R.N.J. Exports Pvt. Ltd. vs Union Of India (Uoi) And Ors. on 20 July 2006

Delhi High Court
R.N.J. Exports Pvt. Ltd. vs Union Of India (Uoi) And Ors. on 20 July, 2006
Equivalent citations: 2006(204)ELT209(DEL)
Author: Anil Kumar
Bench: Anil Kumar
JUDGMENT

Anil Kumar, J.

Page 2738

1. Rule.

2. With the consent of the parties, the matter is taken up for final disposal.

3. The petitioner has sought issuance of writ of certiorari quashing direction contained in the letter dated 26th May, 2006 directing the petitioner to furnish a bank guarantee of Rs. 30.00 lakh as pre condition for hearing of his appeal.

4. The petitioner contended that he was granted license to import and he had to meet the export obligation. The value based advance license for a CIF value of Rs. 45,31,250/- was for import of ball pen tips, writing ink and polyethylene moulding power etc. with a condition to export 15 lakh pieces of plastic body ball pens and parts thereof including refills for FOB value of US$2,32,000/- to Singapore.

5. On non-fulfilling the export obligation, the adjudicating authority imposed a penalty of Rs. 2.00 crore on the petitioner.

6. On an appeal filed by the petitioner, the appellate committee remanded the matter to the Additional Director General of Foreign Trade for giving a fresh hearing and also directed the petitioner to deposit 10% of the penalty amount by cash or by furnishing a bank guarantee.

7. Against the order directing the petitioner firm to deposit 10% of the penalty amount, a writ petition was filed in the High Court and the concerned authority was directed to hear the matter without insisting for deposit of the penalty amount.

8. After hearing the petitioner, the adjudicating authority again inferred that as per the condition of the license, the appellant firm was to make export to Singapore and receive the export proceeds in convertible currency, however, the exports had been made to Russia and proceeds were received in Indian rupees and, therefore, the exports made by the petitioner were not considered in fulfilllment of the export obligation and it was held that there was no fulfilllment of export obligation and, therefore, the adjudication authority by order dated 8th June, 1995 reiterated the penalty of Rs. 2.00 crore levied on the petitioner firm.

9. Against the order dated 31st October/2nd November, 2005, the petitioner filed an appeal and on examination of the appeal and the application for waiver of pre deposit, the appellate committee on the question of allowing waiver of pre-deposit of penalty amount directed the petitioner to furnish a bank guarantee of Rs. 30.00 lakhs.

10. The petitioner was also directed to appear on 2nd March, 2006 in case the petitioner was not agreeable to furnish a bank guarantee of Rs. 30.00 as a condition for pre-deposit of penalty amount.

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11. The petitioner contended that on 2nd March, 2006, he could not reach for hearing on account of visit of President of United States of America, Mr. Bush, as he was scheduled to have a meeting at Hyderbad House near India Gate and for security reasons the entire area inclusive of office of the respondents was cordoned off.

12. Consequently, the petitioner received another communication dated 18th April, 2006 fixing the hearing for 18th May, 2006 at 10.30 AM in Room No. 141, Udyog Bhawan, New Delhi for hearing the petitioner on the question of pre- deposit and categorically stipulating that no further hearing will be given for that purpose.

13. The petitioner counsel contended that on receiving the letter dated 18th April, 2006, he got another brief for 16th May, 2006 at Chennai as the petitioner’s case was directed to be listed on 18th May, 2006. Subsequently, another communication dated 1st May, 2006 was received from the respondents pre-poning the date of hearing from 18th May, 2006 to 16th May, 2006 for hearing on the question of waiver of pre-deposit which was received by the petitioner on 5th May, 2006.

14. As the counsel for the petitioner had already got other matters for 16th May, 2006, as earlier the matter was fixed for 18th may, 2006, therefore, a request was made to the respondents for adjournment of the matter on 16th may, 2006 as the counsel for the petitioner had already accepted a brief at Chennai on that date and he was not available at New Delhi.

15. The averment of the petitioner is that his counsel received a telephonic call from the office of Under Secretary of the appellate committee agreeing not to take up the matter on 16th May, 2006 and, consequently, the petitioner counsel sent a letter dated 11th May, 2006 which was delivered personally in the office of the appellate committee on 12th May, 2006. Thereafter, instead of adjourning the matter on 16th May, 2006, petitioner received another letter dated 26th May, 2006 communicating that application of the petitioner for waiver of pre-deposit of penalty amount was considered and it has been decided to direct the petitioner to furnish a bank guarantee of Rs. 30.00 lakh?and, thereafter, by another communicated, petitioner has been intimated that the date of hearing for appeal has been fixed on 21st July, 2006.

16. Aggrieved by the order of the respondents in not giving hearing to the petitioner and again imposing the condition of pre deposit of furnishing bank guarantee of Rs. 30 lakh, the petitioner has impugned the order contending that the respondents have violated the principles of natural justice and their order is liable to be set aside and the petitioner is entitled for hearing before the respondents impose any condition of pre deposit in the facts and circumstances.

17. The petitioner has impugned the order directing the petitioner to furnish the bank guarantee of Rs. 30 lakhs without giving a hearing to the petitioner contending, inter alia, that the matter was listed on 18th May, 2006 which was preponed to 16th May, 2006 which was not suitable as the counsel for Page 2740 the petitioner had already accepted a brief at Chennai for that day and, therefore, a request had been made and on telephonic affirmation of the request of the petitioner, the communication dated 11th May, 2006 was also delivered to the respondents about adjourning the hearing on 16th May,2006 and giving a reasonable hearing to the petitioner before passing any order on pre deposit against the petitioner. It was contended that demanding furnishing of bank guarantee is not permissible as it is done in routine in almost all the cases and especially in the present case as the respondents themselves had directed the respondent for a hearing in case the petitioner was not agreeable to condition of furnishing the bank guarantee of Rs. 30.00 lakh.

18. The petitioner has relied upon 1987 (28) E.L.T. 61 (Delhi) Uprtron Powertronics v. Collector of Central Excise, where a Division Bench had held that refusal to inquire into the prima facie nature of the case is totally incorrect and non-inquiry into financial difficulties of the petitioner is not justifiable before ordering pre deposit of amounts involved.

19. Per contra, the learned senior counsel, Mr.Rajeev Shakdhar for the respondents, had contended that though the appeal is listed for hearing on 21st July, 2006 before the appellate committee, subject to furnishing a bank guarantee of Rs. 30.00 lakh by the petitioner, however, considering the facts and circumstances and especially that a hearing had to be given to the petitioner, without going into justifiability whether the condition demanding furnishing of a bank guarantee of Rs. 30.00 is justifiable or not, the respondents will give hearing to the petitioner on the question of waiver of pre-deposit of any amount or furnishing of bank guarantee before deciding the appeal.

20. Learned counsel for respondent also relied on (2000) 9 SCC 399 Alpha Detergents Pvt. Ltd. v. Commissioner of Central Excise and Anr., to justify imposition of any amount and seeking furnishing of Bank Guarantee.

21. In totality of facts and circumstances between the parties and admitted facts, it is not disputed that the appellate committee examined the question of waiver of pre-deposit of penalty amount without hearing the petitioner and directed the petitioner to furnish a bank guarantee of Rs. 30.00 and at the same time also allowed petitioner to appear in order to hear him and decided whether petitioner is liable for any pre-deposit amount and/or to furnish bank guarantee and fixed the date for that purpose.

22. Somehow, the petitioner has not been given hearing as was directed by the appellate committee itself. On 2nd March, 2006, the hearing could not take place on account of cordoning off the entire area surrounding the office of the respondents as has been contended by the petitioner and thereafter on account of pre-ponement of the date from 18th may, 2006 to 16th May, 2006. The petitioner contentions is that a request for postponement of hearing was made for 16th May,2006 as his counsel had already accepted another brief at Chennai and so request was made which was accepted, as a telephonic Page 2741 call was received from the office of Under Secretary and pursuant to which the petitioner had written a letter and delivered to the respondents on 12th May, 2006. The letter dated 11th May, 2006 has not been replied by the respondents.

23. The inevitable inference in the facts and circumstances is that the petitioner has been denied a hearing regarding pre deposit and denial of the hearing to the petitioner is also on account factors imputable to the respondents. The petitioner also can not be held responsible solely for not availing the hearing on the question of waiver of pre deposit from the respondents. If that be so the respondents can not absolve themselves of their liability to give a reasonable hearing to the petitioners before directing him to make a pre deposit or to furnish a bank guarantee.

24. Considering the facts, therefore, it will be reasonable to allow the petitioner a hearing before petitioner can be asked to give a bank guarantee of Rs. 30.00 lakh as has been sought by the respondents.

25. Today, learned Counsel for the respondents also stated on instructions that the second appellate authority will give a hearing to the petitioner on his application for waiver of pre-deposit before hearing the appeal of the petitioner and before demanding petitioner to furnish a bank guarantee for Rs. 30 lakhs.

26. Therefore for the reasons stated hereinabove, the writ petition is allowed to the extent that the communications dated 26th May, 2006 and 26th June, 2006 directing the petitioner to furnish a bank guarantee of Rs. 30.00 lakh without giving the petitioner a hearing about such a condition, is set aside.

27. The respondents will give a hearing to the petitioner regarding his plea of waiver of pre deposit and after giving hearing will decide whether the petitioner is entitled for waiver from pre deposit and will decide the appeal thereafter, in accordance with law and rules and regulations.

28. Consequently, the petitioner shall be granted a hearing on his application for waiver of pre-deposit before the decision on the appeal of the petitioner. The writ petition is disposed of with these direction and in the facts and circumstances, the parties are left to bear their own cost.