2013 (9) TMI 706

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....stom notification Nos.30/97 & 31/97 both dated 1.4.1997 as amended from time to time. 2. The aforesaid Company, however, did not honour the export obligations subject to fulfillment of which the import licence was issued. A show cause notice dated 17.3.2004 was then issued to the Company requiring it to furnish documents mentioned in the said notice, which primarily would be the documents evidencing fulfillment of the export obligations attached with the advance licence and intimating that in case it failed to furnish any of the documents mentioned in the notice, it should show cause as to why action should not be taken against it inter alia to declare it as a defaulter in fulfillment of export obligations. The aforesaid notice was followed by identical notices dated 21.7.2005 and 12.2.2008. Vide order dated 28.3.2008, the aforesaid Company was declared defaulter in non-fulfillment of export obligations against the advance licence dated 28.8.1997 and the concerned Section was instructed not to allow four (4) Directors of the Company namely, Ved Kapoor, K.P. Kapoor, Satish Mathautra and Jaiwant Bery, to avail of licence of any category and any other benefit under the Exim Policy. T....

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....he provisions of this Act, the rules and orders made thereunder and the export and import policy for the time being in force. (2) Where any person makes or abets or attempts to make any export or import in contravention of any provision of this Act or any rules or orders made thereunder or the export and import policy, he shall be liable to a penalty not exceeding one thousand rupees or five times the value of the goods in respect of which any contravention is made or attempted to be made, whichever is more. xxxx xxxx xxxx xxxx xxxx (4) A penalty imposed under this Act may, if it is not paid, be recovered as an arrear of land revenue and the Importer - exporter Code Number of the person concerned, may, on failure to pay the penalty by him, be suspended by the Adjudicating Authority till the penalty is paid." Section 14 of the said Act reads as under: "14. Giving of opportunity to the owner of the goods etc. - No order imposing a penalty or of adjudication of confiscation shall be made unless the owner of the goods or conveyance, or other person concerned, has been given a notice in writing - (a) Informing him of the grounds on which it is proposed to impose a penalty or to con....

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....A company is a legal entity independent of its directors and/or shareholders. The company enjoys its own legal right and can also be subjected to duties, statutory or otherwise. The business carried out by a company belongs to it as a juridical person and it is the company alone which is duty-bound to discharge its debts and liabilities. In the absence of a statutory provision, the directors of a company cannot be made liable to discharge its liabilities unless they have stood as guarantors for discharge of such a liability. Therefore, unless a Statute so provides, the penalty imposed upon a company cannot be recovered from the personal assets of its directors. Reference may be made to a Division Bench judgment of Punjab & Haryana High Court in A.P. Raheja and Anr. vs. State of Haryana and Ors. [2010]154CompCas449 (P&H). In the aforesaid case, the petitioner was served with a notice for recovery of sales tax due from the company on the ground that he had been a director of the company. He filed a writ petition, challenging the said notice and contended that the company being a separate entity, recovery cannot be effected from him. Accepting the contention, the High Court held that ....

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....e liabilities of the company. However, in certain cases, the Courts can lift the corporate veil, inter alia, in the cases where a) the Statute itself contemplates such lifting; b) fraud or improper conduct is intended to be prevented and; c) where a taxing statute or a beneficial statute is sought to be evaded. The nature of the impugned conduct, the extent of public interest involved and effect on the effected parties would be amongst the relevant considerations, while deciding whether to lift the corporate veil or not. In Santanu Ray vs. Union of India 1988(38) E.L.T. 264 (Del.), the petitioners were served with notice under Section 11A of Central Excise and Salt Act, 1944, which provides that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion or willful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or the Rules with intent to evade payment of duty by such person or his agent, then proceedings can be initiated by issue of a show-cause notice. The notice was challenged, inter alia, on the ground that the Statute imposed no liability, obliga....