HC dismisses writ petition challenging Rs. 1 crore EPCG penalty for export obligation failure and document non-submission under section 15

HC dismissed writ petition challenging Rs. 1,00,00,000 fiscal penalty under EPCG Scheme for failure to submit required documents and fulfill export obligations. Petitioner failed to maintain Annual Average exports, submitted duplicate bills, and requested consideration of exports outside obligation period. Court found petitioner bypassed available statutory appeal remedy under section 15 of Foreign Trade (Development Regulation) Act, 1992 to avoid depositing penalty amount, rendering writ petition without merit.

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Issues:
Challenging fiscal penalty under Foreign Trade Act, 1992 for non-compliance with export obligations and related documentation.

Analysis:
The petitioner was granted an Export Promotion Capital Goods (EPCG) license with specific export obligations, including submitting export documents and installation certificates within set timeframes. Failure to comply led to the imposition of a fiscal penalty by the respondent. The petitioner argued efforts were made to fulfill requirements, including direct and 3rd party exports, and requested a reduction in the Annual Average maintenance. The respondent's counter affidavit highlighted deficiencies in document submissions by the petitioner, leading to show cause notices and multiple opportunities for the petitioner to rectify the issues. However, the petitioner failed to provide the necessary documents, leading to the imposition of the penalty.

The respondent contended that despite reminders and opportunities for personal hearings, the petitioner consistently failed to submit required documents, displaying delay tactics. The adjudicating authority imposed a penalty of Rs. 1,00,00,000/-, which was challenged in court. The court previously remanded the issue for fresh consideration and a fair hearing, which was conducted. The petitioner's request to consider exports from subsequent periods not covered under the original obligation was rejected as per scheme conditions. The court noted that the penalty was imposed under the Foreign Trade Act, 1992, with an appeal provision within 45 days of the adjudication order issuance. However, the petitioner directly approached the court under Article 226 of the Constitution to avoid paying the penalty.

In conclusion, the court found the writ petition lacking merit and dismissed it, closing the connected miscellaneous petition without costs. The judgment upheld the imposition of the fiscal penalty under the Foreign Trade Act, 1992, emphasizing the importance of compliance with export obligations and documentation requirements under the EPCG scheme.

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