Sanjay Kishan Kaul, J.

( 1 ) THE petitioner company was engaged in the export of readymade garments and was using mulberry raw silk yarn as a raw material for fabricating the garment for export. The petitioner company carried on the activities from Phagwara (Punjab ).

( 2 ) IT is stated that the petitioner company was not in the organised sector and used various intermediaries for carrying out the work like twisting, weaving, etc of the raw material for which facilities are stated not to be available at Phagwara.

( 3 ) THE petitioner company applied for an advance licence and was issued the same on 7. 5. 1987, which entitles the petitioner to import 6850 kg. of mulberry raw silk yarn of the amount of Rs. 17,46,758/- with an export obligation of Rs. 53,81,675/ -. The licence was revised entitling import to the value ot Rs. 20,74,275/- with the corresponding export obligation of Rs. 66,55,025/ -. The petitioner company executed a bond backed by bank guarantee for the requisite amounts.

( 4 ) IT was fvrther stated that an exporter like the petitioner company was also entitled to procure the raw material indigenously and make exports, but only with prior permission of the licensing authority and in such a case, raw material could be sold in the market. The petitioner company was stated to have complied with the export obligations of a higher value than prescribed and the same was done by 22. 7. 1989.

( 5 ) THE dispute relates to a part of the consignment imported by the petitioner company weighing 3536. 52 kg. of the value of Rs. 8,37,281/-contained in 60 bales and cleared at the port of Bombay against the bill of entry dated 24. 8. 1987. The duty involvement in case of such import is stated to be to the tune of Rs. 5,86,808/ -. These goods were to proceed to Phagwara but were, however, sent via Bangalore. It was stated that a few of the bales were given for twisting, weaving, etc. Some complaints are stated to have been made and the DRI authority in a raid seized 51 bales. Thirty of the bales were with the transporter and 17 bales were with third-parties, while 4 bales are stated to be seized from the office of the petitioner company at Bangalore. The explanation given by the petitioner company is that these 17 bales were lying for the purpose of twisting and weaving.

( 6 ) THE petitioner company was issued a show-cause notice dated 17. 4. 1989 under Section 4l for action under Section 4-I of the Imports and Exports (Control) Act, 1947 (hereinafter to be referred to as, the said Act ) and Clause 10 for action under Clause 8 of the Imports (Control) Order, 1955 ( hereinafter to be referred to as, the said Order ) as amended. The said show-cause notice set out the relevant conditions on which the advance licence was issued and the same are as under:

" (I) the firm would export pure silk sarees, fabrics, dupattas made up of 100% mulberry raw silk weighing 5070 kg. for an f. o. b. value of Rs. 53,81,675/- within a period of 9 months from the date of clearance of first consignment or from 30 days after the date of import of the first consignment, whichever was earlier;

(II) to ensure fulfilment of export obligation they, before clearance of the first consignment, would execute bond/legal agreement;

(III) the goods imported against this advance licence would be utilised in accordance with the provisions of Customs Notification No. 44-Customs dated 19. 2. 87;

(IV) in the event of their failure to fulfil the export obligation within the prescribed time-limit, the bond/legal agreement would be enforced and the shortfall in the export obligation would be adjusted against their future AU/rep entitlements. They would also pay to the customs Authorities duty on proportionate quantity of raw material corresponding to the products not exported; and

(V) the above action would be without prejudice to any other action that might be taken against the licence holder under the provisions of Import Trade Control Regulations. "

( 7 ) IN view of the aforesa

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