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2004 Supreme(Del) 1146

High Court Of Delhi
GOKALDAS IMAGES LTD - Appellant
Versus
UNION OF INDIA - Respondent
W.P.(C.) 8043 of 2003
Decided On : 12/07/2004

Advocates Appeared:
ARVIND SHARMA, G.L.RAVAL, Gaurav Duggal, Jayant Bhushan, KULJIT RAVAL, MANISH DHIR, MANISH KUMAR BISHNOI, N.LOMESH, P.P.MALHOTRA, POONAM SINGH, Raghav Mathur, RAHUL KAUSHIK, RAJA CHATTERJI, Sidharth Mridul, Suhail Dutt

Headnote:Foreign Trade Development and Regulation Act, 1992 Section 11 (2), 12, 13 and 15 - Writ petition challenging levy of penalty for non-utilisation of quota of export entitlement - The provisions of the Act providing complete machinery to challenge the imposition of penalty - Quota provided for each country in the matter of garment export - Government taking steps to provide for full and maximum utilisation of quota - The condition for grant of entitlement as a statutory force u/s 5 of the Act as also the export and import policy - Challenge to authority to levy penalty for non-utilisation of quota held not maintainable. [Paras 26, 27, 28, 29, 30 & 31]

Sanjay Kishan Kaul, J.

( 1 ) THE petitioners are garment exporters and seek to raise common questions of law. The petitioners are impugning the authority of respondent Apparel Export Promotion Council (for short, aepc ) to levy penalty for non-utilisation of the quota allotted to respective petitioners. The petitioners also seek to challenge the basis for calculation of the extent of utilization of the export entitlement.

( 2 ) THE Foreign Trade (Development and Regulation) Act, 1992 (hereinafter to be referred to as, the said Act ) came into force on 19. 6. 1992. The object was to provide for development and regulation of foreign trade and inter alia augmenting exports. Section 5 of the said Act provides for the Central government to formulate and announce the Export and Import Policy from time to time and to amend that Policy. Section 11 stipulates that no exports can be made except in accordance with provisions of the said Act, Rules and Orders made thereunder as also the Export and Import Policy for the time being in force. Sub-section (2) of Section 11 imposes a liability of penalty not exceeding rs. 1,000/- or five times the value of goods in case of violation of provisions of the said Act, Rules or Orders and the amount determined can be recovered as arrears of land revenue. The penalty imposed or confiscation made under the said Act is not to prevent the imposition of any other punishment arising under any other law for the time being in force (Section 12 ). Section 13 provides for the adjudicating authority for purposes of determination of penalty or confiscation of goods. A person aggrieved by the decision made by the adjudicating authority is entitled to prefer an appeal before the competent authority in terms of Section 15 of the said Act.

( 3 ) THE petitioner s contention, thus, is that the said Act itself provides for the complete mechanism for violation of provisions of the said Act, Rules, orders, etc. and, thus, while formulating the Export and Import Policy, it cannot be said that Section 5 can authorize such mechanism separately under the Policy.

( 4 ) THE additional plea raised in respect of this imposition of penalty is that such penalty amounts to compulsory exaction of money and the same cannot be inferred and must be by a specific authority.

( 5 ) THE different writ petitions deal with different Export and Import policies. The Export and Import Policy for 1992-97 provides for export of textile products subject to conditions as may be notified by the Government of India (for short, goi ) from time to time. Notifications were issued for appointment of appellate authorities. The position is similar for the Policy of 1994-96. The garment Policy is separately notified taking into consideration that the exports are covered under the bilateral agreements.

( 6 ) THE total quota being fixed for different garments for each country, aepc is the quota administering authority to allot the quota. It may be noticed that this is an important function inasmuch as there is foreign exchange earning as a consequence of the export of garments and, thus, the quota has to be given with the object of maximum utilization since unutilized quota would result in the foreign exchange not being earned. There are different systems of allotment Past Performance Entitlement (PPE), Manufacture Exports Entitlement (MEE), Non-Quota Exporters Entitlement (NQEE ). Apart from these, there is also First Cum First Serve (FCFS) System. The importance of the utilization of quota is apparent from the fact that the Policy itself provides for a consequence of the exporter being liable for disqualification from getting entitlement in future in case he fails to utilize his export entitlement.

( 7 ) THE Policy provides for utilization of the quota by 30th of September, which can be extended up to 31st of December. However this extension is subject to Earnest Money Deposit (EMD)/ Bank Guarantee (BG ). In case of such forfeiture, the appeal lies befo































































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