(PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Heard learned counsel for the parties for the final disposal of the petition.
2. The petitioners have filed this petition making following substantive prayers:-
“15.(A) That Your Lordships may be pleased to issue a Writ or Certiorari or any other appropriate writ, direction or order, quashing and setting aside OIO F.No.08/199/AM-07/ECA dated 17.7.2009 (Annexure-”G”) and OIA NO.11/120/09-
10/ECA.1/2529 dated 11/17.11.2011 (Annexure-”I”) and also Show Cause Notice F.No.08/199/AM- 2007/ECA dated 25.9.2006 (Annexure-”F”) with all consequential benefits;
(B) That Your Lordships may be pleased to issue a Writ of Mandamus or any other appropriate writ, direction or order, directing the respondent No.3 herein to decide forthwith case pertaining to OIO No.08/F-5/68/AM-03/ECA dated 18.5.2006 in accordance with the remand order being OIA dated 3.4.2007;”
3. In brief, facts are as under:-
Petitioner No.1 is the company registered under the Companies Act. Petitioner No.2 is its office bearer. The petitioners are engaged in the manufacture of textile goods. The petitioners applied for and were granted an Advance Licence dated 3.12.1991 enabling the petitioners to import materials with CIF Value of Rs.12,73,500/-, which was later on enhanced to 13,48,500/-. Under such licence, the petitioner was allowed to import goods duty free on a condition of exporting finished products, namely, 100% Polyester Printed Sarees/ Fabrics. On the premise that the petitioners did not fulfill its export obligation flowing from such licence, respondents issued a show cause notice dated 24.10.2002 calling upon the petitioners as under:-
“11. Now, therefore in exercise of the powers vested in me under Section 13 of the Foreign Trade (Development & Regulation) Act, 1992, I call upon the Noticee firm to show cause notice within period of 30 days from receipt of this notice as to why action should not be taken under Section 11(2) of the Foreign Trade ( Development & Regulation) Act, 1992 to impose fiscal penalty on the Noticee firm. If you want to hear in person to explain your case appear before the undersigned on 18.8.2003 at 3.00 P.M.
4. Adjudicating authority passed his order in original dated 18.5.2006 on such show cause notice and imposed a penalty equivalent to Rs.15,14,913/-. This order in original was challenged by the petitioners before the Appellate Authority. Additional Director General of Foreign Trade, partially allowed the appeal by his order dated 3.4.2007. He set aside the order in original and remanded the case back to the Adjudicating Authority for de novo consideration in terms of the provisions of Public Notice No.79 dated 2.1.2006 and as per the Foreign Trade policy. He further provided that in case of shortfall company shall have to pay customs duty along with interest on the unutilized imported material, if any, found during the process of regularization.
5. Even while the order in original in connection with show cause notice dated 24.10.2002 was pending in appeal before the appellate authority, for some strange reasons, the Adjudicating Officer issued fresh show cause notice dated 25.9.2006 on the same set of allegations concerning the same import licence containing identical allegations of non-fulfillment of export obligation by the petitioners. In such show cause notice also he called upon the petitioner to show cause as to why:-
“5. Now, therefore in exercise of the powers vested in me under Section 13 of the Foreign Trade (Development & Regulation) Act, 1992, I call upon the Noticee firm to show cause within period of 30 days from receipt of this notice as to why action should not be taken under Section 11(2) of the Foreign Trade (Development & Regulation) Act, 1992 to imposition of fiscal penalty on the Noticee firm and its directors. If they want to have personal hearing to explain their case they may appear before the Jt. Director General of Foreign Trade of this office on 30.10.06 at 3.p.m.”
6. It is the stand of the petitioners that since the first show cause notice was already adjudicated upon and appeal against the order in original was initially pending with appellate authority, and, thereafter, already allowed, the petitioners were not required to respond to the second show cause notice, which was issued under the same set of allegations. Despite such stand presented by the petitioners before the Adjudicating Authority, and despite the fact that by the time he proceeded further with adjudication of the second show cause notice, the Appellate Authority had already set aside his order imposing penalty on the petitioners in connection with the first show cause notice, the Adjudicating Authority passed a fresh order in original dated 17.7.2009 and this time around imposed penalty of Rs.38,20,500/- on the petitioners.
7. This order of the Adjudicating Authority the petitioners challenged before the Appellate Authority, who by his order dated 11.11.2011, dismissed the appeal.
8. Having heard learned counsel for the parties, and having noted facts as above, to our mind, the issue is rather simple. As already noted,the Adjudicating Authority issued first show cause notice and imposed certain penalty, which order came to be challenged before the Appellate Authority. The Appellate Authority allowed the appeal and remanded the proceedings for de novo consideration in light of certain observations made by him. Even before such appeal was decided, the Adjudicating Authority strangely and, to our mind, wholly unauthorizedly, issued fresh show cause notice on same set of allegations, facts and proposals. Even when his first order was quashed and he was asked to undertake de novo proceedings, ignoring such directions of the Appellate Authority, he proceeded to adjudicate the second show cause notice and imposed a penalty of more than 2½ times, which he had originally done.
9. To our mind, the entire procedure was totally irregular. When in connection with the first show cause notice the order-in-original was quashed by the Appellate Authority and proceedings were remanded for de novo consideration, it was the duty of the Adjudicating Authority to proceed to do so. If, in the mean time, however, erroneously, irregularly or legally impermissibly he had issued show cause notice, he had to abandon such notice proceedings. He, instead, proceeded to pass an order on the second show cause notice and abandoned the first proceedings, which were remanded by the Appellate Authority. The issue can be looked from a slightly different angle. Second show cause notice was issued even when the appeal filed by the petitioners against the order-in-
original passed pursuant to first show cause notice, was still pending. If the appeal was dismissed, would the Adjudicating Authority be authorized to thereafter proceed further with the second show cause notice and enhance the penalty, or if this time around, he was persuaded to drop the proceedings, delete the penalty he himself imposed in the first order,which he had imposed in the first round? Conversely, if the appeal was allowed in its entirety and the Appellate Authority, without a remand, had accepted the petitioner’s case on merits and quashed the penalty, could the Adjudicating Authority thereafter proceed with second show cause notice on the same set of allegations?. Answer to all these questions have to be in the negative.
10. Be that as it may, our case is far less complicated in law. The Adjudicating Authority, in our opinion, had to proceed in terms of the remand order passed by the Appellate Authority and not with the second show cause notice in which the petitioners refused to participate and rightly so, in our opinion.
11. In the result, the petition is allowed. Order dated 17.7.2009 passed by the Adjudicating Authority, as confirmed by the order dated 11.11.2011 of the Appellate Authority, is set aside. It is clarified that the Adjudicating Authority shall proceed further de novo in connection with the first show cause notice dated 24.10.2002 as provided and directed by the Appellate Authority in the first Appellate order dated 3.4.2007. The issue being old the petitioners shall cooperate with the early disposal of such proceedings. The Adjudicating Authority shall endeavour to dispose of the same expeditiously and preferably within 6(six) months from the date of receipt of the copy of this order. Petition is disposed of accordingly.
(Akil Kureshi, J.) (Ms. Sonia Gokani, J.) sudhir