Embio Limited Vs Director General of Foreign Trade & Ors. (Supreme Court of India)
In the case of Emmio Limited vs. Director General of Foreign Trade & Ors., the Supreme Court of India addressed the imposition of a penalty under Section 11(2) of the Foreign Trade (Development and Regulation) Act, 1992 (FT Act) on the appellant, formerly known as Emmellen Biotech Pharmaceuticals Limited.
The appellant had challenged a penalty of Rs. 23,38,882 imposed under Section 11(2) of the FT Act through a Writ Petition under Article 226 of the Constitution before the Karnataka High Court. This Writ Petition was dismissed, and a subsequent Writ Appeal against the dismissal was also unsuccessful.
The case involved Karnataka Malladi Biotics Limited (hereafter, Karnataka Biotics), which obtained an Export Promotion Capital Goods Licence allowing it to import capital equipment at a concessional customs duty rate. The license required Karnataka Biotics to export finished goods worth a specified amount in a convertible foreign currency within five years. However, Karnataka Biotics was declared a sick unit under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), and a demand notice was issued for the differential customs duty due to non-compliance with export obligations. The demand was partially recovered through the enforcement of a bank guarantee.
