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2018 (12) TMI 34 - HC - CustomsEntitlement/right to export - Crude Oil- Permissions/approvals/authorisations for direct export or permission/facilitation for canalised export through the third respondent - self-sufficiency - Held that:- It is apparent that the right to export crude oil, if it may be termed so, arises in two situations: one when self-sufficiency is declared and the deemed option conditions exist (clause 18.4) or when payment terms are infringed (Articles 18.5-18.6). No other situation of any contractor possessing a “right to export” can, in the opinion of the court, arise, on an overall consideration of the material terms of the contract. This is further reinforced by the fact that under Article 27 title to “Petroleum underlying the Contract Area and shall remain the sole owner of Petroleum produced pursuant to the provisions of this Contract”. Therefore, the right to export, contemplated under Article 18.7 is only where the UOI “has elected not to purchase pursuant to this Article 18.” It visualizes a situation where the consequence of declaration of sufficiency leads to the exercise of conscious option by the UOI (under Article 18.4) pursuant to its choice” whether or not it intends to exercise its said option to purchase, in writing, not later than ninety days [90] prior to the commencement of the year in respect of which the sale is to be made.” Thus, if the UOI, upon declaration of self-sufficiency of crude oil, elects not to purchase it, the contractor can be said to have an entitlement to export it. That eventuality did not arise in the facts of this case. On this count, the petitioner/appellants’ argument is insubstantial and has to fail. Whether under the FTP, the appellant could legitimately claim the entitlement they sought to enforce through writ proceedings? - Held that:- There is no right to export crude oil, per se. What the FTP enables is that if a case for export of crude oil is to be made, the canalizing agency, the IOL has to give the “no objection” certificate. The appellant’s position therefore, that 'crude oil' is mentioned as STE Export through IOL, supports that no entitlement for anyone else to export crude oil is created. The relevant chapter in FTP provides that if STE itself wants to export/import, it can do so and if 'any other person' intends to import/export, it will have to apply to the STE, which can enable exports. The court is of opinion that the reasons given by the Central Government cannot be characterized as arbitrary or unreasonable. Since the appellant was permitted to sell quantities of crude oil to private refineries in India by the decision of the Empowered Committee of Secretaries, dated 17.08.2009, subject to certain conditions, it is evident that unutilised crude oil would be sold to domestic private refineries. No particular domestic refinery was named. A further condition that crude oil would be sold at international price, was also imposed. Appeal dismissed - decided against appellant.
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