2016 (5) TMI 891 - HC - Customs

Adjudication order upheld for failure to submit export details. Limited jurisdiction under Article 226.

Rotomac Electricals Ltd. Versus Union of India & Anr

Rotomac Electricals Ltd. Versus Union of India & Anr - 2016 (336) E.L.T. 390 (Del.) Issues Involved:1. Impugned adjudication order imposing penalty.2. Dismissal of the appeal by the Additional Director General of Foreign Trade.3. Rejection of the review application by the Reviewing Authority.4. Compliance with the export obligation under the Duty Exemption Scheme.5. Submission of requisite documents to prove export fulfillment.6. Jurisdiction and scope of judicial review under Article 226 of the Constitution of India.Detailed Analysis:1. Impugned Adjudication Order Imposing Penalty:The adjudication order dated 5th April 2010 by the Deputy Director General of Foreign Trade imposed a penalty of Rs. 3,46,30,500/- on the petitioner and its directors under Section 11(2) read with Section 11(4) of the Foreign Trade (Development and Regulation) (FTDR) Act, 1992. The penalty was imposed because the petitioner failed to submit export details in the requisite manner supported with the bank certificate/documents, treating the petitioner as a 100% defaulter in fulfilling the export obligation.2. Dismissal of the Appeal by the Additional Director General of Foreign Trade:The statutory appeal was dismissed on 5th January 2015. The Appellate Authority found that the petitioner did not submit the original DEEC book (Part-II) of exports and other necessary documents, such as the MODVAT non-availment certificate and original BRCs. The authority concluded that the petitioner did not have the requisite documents to prove fulfillment of the export obligation.3. Rejection of the Review Application by the Reviewing Authority:The review application was rejected on 21st/24th August 2015. The Reviewing Authority observed that the petitioner failed to submit the necessary documents even during the review process and found no grounds for review.4. Compliance with the Export Obligation Under the Duty Exemption Scheme:The petitioner claimed to have fulfilled the export obligation within the stipulated period and submitted three Bank Certificates of Export and Realisation (BCER). However, the petitioner misplaced the original shipping bills and did not get the entries made in the DEEC book. The respondents argued that without the DEEC book and original BRCs, it was not possible to ascertain the fulfillment of the export obligation in terms of quantity and value.5. Submission of Requisite Documents to Prove Export Fulfillment:The petitioner contended that the BCERs and copies of shipping bills should suffice to prove export fulfillment. However, the respondents insisted on the submission of the DEEC book and original BRCs as per the Handbook of Procedure (1997-2002). The court noted that the petitioner admitted to not submitting the required documents and did not challenge the rules requiring such submissions.6. Jurisdiction and Scope of Judicial Review Under Article 226 of the Constitution of India:The court emphasized that its jurisdiction under Article 226 is limited to ensuring that authorities act in accordance with the law. The court cannot grant relief if the petitioner does not comply with the rules or challenge them. The court upheld the concurrent findings of the Adjudicating Authority, Appellate Authority, and Reviewing Authority that the petitioner failed to prove fulfillment of the export obligation.Conclusion:The court dismissed the petition, finding no merit in the arguments presented by the petitioner. The court held that the petitioner did not fulfill the export obligation as per the Advance Licence and the Handbook of Procedure. The court also rejected the contention that the orders against the directors were bad due to the absence of a show cause notice to them. The petition was dismissed with costs of Rs. 25,000/- to the respondents.