The importance of following the terms of the license and completing the adjudication process before drawing conclusions.

1. The writ petitioner is a registered partnership firm and they are dealers in Pulses, Grams, Grains etc. The firm is registered under the Tamil Nadu Value Added Tax Act and the Central Sales Act and they have also been allotted Import and Export Code by the Office of the Joint Director General of Foreign Trade, Ministry of Commerce, Government of India, Chennai.

2. In respect of one of the items viz., Maize (Corn), the import is being effected through canalizing agencies. In this case, the first respondent, viz., State Trading Corporation of India Limited, is an Agency, acting on behalf of the petitioner for the purpose of importing Maize from Argentina. Licence has been issued by the Joint Director General of Foreign Trade, Ministry of Commerce, New Delhi to enable the first respondent to effect import and that licence enables the import of Maize on or before 31.03.2011.

3. The petitioner has entered into an agreement with the first respondent on 07.10.2010 for the purpose of carrying on the trade in importing the said goods. Under the agreement, the first respondent has undertaken to import 3000 MTs of Maize (Corn) at the rate of USD 565 per MT in Chennai Port/Nheva Port at Mumbai valued at USD 16,95,000/-, which is equivalent to Rs.7,89,87,000/- and the concessional rate of duty is as per the notification issued by the Government of India for the financial year 2010-2011 in notification No.33 of 2010, dated 12.3.2010. One of the main condition for such import is that the import must be for the utilisation of the actual user and the same has to be completed on or before 31.3.2011.

4. After getting remittance of the amount of invoice, the first respondent, who acts on behalf of the petitioner, has to clear the goods. Under the terms of the agreement, especially Clause 20, the petitioner has given an undertaking to abide by the various circulars, notifications, etc. issued by the Government of India from time to time. That apart, the petitioner has given indemnity to the first respondent against any loss or cost, including taxes, customs duty, damages, demurrage, penalties etc.

5. For the year 2009-2010, the petitioner, through the first respondent, has effected import of certain quantity and the remaining quantity has entered into the Port of Chennai as well as the Port of Mumbai. It appears that in the meantime there has been some investigation effected by the second respondent, viz., Director of Revenue Intelligence, on the basis that the petitioner is using the benefit of the notification by importing maize at concessional rate against the terms of licence and mainly on the ground that the petitioner is not having a manufacturing unit of its own at Chennai and therefore, it amounts to deliberate deception by the petitioner.

6. It appears that summons have been issued to the petitioner under Section 108 of the Customs Act, 1962 (for brevity, "the Act"), in response to which the petitioner has also submitted his objections. It also remains a fact that subsequent to the objections given by the petitioner, the department has not taken any further action. It is relevant to note that after such objection is received, it is always open to the department, under Section 28 of the Act, to issue show cause notice and after completing the adjudication process, effective orders can be passed, including that of confiscation and other measures which are enumerated under the provisions of the Act. In the case on hand, such steps are not yet taken and except the issuance of summons under Section 108 of the Act and receipt of objections from the petitioner, no further action has been taken as on date by the second respondent.

7. It also remains a fact that the licence issuing authority, which is the Ministry of Commerce, to whom the second respondent is stated to have complained about the conduct of the petitioner, has also not initiated any action. But the apprehension of the second respondent is that the petitioner should not b