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2016 (9) TMI 525 - HC - Customs100% EOU - requirement to achieve positive net foreign exchange (NFE) during every block of five years of its existence - period for computing the block of five years for consideration of NFE - manufacturing activity had commenced on 28.02.2003. the first block of such five years would comprise of financial year 2002-03 to 2006-07 and the second block of five years would comprise of the financial year 2007-08 to 2011-12. - the first block of five years would commence from 01.04.2003 and end on 31.03.2008 and, the second block would be the financial year 2008-09 to financial year 2012-2013 - foreign trade policy - which would be the relevant block period of five years for computing NFE? - Imposition of penalty - sub section (2) of Section 11 of the Foreign Trade Development and Regulation Act, 1992 Held that: - the computation of NFE would be financial year wise and which would be the beginning of the financial year following the year under which the manufacturing activity commences. Under no circumstances such period would be the period anterior with the date of manufacturing activity. Even if a literal interpretation of expression used in Clause 6.5 of the foreign trade policy is taken, it refers to the calculation of NFE cumulatively in block of five years “starting from the commencement of production” - block of five years to begin from 1.04.2003. Monitoring the performance of the unit - period envisaged would be the financial year immediately starting the manufacturing activity - the unit which has not completed one year from the date of commencement of commercial production will not be monitored. Further, a unit which has completed less than five years from the date of commencement of the commercial production, it would be monitored only for the number of completed years. The reference to completed years must be for a broken period between the date of commencement of production and the commencement of financial year. Interpretation of policy not in favor of petitioner - decided against the petitioner.
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