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Amco Metal Industries v/s Additional Commissioner of Central Excise & Others

    REVIEW PETITION NO.49 OF 2007, WRIT PETITION NO.777 OF 2007

    Decided On, 31 January 2008

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE CHIEF JUSTICE MR. SWATANTER KUMAR & THE HONOURABLE MR. JUSTICE J.P. DEVADHAR

    For the Appellant : Mathew Nedumpara, Advocate. For the Respondents: S.V. Bharucha, R.C. Mater Advocates.



Judgment Text

Oral Order (J.P. Devadhar, J.)


Heard learned counsel for both the parties. Rule. Rule made returnable forthwith. By consent of the parties, taken up for final hearing.


2. This review petition is directed against the Judgment and Order dated 2nd August, 2007, whereby Writ Petition No.777 of 2007 filed by the petitioner was dismissed on the ground that the petitioner has adequate alternate remedy of appeal. As the bench which passed the impugned order has directed that the review petition be not placed before the Bench consisting of Rebello, J., this review petition is placed before us.


3. The writ petition was filed basically to challenge the order-in-original dated 6th February, 2004 passed by the Additional Commissioner of Central Excise, Bombay-1 imposing penalty of Rs.2 crores on the ground that the petitioner has violated the provisions of Foreign Exchange Regulation Act, 1973 (repealed Act) read with the relevant provisions of the Foreign Exchange Management Act, 1999.


4. By the impugned Judgment and Order dated 2nd August, 2007, this Court declined to entertain the Writ Petition solely on the ground that the petitioner had alternate efficacious remedy of filing an appeal before the Appellate Tribunal for Foreign Exchange.


5. Mr. Mathew, learned counsel appearing on behalf of the petitioner submitted that the impugned order has been passed without hearing the petitioner in breach of the principles of natural justice. He submitted that where the fundamental rights are infringed and where the order impugned in the Writ Petition is a nullity, existence of an alternate remedy is no bar for entertaining a Writ Petition. He placed strong reliance on the decision of the Delhi High Court dated 12-4-2004 in Writ Petition (Civil) No.7403 of 2003 in this respect.


6. Mr. Mathew further submitted that the adjudication proceedings were a nullity in law because it was passed following the procedure under the Foreign Exchange Regulation Act, 1973 (FERA) which stood repealed with effect from 30-5-2000. The saving clause under section 49 of the Foreign Exchange Management Act, 2000 (FEMA), the repealing Act, in no way liberates the said position. He submitted that the adjudication order is also a nullity because, admittedly the said order was passed without serving a show cause notice to the petitioner. He submitted that no offence was committed under FERA and consequently no penalty could be levied upon the petitioner.


7. In the written submissions, Mr. Mathew referring to the decisions of the Apex Court in the case of Rashid Ahmed Vs. Municipal Board (A.I.R. 1950 S.C. 163), Harbanslal Vs. Indian Oil Corporation (2003 (2) SCC 107), State of H.P. Vs. Gujarat Ambuja Cement Ltd. (2005 (6) SCC 499) and various other decisions submitted that where the constitutional validity of a provision are challenged, where the fundamental rights of a citizen are violated and where the impugned order is a nullity, the High Court is empowered to issue a writ irrespective of the existence of an alternate remedy.


8. We are not impressed by the arguments advanced on behalf of the petitioner. By the impugned order, the Division Bench of this Court has declined to exercise the writ jurisdiction and directed the petitioner to avail the alternate remedy of appeal. No doubt, that the Court in a given case is empowered to grant a writ irrespective of the existence of an alternate remedy. In such a case, whether to grant relief or not is in the discretion of the Court. In the present case, it is not in dispute that against the order in original dated 6-2-2004, statutory remedy of appeal was available under FEMA. Therefore, where the Court in its discretion declines to exercise the power to issue a writ, the question of reviewing the said order by the same Court does not arise at all. If at all the petitioner is aggrieved by the discretion exercised by the Court, the remedy is to challenge the said order and not to seek review of the said order.


9. The grievance of the petitioner that the Bench which passed the impugned order to which one of us was a party (J.P. Devadhar, J.) had no patience to hear the petitioner is totally incorrect. The learned counsel for the petitioner was extensively heard in the matter. His main argument was that the remedy of appeal was not efficacious and the said argument was rejected by the Court. During the course of argument, the issue relating to the constitutional validity of the first proviso to section 19(1) of FEMA, which requires any person appealing against the order of adjudicating authority to deposit the amount of penalty while filing the appeal was not canvassed. It is only by way of written submission the validity of the first proviso to section 19(1) is challenged. In any event, the said issue is not res integra. The Apex Court in the case of Gujarat Agro Industries Co.Ltd. Vs. Municipal Corporation reported in 1999 (4) SCC 468 while considering a similar provision contained in Section 406(2)(e) of the Bombay Provincial Municipal Corporation Act, 1949, held that the right to appeal being a statutory right, it is for the legislature to decide whether to make the right subject to any condition or not. The Apex Court further held that any challenge to the constitutional validity of a provision for predeposit before entertaining an appeal on the ground that onerous conditions have been imposed and right to appeal has become illusory must be negatived and such a provision cannot be said to be ultra vires Article 14 of the Constitution. Therefore, the challenge to the validity of the first proviso to Section 19(1) of FEMA and the challenge to Rule 10 of the FEMA Adjudication Proceedings and Appeal Rules, 2000 do not merit any consideration in the present case.


10. The argument as to whether the impugned order in original dated 6-2-2004 is a nullity or not can be agitated before the appellate authority. Similarly, the argument that the petitioner has not violated the provisions of FERA and penalty could not be levied under the repealed Act can also be agitated before the Appellate Authority. As regards the predeposit is concerned, the second proviso to section 19(1) of FEMA specifically empowers the Appellate Authority to dispense with the predeposit if a case was made out. Similarly, the argument that the adjudication order has been passed without serving a show cause notice is also without any merit, because from the order in original dated 6-2-2004 it is seen that a

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show cause notice dated 16-5-2002 was issued at the same address which is set out in the Writ Petition. It is further recorded in the order in original that as no reply was received to the show cause notice, the officers of the department went to the above address and found that the petitioner was not in existence. In such a case, the question as to whether the show cause notice was properly served or not could be agitated before the appellate authority and not by filing a Review Petition. 11. In this view of the matter, in our opinion, no case is made out for Review of the order passed in the Writ Petition on 2-8-2007. 12. Accordingly, the Review Petition is dismissed with no order as to costs.
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