TaxTMI 
TaxTMI 
2021 (9) TMI 86
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....using these capital goods and export the same and thereby earn foreign exchange. The capital goods imported under the above EPCG authorisations were installed in the addresses mentioned and declared to the licencing authority viz., the Joint Directorate General of Foreign Trade, Coimbatore. 3. The petitioner had obtained the redemption certificate in respect of all the 38 licenses, which were issued from the office of the 1st respondent. In respect of 18 out of 38 licences, the petitioner admittedly could not fulfill the export obligation and therefore, the differential duty was paid along with the applicable interest. On payment of the differential duty along with the interest, the office of the 1st respondent had discharged the petitioner company from the export obligation imposed on the petitioner in respect of the said 18 licences. 4. The learned Senior counsel appearing on behalf of the writ petitioner mainly contended that the Show Cause Notice impugned lacks jurisdiction as the very initiation is beyond the period of limitation as contemplated under Section 16 of the Foreign Trade (Development and Regulation) Act, 1992 [hereinafter referred to as the 'Act']. ....
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....o years for such a power to review. 7. As rightly pointed out by the learned counsel for the petitioner, Section 16 of the FTDR Act empowers the Director General to review any decision or order made by the Joint Director of Foreign Trade. The power of review of any decision or order is only under Section 16. 8. As and when the second respondent had issued the EPCG licence and the Export Obligation Discharge Certificate, he becomes "functus officio" and if at all, such an order of the second respondent is to be reviewed, the same can be done only by the Director General, as provided under Section 16. Apparently, the impugned notice issued by the second respondent itself is without any jurisdiction and contrary to the statutory provisions. 9. The learned counsel for the petitioner relied upon the decision of the Gujarat High Court in the case of Alstom India Ltd., Vs. Union of India reported in 2014 (301) E.L.T. 446 (Guj.) on this proposition. The relevant portion of the order reads as follows:- "31. On going through the provisions of the FTDR Act, we find that those do not grant power to the Respondent No.2 or its subordinates to redetermine or re....
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....med such power in colourable exercise of the power conferred upon it. 10. Following the aforesaid decision in Alstom India Limited, a Division Bench of the Delhi High Court in Simplex Infrastructure Ltd., Vs. Union of India & others in WP.(c) No.4455 of 2013 had held that Joint DGFT has no powers to review his own orders in view of Section 16 of the FTDR Act. The relevant portion of the order reads as follows:- "4. ... Further, it is argued that the power to review an order under the policy is granted to the DGFT under Section 16 of the Act, which in this case was impermissibly exercised by the Deputy DGFT. .. .. 8. In this case, the impugned order-inoriginal, which acted upon the decision taken by the PIC, is of the Joint DGFT, dated 30 th March, 2012. Clearly, in terms of the decision in Alstom (supra), with which this Court concurs, there can be no review of an earlier refund except in accordance with the provision of Section 16 of the FTDR Act, which only permits the DGFT or the Central Government (in case the original order was by the DGFT) to exercise the power of review." 14. For all the foregoing reasons, the impugned notices dated 26.02.2016 pass....
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.... rupees and not more than five times the value of the goods or services or technology in respect of which any contravention is made or attempted to be made, whichever is more. (3) Where any person signs or uses, or causes to be made, signed or used, any declaration, statement or document submitted to the Director General or any officer authorized by him under this Act, knowing or having reason to believe that such declaration, statement or document is forged or tampered with or false in any material particular, he shall be liable to a penalty of not less than ten thousand rupees or more than five times the value of the goods or services or technology in respect of which such declaration, statement or document had been submitted, whichever is more." 13. Section 14 of the Act denotes Giving of opportunity to the owner of the goods, etc., and reads as under: "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 confiscate such goods or conveya....
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....ners in a usual manner and there was no adjudication as such in respect of these aspects at the time of issuing redemption certificate at the first instance. When routine procedures are followed in issuing certain certificate based on the informations and details furnished by the person concerned and subsequently, the authorities came to understand that such certificate or document are forged or fabricated one, then the Act contemplates action is to be initiated and in such circumstances, a show cause notice under Section 14 is to be issued in order to comply with the principles of natural justice and to provide opportunity, enabling the person to defend their case in the manner known to law. 17. The learned Senior Panel counsel contended that the power of Review contemplated under Section 16 is general in nature. The Central Government, in the case of any decision or order, made by the Director General, or the Director General in the case of any decision or order made by any officer subordinate to him, may on its or his own motion or otherwise, call for and examine the records of any proceeding, for the purpose of satisfying itself or himself, as the case may be, as to the corr....
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....nished by the petitioner and such certificate cannot be construed as an adjudicated order for all purposes in order to exercise the power of review under Section 16 of the Act. 22. The scheme of the Act provides Power relating to Search and Seizure under Section 10 of the Act. The Central Government shall authorize any person to enter into the premises, where the goods are kept, stored or processed, manufactured, traded or supplied or received for the purpose of import or export and searching, inspecting and seizing of such goods, documents, things and conveyances connected with such import and export of goods. In the event of any such Search and Seizure, then if the report is filed, then Section 11 stipulates Contravention of provisions of this Act, rules, orders and foreign trade policy. Sub-Section (2) states that "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 foreign trade policy, he shall be liable to a penalty as stated subsequently." Sub-Section 3 to Section 11 unambiguously stipulates that "Where any person signs or uses, or causes to be made, signed or ....
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....ng the procedures as contemplated under the other sections as discussed in the aforementioned paragraphs. 26. In the present case, the redemption certificate issued by the third respondent states that based on the statement of exports made by the petitioner, the certificate was issued. The competent authority issued a certificate, stating that export obligation has been fulfilled and such a certificate issued cannot be considered as an order passed after adjudication of issues. Redemption certificate is issued and subsequently, the Director of Revenue intelligence gathered information, stating that the petitioner had submitted false and forged document for the purpose of getting the redemption certificate. The relevant portion of the report dated 08.06.2016 submitted by the Directorate of Revenue Intelligence reads as under: "5. From the copes of form ANF5B, some of which were submitted by Thriveni Earth Movers Pvt Ltd., and some received from Assistant Director General of Foreign Trade, Coimbatore, it is found that export obligation was claimed to have been fulfilled against export made by one J J S Ahluwalia. K J S Ahluwalia is a separate firm who had taken iron ore m....
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....g the course of importing or exporting. Thus, the purpose of the Act is to be interpreted constructively and more so, a purposive interpretation is to be adopted in a pragmatic manner, so as to ensure that the circumstances as contemplated are dealt with in a manner for the purpose of achieving the legislative intention. It may appears to be that Section 16 would be relevant in such circumstances, where a certificate is issued. However, the legislative intention and the other provisions contemplated are more relevant for the purpose of forming an opinion that where an Intelligence Report is submitted, then the Scheme of the Act in entirety is to be interpreted, so as to ensure that such circumstances are also dealt with by following the procedures. 29. As far as the judgment of the High Court of Madras, it is not discussed, whether the notice was issued under Section 14 or under Section 16 of the Act. The case was proceeded on the basis that power under Section 16 for review is to be exercised within a period of 2 years as contemplated. It is not in dispute that in case of review, the period of limitation as contemplated is to be adhered to scrupulously. However, whether the cas....
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....here is a fresh cause of action after issuing the redemption certificate arose due to the report of the Director of Revenue Intelligence, and such report is the cause for issuing a show cause notice under Section 14 for the purpose of initiating action under Section10 & 11 (2) of FT (D&R) Act, 1992, thereafter, if necessary, an order under Section 14-D is to be passed, then Section 16 Review would apply only if any such final orders are passed under Section 14-D of the Act and not otherwise. 32. In respect of the contention that Subordinate officer issued the show cause notice, this Court is of the considered opinion that the provisions would reveal that the actions are initiated for submitting false and forged documents and therefore, show cause notice is to be issued by the original authority and if a final order is passed under Section 14-D of the Act, thereafter, the power of Review under Section 16 is exercisable. 33. This being the scope of the provisions of the Act, the contentions raised that the redemption certificate is final order, which can be reviewed under Section 16 of the Act is untenable and the redemption certificates issued based on the informations furnish....