Export obligation defaults attract penalty where scheme benefits were taken and mitigating factors were already considered.

Concessional benefits under an export processing scheme carried corresponding export obligations and value-addition norms, and failure to comply attracted the prescribed penalty for breach of import and export conditions. The show cause notice was not invalid merely because it omitted the exact statutory provision, where the substance of the alleged breach was clear. A plea of bona fide conduct and absence of contumacious intent did not displace the penalty regime after the party had enjoyed scheme benefits but failed to perform the required obligations. Mitigating factors such as fire, labour unrest and business difficulty had already been considered, and the appellate committee reduced the penalty and lifted debarment; the reduced penalty was upheld.

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Issues: Whether the maintenance of penalty for non-fulfilment of export obligations under the export processing scheme was liable to be interfered with in writ jurisdiction, and whether absence of a detailed reason for retaining the reduced penalty vitiated the appellate order.

Analysis: The petitioner had obtained concessional benefits under the export processing scheme, including allotment of land and duty-free import facilities, and was correspondingly bound to fulfil the stipulated export obligations and value-addition norms. The failure to meet those obligations attracted the statutory penalty prescribed for misuse or non-observance of the conditions attached to the import and export permissions. The Court held that the show cause notice was not invalid merely because it did not set out the exact statutory provision, since the substance of the allegations and breaches was clear. It also held that the plea of bona fide conduct and absence of contumacious behaviour did not displace the penalty regime in a case where the party had taken benefits under the scheme and failed to discharge the corresponding obligations. The appellate committee had already considered mitigating circumstances, including fire, labour unrest, and business difficulties, and had reduced the penalty and lifted debarment.

Conclusion: The reduced penalty was upheld, and no ground was made out for interference with the appellate order.

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