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2016 (5) TMI 776 - CALCUTTA HIGH COURT

2016 (5) TMI 776 - CALCUTTA HIGH COURT - 2016 (336) E.L.T. 645 (Cal.) - Entitlement to extension of EPCG licence - Export licence had expired prior to the policy spoken of by the petitioner - Recovery of certain claims - Petitioner submitted that BIFR has extended the export obligations for a period of ten years from March 31, 2008 and the scheme sanctioned by the BIFR is under implementation. Therefore, it is binding upon the respondents - Held that:- the authorities will look into the performa .....

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circulars of the department allow the petitioner to furnish security by way of a bank guarantee. Also the bank guarantee in question has been renewed on May 3, 2016 and is in terms of the General Exemption No. 56 and the Circular No. 52/95, the same should be allowed to be accepted. Moreover, as the petitioner being a sick company it would be harsh and burdensome if it is directed to put in cash security. - Held that:- the petitioner has obtained the bank guarantee by furnishing cash securit .....

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eventuality, the State Exchequer ultimately suffers. Conversely, if money is allowed to be deposited with the authorities, the same will enure to the benefit of all the parties. The petitioner will receive refund of the money deposited in the event it is found to be refundable. However, in the event the petitioner is found to be a debtor to the authorities then the money lying with the authorities, can be adjusted against such claim without any further action. Invoking the bank guarantee and rec .....

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y. Therefore, the petitioner will deposit a cash security with the authorities as security for the subject licence. - Petition disposed of - W.P. No. 1714 of 2006 - Dated:- 12-5-2016 - Debangsu Basak, J. For the Petitioners : Mr. J.P. Khaitan, Sr. Advocate Ms. R. Kajaria, Advocate Ms. A. Banerjee, Advocate Mr. Uttam Sharma, Advocate For the Respondent : Mr. P.K. Bhowmick, Advocate, Mr. Kaushik Dey, Advocate, Mr. Shekhar B Saraf, Advocate, Mr. Subir Kumar Saha, Advocate JUDGMENT Debangsu Basak, .....

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nce being BIFR Case no. 336 of 2001, the BIFR had by an Order dated January 19, 2009 sanctioned a scheme for rehabilitation of the first petitioner. Such sanctioned scheme postulates that, the first petitioner would have ten years time to fulfil the export obligations under the concerned licence commencing from the cut-off date being March 31, 2008. In such circumstances, he has submitted that, the petitioner should be allowed the time as sanctioned by the BIFR to fulfil its export obligations. .....

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he claim of the authorities had been secured by a bank guarantee and that such bank guarantee had been renewed from time to time. He has also pointed out that, subsequent to the last hearing the petitioner has expended substantial amounts to obtain a fresh bank guarantee incorporating a clause that such bank guarantee shall remain in full force upto March 31, 2019. He has submitted that, such period is sufficient to cover the claim of the authorities. Learned Advocate for the respondent nos. 1 t .....

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009 had sanctioned a scheme for rehabilitation of the first petitioner. The sanctioned scheme provides that, the first petitioner would have ten years from the cut-off date being March 31, 2008 to fulfill its export obligations. Learned Senior Advocate for the petitioner has submitted that, the Export Promotion Capital Goods Licence subsisting was the EPCG Licence dated January 2, 1996. That being the situation, the BIFR had extended the export obligations of the first petitioner for a period of .....

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licence if the petitioners have failed to discharge such obligations. A question of security for the event of default of the petitioner to fulfil the obligations under the licence within the extended time requires consideration. The petitioner has a bank guarantee valid upto March 31, 2019 as security. According to the petitioner, relevant circulars of the department allow the petitioner to furnish security by way of a bank guarantee. The relevant portion of the General Exemption No. 56 issued u .....

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ct, 1975 (51 of 1975) as is in excess of the amount calculated at the rate of 15% ad valorem and whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act, subject to the following conditions, namely :- ……………………………………………………………………………………&helli .....

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he date of issue of licence. Proportion of total export obligation. 1. 1st year NIL 2. 2nd year 10% 3. 3rd year 20% 4. 4th year 30% 5. 5th year 40% The relevant portion of the Circular No. 52/95 dated May 25, 1995 is as follows:- 4.1 Under E.P.C.G. Scheme also bond should be insisted upon for the difference between the duty leviable on goods on merits and the duty actually paid on importation. However, the Bank Guarantee to the extent of 50% of the duty saved should, normally be sufficient. Star .....

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hellip;……………………………… Learned Senior Advocate for the petitioner has submitted that, since the bank guarantee in question has been renewed on May 3, 2016 and is in terms of the General Exemption No. 56 and the Circular No. 52/95, the same should be allowed to be accepted. Moreover, the petitioner being a sick company it would be harsh and burdensome if the petitioner is directed to put in cash security. In course o .....

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t petition ultimately not succeeding. Such writ petitioner had furnished the bank guarantee, taken delivery of the goods from the authorities and subsequently failed to renew the bank guarantee. In one matter, in spite of directions for the petitioners to be present in Court and in spite of police being directed to produce them, the petitioners did not volunteer to appear nor have the police been able to locate them. The amounts involved in those matters are substantial. In any event, the State .....

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directed to be furnished. The plea that since the petitioner is before the BIFR therefore the direction to put in cash security instead of bank guarantee would be harsh and burdensome upon the petitioner is misplaced. A reference to the BIFR in respect of a company is in relation to the liabilities accruing up to the end of the financial year for which such reference has been made. Moreover, a commercial bank usually requires full security in cash in terms of the relevant guidelines of the Rese .....

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