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Date: 11.03.2026
Madras High Court Quashes DGFT Orders for Violation of Natural Justice in EPCG Authorization
This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email idย intelconsul@gmail.com or on his Mobile +91-9999005379.
The High Court of Madras recently delivered a significant judgment in Writ Petition No. โ 14818 of 2025, filed by M/s. โ Integrated CNC Technologies Pvt. โ Ltd., represented by its director. โ The case revolved around the alleged non-fulfillment of export obligations under the Export Promotion Capital Goods (EPCG) scheme and the subsequent imposition of penalties by the Directorate General of Foreign Trade (DGFT). โ
Background of the Case
M/s. Integrated CNC Technologies Pvt. โ Ltd., a company engaged in manufacturing machine parts for automobiles and engineering industries, had obtained two EPCG authorizations on February 27, 2008, and June 27, 2008. โ These authorizations allowed the company to import capital goods at concessional duty rates under the EPCG scheme, with a corresponding export obligation of USD 217,461.36 and USD 148,200, respectively. โ
The petitioner faced challenges in submitting the required documents to evidence the fulfillment of export obligations. โ This led to the issuance of a show-cause notice on May 30, 2019, by the DGFT regarding the authorization dated June 27, 2008. โ The petitioner responded to the notice on March 11, 2020, submitting documentary proof of export obligation completion. โ
However, on August 24, 2021, the Deputy Director General of Foreign Trade imposed a penalty of โน50,00,000 on the petitioner for non-fulfillment of export obligations under the authorization dated February 27, 2008. โ The petitioner claimed that they had not received any show-cause notice or intimation of a personal hearing before the order was passed. โ
Previous Court Proceedings โ
The petitioner challenged the penalty order in W.P. โ No. 22703 of 2021 before the High Court of Madras. โ On June 24, 2024, the Court allowed the writ petition and directed the adjudicating authority to issue a fresh show-cause notice and provide the petitioner with an opportunity for a personal hearing before passing any orders. โ
Current Case Details
Despite submitting relevant documents on September 25, 2024, to evidence the completion of export obligations, the petitioner was informed that the Joint Director General of Foreign Trade had already passed an order on August 21, 2024. โ This order imposed a penalty of โน1,00,000 and demanded customs duty for the unfulfilled export obligations. โ The petitioner claimed that the order was not served to them and was only uploaded on the DGFT website. โ
The petitioner filed an appeal against the order before the Appellate Authority and Zonal Additional Director General of Foreign Trade. โ However, the appeal was dismissed on January 21, 2025, on the grounds of being time-barred. โ Subsequently, the petitioner approached the High Court of Madras, challenging both the original order and the appellate order. โ
Courtโs Observations and Judgment
The petitioner argued that they were not given proper notice or an opportunity for a personal hearing, as all communications were uploaded only on the DGFT website. โ The respondents, represented by the Additional Solicitor General, contended that the documents were sent to the email ID provided by the petitioner at the time of obtaining the license, which was accessible to the petitioner. โ
After hearing both parties, the Court quashed the impugned orders and remitted the matter back to the Joint Director General of Foreign Trade with specific directions:
- The petitioner must appear before the Joint Director General of Foreign Trade at 11:30 AM on February 23, 2026, for a personal hearing and submission of relevant documents. โ
- If the petitioner fails to appear on the specified date, no further opportunity for a hearing will be provided, and the impugned order will stand revived. โ
Conclusion
The judgment underscores the importance of procedural fairness and the right to a personal hearing in adjudicatory proceedings. โ By remitting the matter back to the adjudicating authority, the High Court has ensured that the petitioner is given a fair opportunity to present their case and submit evidence of compliance with export obligations. โ
This case serves as a reminder to businesses to maintain updated contact information with regulatory authorities and to monitor official communications closely. It also highlights the judiciary’s role in safeguarding the principles of natural justice and ensuring that administrative actions are conducted in a fair and transparent manner. โ
Source: Madras High Court
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