The Madras High Court while striking down the notices said that the Joint Director General of Foreign Trade (DGFT) was not empowered to review his own orders.
The petitioner, M/s.Simplex Infrastructures Ltd. is an Export Promotion and Capital Goods (EPCG) license holder, who had imported various capital goods on a concessional rate of 5% of customs duty. The goods were utilized by the petitioner for the manufacture of various export items.
After fulfillment of the export obligation, the petitioner applied for the redemption of the EPCG license and in view of the fulfillment obligation, the respondent authority, Joint DGFT had granted the Export Obligation Discharge Certificate (EOD) on various dates for each of the eight applications.
After the lapse of many years from the EOD certificate, the present impugned notices have been sent, seeking to regularise the case and recover the customs duty along with interest.
The petitioner raised two grounds challenging the impugned notices.
Firstly, the Joint DGFT has no jurisdiction to review his own order, in the absence of any explicit provision under the statute. Even otherwise, Section 16 of the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act) empowers the Director-General of Foreign Trade to review the orders made by the Joint Director General of Foreign Trade and as such, the impugned notices by the Joint DGFT is without any authority of law.
Secondly, the petitioner submitted that the impugned notices have been issued after about 10 years from the issuance of the EOD Certificate which is contrary to the limitation prescribed under the proviso to Section 16 of the Act, which prescribes a period of two years for such a power to review.
The Single Judge bench of Justice M.S. Ramesh while quashing the notices issued by the Joint DGFT said that as and when the Joint DGFT had issued the EPCG license and the Export Obligation Discharge Certificate, he becomes “functus officio” and if at all, such an order is to be reviewed, the same can be done only by the Director-General, as provided under Section 16.
The court while commenting on the limitation period of the notices said that the notices are after a long delay between 8 to 10 years and there is absolutely no explanation for this inordinate delay in the proposal to review the order. Therefore, the court quashed the impugned notices.Subscribe Taxscan AdFree to view the Judgment