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2001 Supreme(Del) 170
High Court Of Delhi
OPTINA IMPEX PRIVATE LIMITED - Appellant
Versus
UNION OF INDIA - Respondent
Civil 5529 of 1999
Decided On : 02/09/2001
S.P.Dhupar, U.Hazarika
Headnote:Import & Export (Control) Act, 1947 — Section 41(1)(a) — r/w Section 20 (2) of Foreign Trade (Development & Regulation) Act, 1962 — Writ under Article 226 of Constitution of India, 1950 — No misuse of imported goods — Nowhere in the show cause notice it has been averred that the petitioner had misused the imported goods — Until and unless allegations were made in the show cause notice that the goods imported under the OGL license has been misutilised penalty cannot be imposed under Section 41(1)(a) of the Import and Export Control Act, 1947. The order passed by the Adjudicating Authority under Section 41(1)(a) of the Act is misconceived and quashed. Show cause notice was issued by the respondent under Sections 4-M and Section 41(1)(a) of Import & Export (Control) Act, 1947 read with Section 20(2) of the Foreign Trade (Development & Regulation) Act, 1992 to the petitioner. The finding given by the Adjudicating Authority and the decision of the Committee which upheld that finding was perverse as that was not the case made out and set out by the respondent in the show cause notice. Industrial Unit which has been granted certain privileges on account of its being 100 per cent export oriented unit, no doubt, has got the advantage of importing goods without payment of custom duty or other duties which are normally applicable in case of a Unit which is not a 100 per cent export unit until and unless the authorities come to the conclusion that the said import made under the license has been misutilised or has been misused contrary to the terms of the license, it cannot be said that Section 41(1) (a) of the Act will come into operation. Any violation of condition for license i.e failure to achieve value addition and for non-fulfilment of export obligations action could have been resorted by the Department under Clause 8 of the Import (Control) Order, 1955.
Petition is allowed.
( 1 ) RULE. THE petitioner was given an approval by the respondent for setting up of a hundred per cent export oriented unit. Unit of the petitioner was set up in gujarat. The petitioner s Unit was supposed to export the lenses of high quality and condition in order to successfully compete in the world market.
( 2 ) SHOW cause notice was issued by the respondent under Sections 4-M and Section 41 (1) (a) of Import and export (Control) Act, 1947 read with Section 20 (2) of the foreign Trade (Development and Regulation) Act, 1992 to the petitioner. Adjudication order was passed on 3/3/1998 and an appeal preferred by the petitioner before the appellate Committee of the respondent was also dismissed by the Committee.
( 3 ) IN the writ petition the petitioner has impugned the order passed by the Appellate Committee as well as the order passed by the Adjudicating Authority.
( 4 ) MR. HAZARIKA learned counsel for the respondent has vehemently contended that the approval for setting up of the industry of the petitioner was granted on the basis of condition attached to the Letter of Intent. On the basis of the said Letter of Intent Mr. Hazarika has contended that there was shortfall in the export, the capital goods were imported by the petitioner without payment of import duty under said licence and the petitioner enjoyed other benefits as well. He has contended that Value addition was to the extent of (-)26. 56% although same ought to have been 26. 56%. Mr. Hazarika has contended that impugned order passed by the Director General of Foreign Trade has dealt in detail on the submissions made by the petitioner.
( 5 ) ON the other hand, learned counsel for the petitioner has contended that the show cause notice issued to the petitioner was based on the non performance of the petitioner as an export unit. Same was not passed on misuse of goods under the licence. He has further contended that the goods could have been misused if the same would have been used in violation of conditions of licence which in this case were imported under OGL. At page 59 of the paper book it has been specifically mentioned in the order No. of 19/88-91, Open General licence No. 19/88 dated 30/3/1988 that the goods has to be imported subject to the actual User condition as applicable there to in each case.
( 6 ) HE has further contended that if there was a misuser and the goods were imported then recourse for appropriate action could have been taken by inviting clause 8 of the Import Control Order. Clause 8 of Import control Order reads as under:-
"power to debar from importing goods or from receiving licences or allotment of imported goods:- (1) The Central government or the Chief Controller of imports and Exports may debar a licensee or importer or any other person from all or any of the following i. e. importing any goods or receiving licences or allotment of the imported goods through the State trading Corporation of India. The Mineral and Metal Trading Corporation of India, or any other similar agency and direct, without prejudice to any other action that may be taken against him in this behalf, that no licence or allotment of, imported goods shall be granted to him and he shall not be permitted to import any goods for a specified period under this Order:- (a) if his application for licence is at any time found to be not in conformity with any provision of this Order; or (b) if such application is found to contain any false fraudulent or misleading statement; or (c) if he is found to have used in support of his application any document which is false or fabricated or which has been tampered with; or (d) if he has, on any occasion, tampered with an import licence or has imported goods without a licence or has been a party to any corrupt or. fraudulent practice in his commercial dealing or in obtaining a licence, or is round to nave solicited any licence by ottering an inducement to the holder of the licence or otherwise; or (e) if his agent or empl
