TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 204
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....amount which was imposed on the company. If he not paid the penalty, penal action will be taken as against the petitioner as per Section 11(7) of the Foreign Trade (Development and Regulation) Act, 1992. The allegation as against the company is that non-fulfillment of export obligations incurred under the Export Promotion of Capital Goods Scheme (EPCG) License/Authorization No.0430009278 dated 13.12.2010 which was due to be fulfilled within a period of eight years from the date of issuance of license. As per the order in Original the condition on the company under the scheme was to fulfill 50% export obligation in the first block within six years from the date of issue of license and the balance 50% in the next two years. The order in original is during the time which the nonfulfillment of export obligations and consequent liabilities of the company under the EPCG Scheme arose was in the years 2016 and 2018. Therefore, it was happened after period of five years from the date of his resignation and from his Directorship of the company. That apart, no specific allegation as against the petitioner is that the petitioner was also involved in the day today affairs of the company during ....
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....L Drums Private Limited, Chennai had not submitted the export documents under ANF-5B or year-wise progressive Report and Installation Certificate as required, office had issued cautionary letter No.04/21/021/00882/AM11 dated 15.04.2019. Since no reply was received, a Show Cause Notice No.042102100882 (IEC:0410027618) dated 20.02.2020 was issued to M/s.KFPL Drums Private Limited, Chennai within a copy marked to the Branch/Factory address and Directors providing the firm and its representatives an opportunity to avail a personal hearing on 28.02.2020, to explain the reasons and facts within a period of 15 days, as to why action should not be taken for placing the firm under Denied Entity List, refusing issuance of further licenses/authorizations/renewal of old licenses/authorizations and other export benefits etc., in terms of Section 9(2) of Foreign Trade (Development & Regulation) Act, 1992 read with Rule-7(k) of Foreign Trade (Regulation) Rules, 1993 and as to why penalty should not be imposed adjudicating their case under section 11(2) of Foreign Trade (Development & Regulations) Act, 1992, in exercise of the powers under Section-13 of the Foreign Trade (Development & Regulation)....
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....e Court held that in case of a private company, recovery of tax dues from it cannot be made from its directors, unless permitted by specific provisions of the law or by an agreement between the parties. In Mukesh Gupta v. State of Haryana- (1996) & PHT 326 (P&H), the Punjab and Haryana High Court examined and held that a director was not liable personally for the amount due towards arrears of sales tax from the company. This view was reiterated by this Court in Suneet Khurana v. Assistant Collector-(1997) 10 PHT 495 (P&H). 8. In Om Prakash Waleche v. State of Haryana, 2009 (238) ELT. 215 (PBH) the Punjab and Haryana High Court upheld the assessee's contention that no recovery either of Haryana General Sales Tax or Central Sales Tax could be effected personally from the Director in respect of the liability of the Company, Again, this view was followed in A.P. Raheja and Another v. State of Haryana and Others (2010) 29 VST 103 (P&H). To end the discussion, the decision of the Kerala High Court, in Nishad Patel & Anr. v. State of Kerala & Ors (1999) 96 Comp Case 861 (Ker.) requires to be noticed. In that case, it was held that : "In the present case what respondents Nos 3 to 5....
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....stretch be construed as notice to its directors, since it contained no proposal to impose penalty on the directors of company. Even if it is presumed, for the sake of arguments, that the aforesaid notices were in the knowledge of the petitioner, though his case is that the said notices were not served even on the company, the same having been dispatched to a place where the Company was no more functioning at the time the notices were dispatched, he could not have anticipated to a place where the Company was no more functioning at the time the notices were dispatched, he could not have anticipated from the said notice that penalty in terms of Section 11(2) of the Act was sought to be imposed upon him as well. In any case, as noted earlier, no penalty was ever imposed upon the petitioner. During the course of hearing, the learned counsel for the petitioner brought it to my notice that from the letter dated 23.03.2008, which is a document filed by the respondents, it is evident that one Mr.Satish Malhotra, who appeared in the office Joint Director General of Foreign Trade on 12.03.2008, had informed him that the company was lying closed since 1998 and the said office had sent various ....
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....ntral Excise and Ors. 196 (2013) DLT 596-2013 (288) E.LT. 63 (Def). when it was held that the dues recoverable from the company cannot be, in the absence of a statutory provision, be recovered from the directors. There is no provision in the Act for recovery of the penalty imposed upon a company from its directors, even in the event the said penalty cannot be recovered from the Company, Therefore, the penalty imposed upon the company cannot be enforced against the petitioner. 9. Another question which incidentally arises in this case is as to whether, in a case where import license is issued to a company and there is a default in carrying out the export obligation attached to the license, penalty in terms of Section 11(2) of the Act can be imposed upon the director of the company or not. The contention of the learned senior counsel was that since the expression "Person' used in subsection (2) of Section 11 refers only to the person who makes or abets or attempts to make any export or import and admittedly import in this case was made by the company which is a legal personality independent of its directors, no penalty against the directors can be imposed on failure of the comp....
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....legal facade. So it is permissible to lift the corporate veil of Duncans to determine whether a particular director could be proceeded against in pursuance to the impugned show cause notices or whether he is liable for the payment of all duties charged and to all penalties incurred. 12. We can only say this that after the veill of the corporate entity is lifted, the adjudicating authorities will determine as to which of the directors is concerned with the evasion of the excise duty by reason of fraud, collusion or willful misstatement or suppression of facts, or contravention of the provisions of the Act and the Rules made thereunder. 50 far as Individual liability of o a director to the payment of excise duty and penalty is concerned, no liability can be fastened on him unless the department is able to show as to how and to what extent a particular director is liable. We wish to say no more at this stage." In Krishan Kumar Bangur v. Director General of Foreign Trade-2006 (88) DRJ 680, a company had obtained EPCG license which carried a condition to export to the extent of four times of CIF value, within a period of five years. The said obligation, however, was not fulfilled. O....