TMI Blog2013 (6) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 31.1.2011 - Held that:- The above may not apply to a valid license, the transferability of which is endorsed. It is to be noticed that the clarification issued by the Ministry of Commerce dated 31.7.2008 and the DGFT Policy Circular dated 24.3.2009, which were in force prior to issuance of license in question dated 15.4.2010, will be made applicable to the license, as it extends the benefits of flexibility to import the alternative input/product mentioned in the SION and that appears to be the main tenor of the petitioner's plea seeking release of the Lactose stating that the clarification and the circular which were in force at the time of issuance of license will be applicable to the goods imported and not the subsequent clarifications is no doubt justified in view of the decision of S.B. International Ltd. case [1996 (1) TMI 125 - SUPREME COURT OF INDIA] wherein been held in categoric terms that the norms that are applicable on the date on which the license is issued will be valid in respect of goods imported under the said license. Since the license in this case was issued on 15.4.2010 and on the date on which the license was issued the clarification dated 31.7.2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various items used in pharmaceutical, beverage, food and other industries. In the course of business, they have entered into an agreement with one Kawarlal Co., Chennai for purchase of 400 Kgs. of Lactose. The said Kawarlal Co. imported a consignment of Lactose and the said consignment was kept in the Customs Warehouse under Warehouse Bill of Entry No.6689020, dated 30.4.2012 with In-bond Reference No.2000281547, dated 11.5.2012. The said Kawarlal Co. sold the consignment under In-bond Sales Invoice No.Bond/2012-13/000052, dated 4.8.2012. On purchase of the Lactose through In-bond sales, the petitioner filed Ex-bond Bill of Entry No.7590365, dated 6.8.2012 before the Customs Department, Chennai for clearance of the goods under DFIA License No.0710070929 stating that it has been duly endorsed for transferability by the competent authority in terms of the Foreign Trade (Development Regulation) Act, 1992. It is under this transferred DFIA License that the goods are sought to be cleared. 3. Insofar as the license in issue is concerned, the said DFIA License No.0710070929, dated 15.4.2010 was originally issued to Britannia Industries, Bangalore, as actual manufacturer. On com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d right accrued to the appellant for issuance of advance licences as per the value addition norm in vogue on the date of filing of the said applications the moment it made those applications and whether any subsequent change in policy effected before the issuance of licences, is not applicable to such licences. For answering this question, one has to look to the policy itself, the material clauses of which have already been set out. The said provisions make it clear that the object behind the Scheme is to enable the exporter to import raw materials, components etc. required for the purpose of producing goods for export. It is a facility provided by the Government an incentive. There is no right to advance licence apart from the policy. No citizen has a fundamental right to import, much less import free of duty. By granting the advance licence, the licensing authority tells the licensee I am permitting you to import raw material, components etc. of a particular value free of duties but you must export goods of a particular value (determined as per value addition norm in vogue on the date of licence) within a particular date. If you fail to do so, you will be liable to levy of penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . With regard to export there is no dispute. Paragraph 51 of the Export Import Policy specifically provides that in respect of quantity based Advance Licences for which standard input-output norms have not been published, the quantitative norms will be as specified by the competent authority. On the basis of the said policy after considering the petitioners Application and after verifying the facts from them the Petitioners were given Advance Licence by reducing the quantity and also amount. One of the conditions of the said Licence is as under : '(i) This licence shall be subject to the conditions in force relating to the goods covered by the licence as described in the relevant import Trade Control Policy Book, or any amendment thereof made upto and including the date of issue of the licence, unless otherwise specified.' This term itself indicates that the relevant date for grant of Advance Licence is the date of issue of licence and the licence was only subject to the conditions relating to the goods covered by the licence or amendment thereof made up to and including the date of issue of the licence unless otherwise specified. Therefore, it cannot be said that even though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be liable to levy of penalties and other action according to law. The duty free import of raw materials etc., is permitted to enable the exporter to sell his goods abroad at a more competitive price, thereby fetching precious foreign exchange for the country. Mere making of an application does not create any right in applicant since he has no pre-existing right to such licence.' Thereafter the Court pertinently observed as under:- 'It is the date of licence that is relevant and not the date of application therefor. It is obvious that the norm (value addition norm) in vogue on the date of grant of licence shall govern the licence.' It is, therefore, obvious that grant of Advance Licence depends upon the policy prevailing as on the date of such grant. Once a licence is granted, it could not be revoked or modified merely on the ground that the value addition norm was changed. Further, even the new policy and the norms do not provide that Advance Licences granted earlier should be modified accordingly." (emphasis supplied) 7. The learned Senior Counsel appearing for the petitioner relied upon a decision of the Supreme Court in Jain Exports (P) Ltd. v. Union of India, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effected in pursuance of a REP Licence dated 13th December 1990, would be governed by the import export policy of AM 1988-91." 8. Based on the above said decisions, it is contended by the learned Senior Counsel that in the case on hand the license was originally issued to Britannia Industries; the export obligation has already been discharged; the license has been endorsed for transferability; and they are eligible to import items in terms of the license and the DGFT clarification dated 31.7.2008. 9. Another point canvassed by the learned Senior Counsel appearing for the petitioner is the endorsement in the license, which reads as follows: "The licence shall be subject to the conditions in force relating to the goods covered by the licence and the class of importers as described in the relevant Export-Import Policy and Handbook of procedures, or any amendment thereof made upto and including the date of issue of the licence, unless otherwise specified." It is pointed out that the Import-Export Policy and Handbook of Procedures that covers the license is of the year 2009-2014 and the clarification issued by the DGFT dated 31.7.2008. 10. Mr. D. Vijaykumar, learned counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a revalidated Authorisation. 2.12.2. Validity of an import Authorisation is decided with reference to date of shipment/dispatch of goods from supplying country as given in Paragraph 9.11A of HBP v1 and not the date of arrival of goods at an Indian port" 13. The learned Senior Counsel for the petitioner also referred to In-bond sale invoice dated 4.8.2012 and pointed out that it is referable to the Bill of Entry dated 30.4.2012. 14. The sum and substance of the case of the petitioner and the counter made by the respondents is based on the various communication, clarifications and circulars issued by the DGFT from time to time and a reference to the following circulars is relevant for the purpose of deciding this case: (i) Clarification No.01/94/180/151/AM 09/PC 4, dated 31.7.2008: "No.01/94/180/151/AM 09/PC 4 GOVERNMENT OF INDIA MINISTRY OF COMMERCE DIRECTORATE GENERAL OF FOREIGN TRADE UDYOG BHAVAN, NEW DELHI 110 011 Dated : 31.7.2008 To: Commissioner of Customs (Exports) Ministry of Finance Department of Revenue 33, Rajaji Salai, Customs-House Chennai 600 001. Kind Attention: Shri C.Rangaraju, Joint Commissioner of Customs, Group 7 DEEC/ Subject: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graph 1.1 of the Handbook of Procedures (Vol.I), the Director General of Foreign Trade hereby makes the following amendments/corrections in the Handbook of Procedures, Vol. 2, 2009-2014, as amended from time to time. 2. In the statement of Standard Input Output Norms (SION) as contained in the Handbook of Procedure (Vol. 2), 2009-2014, as amended from time to time, amendments at appropriate place as mentioned in ANNEXURE A to this Public Notice are made. 3. This issues in Public interest. sd/- DIRECTOR GENERAL OF FOREIGN TRADE and EX-OFFICIO SPECIAL SECRETARY TO GOVERNMENT OF INDIA (Issued from File No. 01/85/162/412/AM10/DES.VI) Annexure A to the Public Notice No.84/2009-2014 Dated: 23.07.2010 AMENDMENTS/CORRECTIONS In the existing SION E-1 and SION E-5, note be included as under:- Note for E-1:- Import item at Sl. No.1, 2 3 shall be allowed with actual user condition with accountability of actual use on the export side. Note for E-5:- Import item at Sl. No.1, 2, 3, 4 5 shall be allowed with actual user condition with accountability of actual use on the export side." (iv) Clarification F.No.01/94/180/141/AM9/PC-4/DES.VI/394, dated 23.9.2010: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was made on 6.12.2010. Therefore, the license is valid till 30.4.2012 for shipments or imports made under the said license, in terms of paragraph 9.11A read with paragraphs 2.12.1 and 2.12.2 of the Handbook of Procedures, 2009-2014 . Hence, the contention of the respondent/department that the imports are not covered by a valid license cannot be countenanced. It is also not in dispute that the Bill of Lading in this case was issued on 14.4.2012 and In-bond Bill of Entry was filed on 30.4.2012. Therefore, the license covers the import and there cannot be any dispute on its validity in relation to the import. 16. Insofar as the issue relating to the applicability of the Public Notice dated 23.7.2010, the Clarification dated 23.9.2010 and the Policy Circular dated 31.1.2011 is concerned, the same may not apply to a valid license, the transferability of which is endorsed. It is to be noticed that the clarification issued by the Ministry of Commerce dated 31.7.2008 and the DGFT Policy Circular dated 24.3.2009, which were in force prior to issuance of license in question dated 15.4.2010, will be made applicable to the license, as it extends the benefits of flexibility to import the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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