IMPORTANT POINT
The court established that interest claims do not fall under the penalty provisions of the FT Act, thus cannot be adjudicated by the authority designated under the Act.

JUDGMENT :

(M.S. Karnik, J.) :

1. By this petition under Article 226 of the Constitution of India the petitioner prays for quashing and setting aside the impugned order dated 09.02.2024 and further commanding the respondents to refrain from taking any further action or proceeding against the petitioner with regard to interest on the strength of the impugned order. It is further prayed that the respondents be directed to return the original bank guarantee for an amount of Rs.1,21,69,200/- drawn on State Bank of India, Commercial Branch, Vasco da Gama Goa, to the petitioner along with all previous original bank guarantees.

2. The facts of the case in brief are thus: -

The petitioner is a Private Limited Company registered under the Companies Act, 1956. The petitioner is engaged in the business of mining, shipbuilding and allied activities. Relying upon the original Exim Policy, 1988-91 and acting upon the said policy, the petitioner entered into a contract with one NKK Corporation, Japan on 07.02.1990 for the export of processed iron ore, which was not an ineligible item in Appendix 12 under the Exim Policy, 1988-91. However, the petitioner actually exported the processed iron ore and realised NFE earnings of Rs.52,00,51,848/- between the period April, 1990 to March, 1991 during the new Exim Policy. The petitioner applied for a grant of additional licence on 23.07.1992. The same came to be rejected by the Assistant Chief Controller of Imports and Exports on the ground that there was no provision for grant of an additional licence. In an appeal preferred by the petitioner, the Joint Chief Controller of Imports and Exports remanded the matter to the Assistant Chief Con troller of Imports and Exports for a fresh adjudication.

3. The Assistant Chief Controller of Imports and Exports again rejected the said application by observing that the item "iron ore processed" exported by the Appellant during April 1990 to March 1991 is included in Appendix 12 of the Exim Policy, Book 1990-91. The Ministry of Commerce vide REP Circular No.11/93 dated 05.05.1993 introduced a scheme stating that in lieu of would be paid against the additional licence. The petitioner referring to the above Circular lodged a claim for 20% premium for Rs.1,21,69,200/- (being 20% of Rs.6,08,46,000/-) on 14.07.2023. In the meantime, the petitioner preferred an appeal challenging the order dated 30.04.1993 before the JDGFT which was rejected. Thereafter, the petitioner preferred a second appeal before the Additional Director General of Foreign Trade against the decision of the JDGFT dated 02.09.1993.

4. Since the scheme for payment of premium was going to expire on 31.12.1993 and the aforesaid appeal was not disposed of, the petitioner preferred a Writ Petition No.629 of 1993 before this Court praying for quashing of the orders of the Assistant Director and JDGFT dated 30.04.1993 and 02.09.1993 respectively and for mandamus to them to pay to the petitioner the said premium of Rs.1,21,69,200/- forthwith. By an interim order passed on 15.12.1993, this Court directed the respondents to deposit an amount of Rs.1,21,69,200/-. The Union of India preferred a Special Leave Petition bearing SLP (C) No.344 of 1994 before the Supreme Court against the interim order dated 15.12.1993. By order dated 14.01.1994, the Supreme Court set aside the order dated 15.12.1993 of this Court after recording the assurance of the Additional Solicitor General that if the petitioner would succeed in any proceeding then "the amount claimed by the petitioner under the scheme would not be denied by reason alone that the scheme bad expired on 31.12.1993".

5. During the pendency of the Writ Petition No.629 of 1993, the petitioner received the communication/order dated 05.10.1994 from the DGFT, New Delhi informing that the Additional Director General of Foreign Trade by the order has rejected the second appeal. By judgment dated 13.09.1995, this Court partly allowed Writ Petition No.629 of 1993, and quashed th