COMMON ORDER: (Ramesh Ranganathan, J.) W.P. No.18256 of 2008 is filed seeking a direction to quash the show cause notice, issued by the respondent on 02.02.2007, as without jurisdiction. The petitioner seeks a further direction for refund, with interest, of Rs.1,73,76,124/- and return of all the documents seized by the respondent as stated in the panchanama. W.P. No.20446 of 2008 is filed seeking a direction to quash the show cause notice, issued by the respondent on 07.02.2007, as without jurisdiction. The petitioner seeks a further direction for refund, with interest, of Rs.25,40,591/- and return of all the documents seized by the respondent as referred to in the panchanama dated 27.10.2005. As the questions raised, in challenge to the impugned orders, are common in both the writ petitions they were heard together and are now being disposed of by this common order.

2. Both Sri K.V. Satyanarayana, learned Counsel for the petitioner and Sri A. Rajasekhar Reddy, learned Assistant Solicitor General would submit that the facts in W.P. No.18256 of 2008 are representative of both the writ petitions and it would suffice for their disposal to note, in brief, the facts stated therein.

3. The petitioner in W.P. No.18256 of 2008 is engaged in the manufacture of pharmaceutical products. They claim to have exported the medicines manufactured by them to various countries, more particularly to African nations, under the incentive scheme, i.e., Duty Entitlement Pass Book (DEPB scheme), extended by the Director General of Foreign Trade (DGFT) exercising powers under the Foreign Trade (Development & Regulation) Act, 1992 (Act 22 of 1992).

4. On the warrants issued by the second respondent, the office premises of the petitioner company, its Managing Director and others were searched on 27.10.2005 and certain documents were seized. On completion of investigation and, on the basis of the statements recorded, the impugned show cause notice dated 02.02.2007 was issued by the 1st respondent. It is stated therein that specific intelligence, gathered by the officers of Directorate of Revenue Intelligence, Regional Unit, Hyderabad, indicated that the FOB value, of the goods exported by the petitioner, were highly inflated to avail DEPB (Duty Entitlement Pass Book) benefits in a fraudulent manner and that they were bringing overseas remittances, through illicit channels, into their bank accounts in the guise of export proceeds. By the impugned proceedings the petitioner company, its Managing Director and others were, jointly and severally, called upon to show cause as to why:-

1. The consignments exported through Chennai Port, with a FOB value of Rs.111,88,77,595, should not be held liable for confiscation under Section 113(i) of the Customs Act, 1962;

2. The FOB value of Rs.111,88,77,595/- declared in the shipping bills should not be rejected and the DEPB credit availed by them for Rs.11,27,74,483/- should not be denied;

3. DEPB credit amounting to Rs.11,27,74,483/-, already availed by M/s VPL, should not be recovered under Section 28(1) of the Customs Act, 1962 along with interest under Section 28 AB;

4. Penalty under Section 114-A of the Customs Act, 1962 should not be imposed on M/s VPL;

5. Penalty under Section 114(iii) of the Customs Act, 1962 should not be imposed on the Managing Director of M/s VPL and others; and

6. The amount of Rs.1,00,00,000/- paid by M/s VPL voluntarily should not be appropriated towards the DEPB credit availed by them fraudulently.

They were also asked to show cause why :-

(1) The foreign currency equivalent of Rs.97,89,61,683/- remitted into the account of M/s VPL, and already withdrawn, should not be held liable for confiscation under Section 111 (d) read with Section 120 of Customs Act, 1962; and

(2) Penalty under Section 112(a) of the Customs Act, 1962 should not be imposed on each of them.

5. In respect of exports made through Air Cargo Complex, Hyderabad, the petitioner company, its Managing Direc