ORDER
Mr. N.K. Sud, J.
1. The petitioner – M/s. PML Industries Ltd. is a public limited company and is engaged in the business of manufacture of boneless buffalo meat at village Behra, Derabassi, Punjab. It imported/procured capital goods worth Rs. 27.12 crores without payment of custom duty/excise duty after obtaining the letter of permission dated 8.12.1992 for implementation of its 100% Export Oriented Unit (EOU). It came to the notice of the Excise Department that the petitioner had entered into an agreement with one M/s. Agricom Foods (P) Ltd., Mumbai allowing it to carry out the entire manufacturing with their own staff against a payment at the rate of Rs. 6/- per kg. of the total production. According to the department this was an infringement of the conditions on which the permission had been granted to the petitioner to import/procure the capital goods without payment of custom duty/excise duty. It, therefore, passed a restraint order on 7.7.1999 requiring the petitioner to show cause as to why the capital goods may not be confiscated under the provisions of Section 111(O) of the Customs Act, 1962 (for short ‘the Act’). The petitioners were also directed not to remove, part with or otherwise deal with the aforesaid capital goods without prior permission of the department. It is against this notice that the present writ petition has been filed.
2. Shri M. L. Sarin, learned Senior counsel for the petitioner strongly contended that there has been no infringement of the conditions on which the permission was granted for the manufacture of boneless buffalo meat as per letter dated 8.12.1992 (Annexure P-1 with the writ petition). According to him the only obligation of the petitioner was that the entire production had to be exported and it was not necessary that the export should be made by the petitioner itself directly. For this purpose, he relied upon the definition of the term Third Party Export as contained in Export and Import Policy, 1997-2002 as amended upto 7.4.1999 to show that the petitioner could even export the production indirectly through a third party as was being done in the present case. He furnished statistical information to prove that the petitioner had sold the entire production to M/s. Allana Sons Ltd. which in turn had exported the same outside the country. It was further contended that the department was not competent to issue a restraint order as the matter was still in the investigation stage and unless a firm conclusion was reached, the petitioner could not be restrained from carrying on its business. It was also urged that even if the allegations as made by the department were to be accepted on their face value, the petitioner could at best be asked to pay the custom duty/excise duty but it could not be restrained from dealing with its capital goods or carrying on the manufacturing activities. He further alleged that due to the restraint order an irreparable damage was likely to be caused to the petitioner as the goods manufactured by the petitioner, being perishable, were likely to decay. This, according to the petitioner, would result in loss not only to it but also to the country which in the process would lose the precious foreign exchange.
3. In response to the notice issued, the department has filed written statement in which the charges contained in the restraint order have been reiterated. It has been pointed out that the petitioner had entered into agreements with M/s. Agricom Foods Private Ltd., M/s. Allana Investment and Trading Company Ltd. and M/s. Frigerio Conserva Allana Ltd. by virtue of which the entire unit had almost been handed over to these concerns for operation. In consideration of the above arrangement the petitioner was charging Rs. 6/- per kg. on the entire production from the said parties. This, according to the respondents, was not permissible and was in violation of the conditions on which the permission was granted to the petitioner for starting 100% EOU.
4. Shri Rajesh Gumber, the learned counsel for the respondents stated that even the instances given in the statistical information supplied by the petitioner did not fall within the definition of Third Party Export which required the name of the manufacturer to be specified in the bill. Developing this argument further, he drew our attention to the bill against one of the transaction in which the name of the manufacturer was mentioned as M/s. Frigorifico Allana Ltd. Thus, according to the respondents, the argument of the petitioner that it was engaged in third party export was without any merit. Counsel for the respondents did not seriously object to the petitioner being permitted to sell the goods already manufactured and lying in its premises but his apprehension was that the petitioner was likely to misuse such a permission to continue to manufacture the goods illegally as done by it in the past in defiance of the restraint order. He also controverted the argument of the petitioner that the only consequence of infringement of the conditions of the letter of permission was the liability to pay custom duty/excise duty. He drew our attention to the provisions of Section 111 of the Act which permitted the confiscation of the goods as well. Lastly, it was contended by the learned counsel for the department that the investigation in the matter had reached an advanced stage and a final decision in the matter was likely to be taken shortly.
5. We have heard counsel for the parties and have perused the records. We are of the view that since the matter is being investigated and the department has yet to come to a final conclusion, it will not be appropriate for us at this stage to express any opinion on the merits of the contentions advanced by either of the parties. In the circumstances of the case, we are of the view that it would be in the interest of justice to direct the department to conclude the investigation and pass a final order in the proceedings initiated under section 111(O) of the Act. We, therefore, direct the department to pass a final order as expeditiously as possible but not later than 31.10.1999 and till then the restraint order passed under section 110 of the Act will continue to operate. We, however, make it clear that if the final order is not passed within the aforesaid period, the operation of the restraint order will be deemed to have been stayed. Since the manufactured boneless buffalo meat has a limited shelf life and is a perishable commodity, we further direct respondent No. 2 to depute a senior officer of the department to prepare an inventory of the meat already manufactured in the presence of the representatives of the petitioner-company latest by 1.10.1999 and allow the latter to export the same in accordance with law.
6. The writ petition stands disposed of as above. No costs. Copy of the order be supplied (to) dasti on payment of usual charges.