The Delhi High Court quashed the assistant DGFT’s order imposing a penalty of rs. 50,00,000 under the Foreign Trade (Development & Regulation) Act, 1992.
The bench observed that the Petitioner appeared before the office of Additional DGFT on 18th September, 2023. During the personal hearing, the Petitioner explained that the original documents relating to license were currently in the possession Directorate of Revenue Intelligence,4 Zonal Unit, Ahmedabad, and the Petitioner was in the process of gathering the necessary documents and would submit the same at the earliest.
The court said that although it does not find any infirmity in the order, yet, considering that penalty amount imposed is substantial, and that the Petitioner is in the process of obtaining the documents, which they could not present in time due to circumstances beyond their control, the Court is inclined to extend a final opportunity to the Petitioner to furnish the necessary documents.
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Facts
The Petitioner obtained an Advance Authorisation License from the DGFT under the Foreign Trade Policy 2015-2020. The said license facilitated the import of Copper ROD 8mm which was intended for manufacturing and subsequent export of copper wire and was granted subject to the fulfilment of export obligations provided under Chapter 4.22 of the FTP 2015-2020 for a value of INR 4,96,16,064/-.
On 8th September, 2021, Deputy DGFT issued a show cause notice to the Petitioner alleging that the Petitioner has failed to fulfil the export obligations stipulated under the Advance Authorisation License issued by DGFT. Subsequently, on 6th September, 2023, the Petitioner was granted a final opportunity for personal hearing.
In compliance with the afore-noted direction, the Petitioner appeared before the office of Additional DGFT on 18th September, 2023. During the personal hearing, the Petitioner explained that the original documents relating to license were currently in the possession Directorate of Revenue Intelligence,4 Zonal Unit, Ahmedabad, and the Petitioner was in the process of gathering the necessary documents and would submit the same at the earliest.
In such circumstances, the impugned order dated 22nd September, 2023 was passed whereby the Assistant DGFT noted that despite several opportunities for submission of Export Obligation Documents, the Petitioner has failed to comply and wilfully defaulted in their export obligations. As a result, the Petitioner firm was placed under Denied Entry List in the B.O. Portal and, accordingly, a fiscal penalty of INR 50 lakhs was imposed on the Petitioner. Hence, the present petition.
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Submissions
Tarun Gulati, Senior Counsel for the Petitioner, without going into the merits of the case, submitted that if the Petitioner is afforded an opportunity, he shall furnish all the necessary documents to show compliance of the obligation under the Advance Authorisation License. As noted in the proceedings before the Additional DGFT, the lapse on the part of the Petitioner was on account of the non-availability of the documents for which the Petitioner was following up with the DRI, Ahmadabad.
Conclusion
The bench directed that the Petitioner is afforded six weeks’ time to furnish all the necessary documents in compliance of the obligation under the Advance Authorisation License.
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Case Details
Case name: Chintamani Sharma And Sons V/S Union Of India & Ors.
Citation: W.P.(C) 10750/2024, CM APPL. 44274-44275/2024
Court: Delhi High Court
Decision Date: 09/08/2024
Coram: Justice Sanjeev Narula
