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2019 (4) TMI 87 - GUJARAT HIGH COURTAdvance Authorisation Scheme - Export Promotion Schemes - transfer of Authorisation from the old unit to the new IEC - automatic extension of the export obligation period after amalgamation of the company - existence of company to which the original Authorisation was issued - fulfillment of export obligation after amalgamation Policy Relaxation Committee concluded that the merger with the new company had taken place after the expiry of export obligation period, namely, (i) the IEC number of M/s Lubi Submersible Ltd. had been surrendered on 14.3.2013; (ii) during this period of 36 months, the petitioner could discharge only 7.78% export obligation; (iii) The petitioner would not be able to file shipping bills in the new IEC for old Authorisations due to limitation of system software at ICEGATE Customs; and (iv) Extension beyond 48 months is not considered and that period has lapsed in March, 2014. In view of the above, the petitioner was asked to get its case regularised in terms of Para 4.49 of the Handbook of Procedures, 2015-2020. petitioner made another application dated 30.11.2016 to the Policy Relaxation Committee to re-consider its decision which also not resulted in any relief and was rejected vide order dated 14.5.2018 Held that:- A perusal of the order dated 14.5.2018 of the Appellate Committee shows that the Policy Relaxation Committee had called upon the Regional Authority to explain why the amendment was not allowed when the High Court had allowed amalgamation of the two companies. It was stated that the merger took place after the expiry of the export obligation period and the IEC number of M/s Lubi Submersibles was surrendered on 14.3.2013. In the opinion of this court, the grounds of rejection as stated in the impugned order do not appear to be germane. Paragraph 4.22 of the Hand Book of Procedures, 2009-14 provides that the fulfillment period of export obligation under an Advance Authorisation shall commence from the authorisation issue date, unless otherwise specified and further provides that the export obligation shall be fulfilled within thirty six months except in the case of the categories specified therein. The paragraph further provides that in case of inputs mentioned in Appendix 30A, the export obligation period be specified against each entry therein and facility of extension of export obligation period shall not be permitted in case of Advance Authorisation issued for these inputs and that the Regional Authority shall make endorsement in the Advance Authorisation to that effect. While it is true that an Advance Authorisation is non-transferable, it would mean that it cannot be transferred from one entity to another. But in this case, upon M/s Lubi Submersibles having been amalgamated with M/s Arvind Iron Pvt. Ltd., M/s Lubi Submersibles lost its identity and ceased to carry on business, and therefore, the question of fulfillment of the export obligation thereafter by Ms. Lubi Submersibles would not arise - the obligation to fulfill the export obligation of the Transferor Company viz. M/s Lubi Submersibles was on the transferee Company, namely, M/s Arvind Iron Pvt. Ltd. which was soon thereafter converted to M/s Lubi Industries Pvt. Ltd. and then to M/s Lubi Industries LLP. The respondents seek to take action against the petitioner M/s Lubi Industries LLP in respect of non-fulfillment of the export obligation of M/s Lubi Submersibles but refuse to transfer the Advance Authorisations of the Transferor Company to the IEC of the Transferee Company on the specious plea that there is no provision for transfer of Advance Authorisation. In this case, since by virtue of the order of amalgamation, the Advance Authorisations also stand vested in the petitioner M/s Lubi Industries LLP, it is not as if the Advance Authorisation is being transferred to another person, but it is the person whom the respondents seek to hold liable to fulfill the export obligation who is seeking transfer of Advance Authorisation to its IEC number so as to enable it to fulfill the export obligation of M/s Lubi Submersibles. It cannot be gainsaid that in view of the fact that M/s Lubi Submersibles ceased to exist upon its amalgamation with M/s Arvind Iron Pvt. Ltd., the question of M/s Lubi Submersibles fulfilling the export obligation would not arise and it is only the Transferee Company which can fulfill the export obligation. On account of the applications being rejected on the ground that there is no provision for transfer, the petitioner could not show any exports against the Advance Authorisations in questions despite having been engaged in the business of export all throughout that period. Thereafter, the petitioner once again applied before the Policy Review Committee, both, for transfer of Advance Authorisation, as well as for extension of export obligation period - it is apparent that the Appellate Committee has not applied its mind to the controversy in issue and has merely placed reliance upon the orders passed by the subordinate authorities, without taking into consideration the fact that it was these very orders which had given rise to the review appeal. This court is of the opinion that the impugned order dated 14.5.2018 passed by the Appellate Committee suffers from the vice of nonapplication of mind to the relevant issues and is contrary to the provisions of the Handbook of Procedures, 2009-14, the Circular dated 16.11.2011 as well as the Public Notices issued in this regard from time to time, which renders the impugned order unsustainable in law - Petition allowed.
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