Home Case Index All Cases Customs Customs + HC Customs - 2017 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 1019 - HC - CustomsEPCG scheme - whether under FTP 09-14 read with Handbook of Procedures, the export obligation under the applicable EPCG scheme is to be computed as multiple of the duty saved, as claimed by the petitioner, or as multiple of the depreciated value on the capital goods as insisted upon by the respondents? - amendment of the Authorisation enhancing the export obligation - jurisdiction. Held that: - the purpose of Circular No. 35 (RE-99)/99-2000 was to clarify the manner in which export obligation was to be computed in case of a firm or a company having multiple units and entities having a standalone unit. The FTP as applicable prior to FTP 04-09 provided for computation of export obligation on the basis of multiple of the capital value of the goods imported. Thus, the mention of export obligation as equivalent to six times or eight times the depreciated value, in the circular no. 35, was in conformity with the FTP applicable at the material time. A plain reading of CIRCULAR NO. 84 (RE:2008/2004-09), indicates that the central purpose of the circular was not to define the quantum of export obligation but to provide a clarification with regard to maintenance of annual average turnover. Clause (i) of the aforesaid circular clarified that a standalone unit was not required to maintain an annual average export obligation - However, in case where the firm or a company had multiple units, average export obligation after debonding of unit would be fixed by excluding the exports made by the debonded units from the total exports of the firm. If the said circular is read in the context of the FTP 04-09, it is at once clear that the reference to computation of export obligation on the basis of depreciated value of machinery, is inapposite and contrary to the provisions of the FTP 04-09. However, it appears that this error had crept into the circular because a similar clarification was provided by the Policy Circular no. 35 issued on 01.10.1999 and that circular (Circular no. 35) referred to additional export obligation to be six times or eight times the depreciated value of goods (which was in conformity with the then FTP). The same measure seems to have been copied in Circular no. 84 completely ignoring the material change in the manner of calculating the export obligations as effected by FTP 04-09; the measure of export obligations as provided in FTP 04-09 and FTP 09-14 had changed to multiple of duty saved and not the value of capital goods. There is thus much merit in Mr. Parikh’s contention that reference to the export obligation as being equivalent to six / eight times the depreciated value in Circular no. 84 dated 30.04.2009 is erroneous. However, even if it is accepted that the same is not an inadvertent error - which in this court’s view it is - but a conscious decision taken by the DGFT, the same is nonetheless not sustainable as such provision runs contrary to the applicable FTP (FTP 09-14). it is not necessary to examine the question, whether DGFT had the power to amend the authorisation - petition allowed - decided in favor of petitioner.
|