The Supreme Court issued notice on the application seeking condonation of delay and the Special Leave Petition filed by the Customs Department with respect to the Customs Export Promotion Capital Goods ( EPCG ) License.
In view of the decision of the Supreme Court in Sheshank Sea Foods Pvt. Ltd., Karnataka vs. Union of India & Ors reported in (1996), a division bench consisting of Justice Kapil Tandon and Justice Nidhi Wason has issued a notice regarding application seeking condonation of delay as well as on the Special Leave Petition.
The back ground facts according to the Karnataka High Court Decision is that, the company (appellant in HC and Respondent in this Supreme Court SLP), M/s. Kalinga Commercial Corporation is a proprietorship firm engaged in the mining activities for the Odisha Mining Corporation Ltd. a Government owned corporation. During the relevant period i.e., from September 2005 to May 2008, appellant entered into mining contracts with OMC for raising iron ore at three mines belonging to the OMC in the State of Orissa namely, Kurmitar Iron Ore Mines, Khandadhar; Gandhamardhan Iron Ore Mines, Keonjhar; and Daitari Iron Ore Mines, Keonjhar. For the purpose of raising iron ore, OMC gave the possession of the mines to the appellant. Appellant was required to install the machinery and other equipment out of its own funds for raising/ excavation of iron ore and processing the same.
Pursuant to the complaint received from the DRI, the Deputy DGFT Patna issued a show cause notice dated July 10, 2008 to appellant proposing to cancel nine EPCG licenses already issued and place the appellant under Denied Entity List. Similarly, show cause notice dated August 05, 2008 was issued by the Deputy DGFT Cuttack proposing to cancel three EPCG licenses
Thereafter, the DRI, Kolkata Zonal unit issued a show cause notice proposing to recover the amount of duty saved at the time of import of Capital Goods, along with interest and penalty. While adjudicating the show cause notices, the Deputy DGFT Patna issued a Blacklisting Order refusing to grant and renew further licenses to appellant or its proprietor.
The Deputy DGFT Cuttack further issued a ‘Refusal of License’ order, refusing to issue any license to appellant and its proprietor. Appellant preferred an appeal against the Refusal of License order and the Blacklisting order before the ADGFT, New Delhi. The ADGFT allowed the appellant’s appeal and set-aside the order. The said order was not challenged by the Revenue and has thus attained finality. Appellant filed its reply to show cause notice dated 08.05.2009 issued by the ADG & DRI10, Kolkata Zonal Unit before the CoC, Bangalore.
The Karnataka High Court found that the appellant was engaged in the mining activities. It uses capital goods imported under the EPCG License. Appellant was granted permission by OMC to carry out its mining activities.
Thus, the apex court has issued a notice regarding application seeking condonation of delay as well as on the Special Leave Petition.
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