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2018 Supreme(Del) 2874
IN THE HIGH COURT OF DELHI AT NEW DELHI
SANJIV KHANNA, CHANDER SHEKHAR, JJ.
Xtraa Cleancities Ltd. – Petitioner
Versus
Union of India & Ors. – Respondents
Writ Petition (Civil) No. 3909 of 2013
Decided On : 30-07-2018
For the Petitioner: Mr. Prashant Kumar, Mr. Rajeev Singh and Mr. Amit Singh, Advs.
For the Respondent: Mr. Vikram Jetly, CGSC for Union of India
Headnote:
Foreign Trade (Development and Regulation) Act, 1992 - Section 11, 12, 13, 15 - Special Economic Zones Act, 2005 - Section 11 (2), 20, 21, 22, 23, 58 - Penalty imposed - Confiscation - Appellate Authority - Jurisdiction - Penalty imposed - Confiscation made in addition to - It would not prevent imposition of any other punishment to which the person is liable under any other law for the time being in force - Constitutional vires of Section 12 of the F.T. Act is not under challenge - Question of double jeopardy is not alleged - Penalty under provisions of the SEZ Act has not been imposed - Held, it cannot be said that the Development Commissioner and the Appellate Authority lacked jurisdiction to impose penalty under Section 11 read with Sections 13 and 15 of the F.T. Act.
Special Economic Zones Act, 2005 - Section 11 (2), 20, 21, 22, 23, 58 - Special Economic Zones Rules, 2006 - Rule 19, 46 1 (C), 27 (10) - Form was filled - Self certified by the petitioner - Wrong declaration - Penalty justified - Counter-signed by the Assistant Development Commissioner, VSEZ - Development Commissioner did not carry out actual verification exercise - Petitioner had self-certified that biodiesel to be exported was eligible for the GSP certification as goods of Indian origin - False certificate has been issued - It has been detected by the European Union Customs Authorities - Part responsibility for such a lapse also lies on the SEZ officials who did not carry out due diligence - Loss and adverse consequences for India, because of false and wrong certification given by the petitioner on Indian origin of the goods - Petitioner had earned undue profit at the risk and peril of the country's reputation - Held, petitioner cannot wash away its responsibility and failure to furnish correct information and declaration on the origin of goods - Petitioner had made false declaration to procure wrong GSP certification - They were beneficiaries of the wrong declaration, which had jeopardised and harmed the country's prestige and reputation - Penalty was justified - Writ petition is dismissed.
SANJIV KHANNA, J.
M/s XTRAA Cleancities Limited, now known as M/s Nandan Cleantec Industries Limited, has filed the present writ petition for quashing and setting aside :-
(a) Gazette Notification Nos. S.O. 193(E) and 194(E) dated 6th March, 2000 issued by the Ministry of Commerce, Government of India.
(b) Order No.12013/2/2012/ADJ/AC dated 22nd April, 2013 passed by the Appellate Authority constituted under Section 15 of the Foreign Trade (Development and Regulation) Act, 1992 ('F.T. Act', for short).
2. The present litigation has a checkered and variegated history as there have been several rounds of earlier litigation. To avoid prolixity we would only refer to relevant facts in view of the limited issues raised and contested by the petitioner.
3. Order dated 16th December, 2013 passed in the present Writ Petition crystallises the two issues that arise for consideration. First issue relates to the jurisdiction of the Development Commissioner appointed under Section 11 of the Special Economic Zones Act, 2005 ('SEZ Act' for short) to pass an order imposing penalty under Section 11 (2) of the F.T. Act. Second issue relates to imposition of penalty, the submission of the petitioner being that the alleged violation did not have any concern with or violate the F.T. Act or the SEZ Act.
4. The petitioner consequent to letter of approval issued under Rule 19 of the Special Economic Zones Rules, 2006 ('SEZ Rules' for short) had established a unit for manufacturing biodiesel, blended biodiesel and glycerin in the Visakhapatnam, Special Economic Zone ('VSEZ' for short).
5. On 29th March, 2010, the petitioner made an application for issuance of two Generalised System of Preferences Certificates of Indian Origin ('GSP Certificate', for short) with the office of Development Commissioner, VSEZ, for export of Fatty Acid Methyl Easter (FAME), commonly known as biodiesel, to Switzerland. Application was supported by commercial invoice and Bill of Lading.
6. On the basis of the declaration made in the application and documents submitted by the petitioner, GSP certificates EI 32069058 (GSP-2/2009-10) for 11999.876 MT of biodiesel and EI 32069059 (GSP-3/2009-10) for 13000.415 MT of biodiesel both dated 29th March, 2010 were stamped and issued.
7. Biodiesel was exported to Switzerland and allowed entry without duty in view of GSP certificates of Indian origin.
8. Subsequently, on 11th November, 2011 intelligence inputs were received from the Export Inspection Council of India ('EIC', for short) expressing doubts on the true origin of the consignments of biodiesel.
9. Consequent investigation, as per the Respondents, had confirmed that the petitioner had manufactured only 5700.647 MT of biodiesel in the VSEZ unit which was then moved to customs bonded warehouse in October, 2009 and February, 2010 for temporary storage prior to export. Balance 19299.644 MT of biodiesel was a non-SEZ manufactured cargo of American origin imported by the petitioner in December, 2009. The petitioner was not entitled to and had wrongly procured GSP certification for export to Switzerland as 19299.644 MT of American origin biodiesel was blended with 5700.647 MT of biodiesel of Indian origin manufactured by the petitioner. For GSP certification of Indian origin, blending proportion could not have exceeded 50% i.e. at least 50% of the blended biodiesel should have been of Indian origin. Petitioner had made false declaration in its application dated 29th March, 2010 pursuant to which wrong GSP Certificates of Indian origin were issued.
10. Thus, the petitioner as per the respondents had fraudulently exported 19299.644 MT American biodiesel along with 5700.647 MT of Indian biodiesel under false and wrong GSP Certification of Indian origin to avoid anti-dumping duties imposed by countries of European Union, Switzerland and others on American origin biodiesel.
11. In view of the said findings, show cause notice dated 14th November, 2011 was issued to the petitioner under Section
