. 9. It is to be noted that this writ petition was admitted by this court on 23.5.2006 and has been pending till date. The respondents though served have not filed counter affidavits. 10. From a perusal of the grounds of appeal, as well as the application for waiver of pre deposit ,it is seen that the petitioner has specifically stated that before the 2nd respondent that they were unable to produce the proof of export obligation due to the delay by the customs authorities in endorsing the DEEC book and after repeated representations, the Deputy Commissioner of Customs, Grade-7 has made the necessary endorsement in the DEEC book on 25.10.1994 and copy of the same was produced along with the application for waiver to establish that they have fulfilled the export obligation. The plea raised by the petitioner in the waiver application though referred to by the 1st respondent in the interim order dated 8.5.2006 has not been considered. Learned Senior Standing Counsel appearing for the 1st Respondent would submit that the 1st respondent had taken note of the same and considered the said documents and had imposed the condition of pre-deposit to the extent of only 25%. In my view, the approach of the 1st respondent to the matter is wholly untenable. The case of the petitioner itself is that no duty of customs is leviable since the petitioner had complied with the export obligation within the extended period and during the currency of the advance licence and the delay in not being able to produce the proof of such export obligation was on account of the delay with the customs authorities for which the petitioner cannot be blamed. Therefore considering the facts, the 1st respondent ought to have exercised its discretion in the matter under the 3rd proviso to Section 15(1) and granted appropriate remedy in the waiver application. Thus taking note of the entire facts and circumstances of the case and also the fact that the export obligation has been satisfied by the petitioner and documents had been placed before the 1st respondent, it is a good case where this court should exercise its discretion and waive the pre deposit in its entirety and issue a direction to the 1st respondent to hear and dispose of the appeal on merits. https://hcservices.ecourts.gov.in/hcservices/ 11. In the result, the writ petition is allowed and the order passed by the 1st respondent dated 8.5.2006 is set aside and the condition for pre deposit is waived and the 1st respondent shall consider the appeal filed by the petitioner on merits and in accordance with law as expeditiously as possible. No costs. Consequently, the connected Miscellaneous Petition is closed. Sd/- Asst.Registrar /True Copy/ Sub.Asst.Registrar msr To 1. The Appellate Authority, Additional Director General of Foreign Trade , Room No.12, Udhyag Bhawan, New Delhi 110 011. 2. The Joint Director General of Foreign Trade, Enforcement-cum-adjudication, O/o. Zonal Director General of Foreign trade, 38 & 39 Whites Road, Royapettah,Chennai 600 014. + 1 cc to M/s. Hari Radhakrinshan, Advocate SR.53375 + 1 cc to M/s. K. Ravichandran Baabu, Advocate SR.53141 W.P.No15746 of 2006 KJ(CO) EU 18.08.2010 https://hcservices.ecourts.gov.in/hcservices/