M/S. TAARIKA EXPORTS AND ANR. versus UNION OF INDIA AND ANR.

Citation: [2007] 6 S.C.R. 94 · Decided: 07-05-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

A 
MIS. TAARIKA EXPORTS AND ANR. 
v. 
UNION OF INDIA AND ANR. 
MAY 7, 2007 
B 
[DR. ARIJITPASAYAT AND D.K. JAIN,JJ.] 
Import and Exports (Control) Act, 1947-S 4-I(l) Liability of penalty--
Issuance of advance licence for import free of customs duty-Non-compliance 
of export obligation under the licence as well as mis-utilization of goods-
C Imposition of penalty-Correctness of-Held: There was infractions of 
conditions imposed under the licence-Also plea that conditions were 
uncapable of compliance were at variance, as such liable to pay penalty-
Thus, order of Authorities below and the High Court calls for no interference--
However, considering the value of articles, penalty reduced from Rs. 45 lakhs 
nto Rs. 20 Lakhs-Import (Control) Order, 1955-Clause 8-Foreign Trade 
(Development and Regulation) Act, 1992-s. 20(2). 
Appellants, engaged in export and import activities, were issued advance 
·licence for import of certain goods free of customs duty. It was alleged that 
the appellants used the license in full for the import of raw materials 
E thereunder free of customs duty but only part of the finished goods under the 
said licence was exported. They were issued show cause notice proposing 
imposition of fiscal penalty for non-fulfillent of export obligation under the 
licence as well as for mis-utilization of the goods imported under the licence. 
Adjudicating Authority imposed penalty for shortfall in export obligation. 
F Appellate Committee upheld the order of the Authority. Single Judge of High 
Court also upheld the orders of the Adjudicating Authority as well as the 
Appellate Committee. Letters Patent of Appeal was also dismissed. Hence the 
present appeal. 
Appellant contended that the allegation related to a technical non-
G compliance of an export obligation and that such a compliance cannot be 
expected and demanded as the same was impossible to be done on the basis of 
quantity of raw materials that the appellants were allowed to import under 
the concerned licence. 
H 
Respondent-Union oflndia contended that the Authorities below and the 
94 
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TAARIKAEXPORTSv. U.0.1. [PASAYAT,J.] 
95 
l 
High Court have clearly noted the infractions and the penalty imposed was A 
within the permissible limit ofs. 41(1) of the Import and Exports (Control) 
Act, 1947 read with s. 20(2) of the Foreign Trade Act. 
Disposing of the appeal, the Court 
HELD: 1.1. The Authorities analysed the factual position in detail and B 
have concluded that there was infractions of the conditions imposed under 
the licence. It is to be noted that before Single Judge of High Court a plea 
was taken that the goods are still lying with the appellants. There was no 
-
.... 
question of the appellants having used or utilized them in violation of the 
conditions imported by the licence. The Single Judge of High Court noted c 
that no such plea was taken by the party earlier. Neither in the reply to the 
show cause notice nor before the Appellate Committee such a plea had been 
taken. Before this Court also an attempt was made to submit that the goods 
are lying in stock and, therefore, there was no question of utilization. No 
material in this regard is produced before the authorities as was rightly 
observed by the Single Judge. [Para 91 (100-A-CJ 
D 
1.2. The stand that the conditions were incapable of compliance seems 
. _. 
to be at variance with the stand taken earlier. Therefore, the plea that the 
conditions were incapable of compliance has been rightly turned down by the 
authorities and the High Court. (Para 111 [100-E-G] 
E 
1.3 Considering the value of the articles involved, penalty of Rs.20 lakhs 
instead of Rs.45 lakhs would meet the ends of justice. [Para 131 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2378 of2007. 
From the Final Judgment and Order dated 27.04.2005 of the High Court F 
of Delhi at New Delhi in LP.A. No. 605 of2003. 
Uday U. Lalit, Devyani Ashra Nanda and Raj iv Nanda for the Appellants. 
Gopal Subramanium, ASG., T.S. Murthy, Navin Prakash and V.K. Verma 
for the Respondents. 
G 
The Judgment of the Court was delivered by 
DR. ARIJIT PASAYAT, J. I. Leave granted . 
•. , 
2. Challenge in this appeal is to the order passed by a Division Bench H 
96 
SUPREME COURT REPORTS 
[2007] 6 S.C.R. 
r 
A of the Delhi High Court dismissing the Letters Patent Appeal filed against the 
order of a learned Single Judge. 
3. Background facts in a nutshell are as follows: 
4. A show cause notice was issued to the appellants u

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