Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2017 (4) TMI 835 - DELHI HIGH COURT

2017 (4) TMI 835 - DELHI HIGH COURT - TMI - BIFR - discharge of export obligation - whether the petitioner has a legal right to the relaxation and concessions under Article 226 of the Constitution of India? - discrimination - similar relaxations and concessions as sought by the petitioner have been granted by the PRC to a large number of similarly circumstanced exporters - Held that: - It is well settled that discretionary power cannot be exercised arbitrarily. If facts - it appears that the PRC .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the software, has been ignored. The PRC has not recorded any definite finding that the Advance License numbers could be accepted in the software. - Petition allowed - The PRC is directed to reconsider its order dated 13.10.2015 in the light of the observations made above - decided in favor of petitioner. - WP (C) 11198/2015 - Dated:- 3-4-2017 - MS. INDIRA BANERJEE & MR. ANIL KUMAR CHAWLA JJ. Petitioner Through: Mr. S. Ganesh Sr. Advocate with Ms. Maneesha Dhir with Ms. Jayashree Shuk .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ral relaxation and concessions to enable the petitioner to get credit for exports already made by the petitioner against export obligations incurred by the petitioner on certain Advance Licenses issued to the petitioner. 2. The petitioner is engaged in the manufacture of home appliances and automotive parts and components for which raw material and inputs are required to be imported. 3. The petitioner was accordingly issued 40 Advance Licenses to which exports obligations were attached. In terms .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed by reason of worldwide recession and the petitioner had become sick, its case was referred to the BIFR. Paragraph 4.1.9 (A) of the Foreign Trade Policy 20042009 would thus be attracted. 6. The said paragraph provided that a sick industrial company registered with the BIFR would have the right to a five year extension of the period allowed for discharge of export obligations. In fact, by an order dated 14.01.2009, BIFR had sanctioned a revival scheme, which envisaged five year extension of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the rights in proceeding under Article 226 of the Constitution of India. The second ground of challenge to the impugned order is on the ground of discrimination against the petitioner and violation of Article 14 of the Constitution of India. According to the petitioner, similar relaxations and concessions as sought by the petitioner have been granted by the PRC to a large number of similarly circumstanced exporters. 8. It appears that the petitioner s application for concessions and / or relaxa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

half of the petitioner submitted that extension orders were issued by the Joint DGFT, Kolkata in July 2010, after a delay of 1 ½ years. The extension was with retrospective effect from January, 2009. The petitioner, therefore, in effect, got an extension of 3 ½ years instead of full period of five years to which the petitioner was entitled under Clause 4.1.9 (A) of the FTP 2004-2009 as a matter of legal right. 11. The petitioner, therefore, applied to the PRC for an appropriate ext .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e petitioner. 12. Mr. Ganesh argued that with effect from 2009, the Import Controlling Authority changed the alphanumeric numbering of import licenses and also changed the software used by them for recording the fulfilment of export obligations, as a result of which, the system and software of the respondent did not accept and record the earlier license numbers given to licenses issued prior to 2009 in connection with the shipping bills covering export made in relation to the licenses. These exp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he form of directions that the export made on such shipping bills should be considered towards discharge of the export obligations even though the shipping bills were free shipping bills and though the Advance License numbers could not be uploaded because of defect in the software. This specific prayer has been granted by the PRC in a large number of cases particulars whereof have been given in the writ petition. 14. Mr. Ganesh next argued that paragraph 4.20 of the Handbook of the Procedures pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f clubbing of licneses in a large number of cases, for example, in the cases of M/s. Zenith Birla (India) P. Ltd. Thane; M/s Titan Laboratories Pvt. Ltd. Mumbai; and M/s Shilpa Medicare Ltd., Raichur. 15. It appears that subsequently certain restrictions were introduced in paragraph 4.20.3 of the Handbook (2009-2014) by amendments on 13.10.2011. Mr. Ganesh argued that these restrictions had to be prospective and could apply only to licenses issued after 13.10.2011. The licenses in respect of whi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t consider the contention of the petitioner that the extension orders had come after 1 ½ years, the extension was therefore only of 3 ½ years with effect from July 2010 and not full extension of five years. 17. The PRC granted waiver of the requirement of mentioning license details only in respect of deemed exports made to special economic zones and not in respect of actual exports made to foreign countries. Mr. Ganesh argued that this ground taken by the PRC was not correct as wai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

argued that the legality and the validity of the impugned order of PRC dated 13.10.2015 had to be judged on the basis of reasons contained therein. The grounds or reasons stated in the impugned order are manifest, patent and self-evident. They are grossly erroneous. The order is therefore required to be set aside by this Court. The grounds cannot be improved by affidavit in this context. 20. The learned Central Government Standing Counsel appearing on behalf of the respondents, Mr. Akshay Makhij .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

etitioner for the purpose of regularization and closure as per paragraph 4.1.9(A) of FTP. 21. Mr. Makhija submitted that PRC had rightly declined clubbing of the Advance Authorizations since the Advance Authorizations had been obtained during the period 1989 to 1993 under the Duty Exemption Scheme which allows import of goods without payment of applicable duties. 22. Mr. Makhija submitted that request had to be considered in accordance with paragraph 4.20 of the Handbook of Procedures 2009 to 20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce licneses shall not be allowed. 23. Mr. Makhija submitted that since the request of the petitioner was for clubbing of expired Advance Authorizations issued between 1989 and 1993, which was not permissible according to the applicable provisions of the Handbook of Procedures, the request was turned down. 24. Mr. Makhija submitted that during the course of arguments, the petitioner had admitted that pre 1992 licenses could not be clubbed with the post 1992 licenses. It was submitted that before .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tted that PRC rightly rejected the prayer for condonation of procedural lapses of non-mentioning details of Advance License numbers in the shipping bills for shipments made on the basis of BIFR package during the period 2006-2007 to 2014-2015 as shipping bills without details of authorization mentioned on it are treated as free shipping bills and are not assessed by the Customs authority and consumption of exempted materials is not examined. 27. Mr. Makhija argued that under the Advance Authoriz .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f the exempted materials consumed in the resultant products. Even after shipment within the specified period, the applicant had the option to approach the Customs authority for getting extension of shipping bills under the provisions of the Customs Act, they did not, however, opt for the same either. 28. Mr. Makhija further submitted that the reasons given by the petitioner of difficulties in the computer system is incorrect as the procedure of registration of license started from 01.04.2009 onw .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not rejected the request of the petitioner on the ground of non relatability of the free shipping bills, Mr. Makhija argued that this aspect has clearly been dealt with by the PRC. 31. Mr. Makhija argued that the petitioner was under obligation to export finished products manufactured by utilization of imported goods with value added within a period of 18 months from the date of issue of license. As per the prevalent procedure they were eligible for two extensions of six months for fulfilment of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

onths from the date of issue of each Authorization and submitted documents within two months thereafter, towards redemption of the cases, but they did not do so. Therefore, the petitioner was liable for penal action of violating the provisions of EXIM Policy under the Foreign Trade (Development and Regulation) Act, 1992. 33. Mr. Makhija submitted that the petitioner became sick in 2001 which was five years after the obligation period. Hence the plea of genuine sickness of the company could not b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pses and failure of the petitioner to act with duly diligence. 35. Mr. Makhija submitted that failure on the part of the petitioner to utilize the inputs imported without paying the duty for manufacture of resultant product and fulfilling the stipulated export obligation even after grant of extension up to 31.01.2014 has resulted in huge loss of revenue to the government exchequer. Mr. Makhija finally argued that the Director General, Foreign Trade might, in public interest pass such orders or g .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and the Policy Relaxation Committee for all other issues. 36. Mr. Makhija submitted that Policy relaxation is not a matter of right. The Committee considers the request on merits taking into consideration the genuine hardship and adverse impact on trade. It is submitted that this was not a case for further relaxation of policy since extraordinary relaxation had already been availed by the petitioner and the petitioner had itself been negligent. The PRC rightly rejected the prayers of the petitio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ension of 3 ½ years only. Appropriate extension of export obligation period was sought to make up for the lost 1 ½ years, which PRC apparently did not appreciate. 39. There is also no specific denial of the change in alpha numeric numbering of import Licenses and change of software as a result of which the software did not accept the earlier licence numbers given to licences issued before 2009 in connection with shipping bills covering exports in relation to the licences. These exp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rla India Ltd. and others. As rightly argued by Mr. Ganesh, subsequent restrictions in paragraph 4.20.3 introduced by amendment on 13.10.2011 have to be prospective and apply to Licences issued after 13.10.2011. The petitioner sought facility of clubbing in respect of Licences issued before 2002. 42. It is difficult to appreciate the logic as to why the requirement of mentioning of Licence details should be waived only in case of deemed exports to Special Economic Zones, but not in case of actua .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

are not borne out by the reasons in the impugned order. 44. Even assuming that the petitioner had sought clubbing of Licences issued from 1989 to 2002, the PRC could have moulded the relief by excluding the pre 1992 Licences, even though there may not have been any request for segregating the pre 1992 Licences. 45. Mr. Ganesh rightly pointed out that the PRC did not reject the application for procedural relaxations and concessions on the ground of non-utilization of imported inputs and raw mater .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of Mr. Ganesh that exports were made under free shipping bills only because of computer problems as Advance License numbers were not being accepted, has not specifically been denied. The dates of the exports are matters of record. The dates are verifiable. There are specific averments that the export related to the period 2009 to 2015. The petitioner has only prayed that actual exports of the petitioner during this period should be taken into consideration for determining the discharge of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

discretion in that way. The proposition finds support from the judgment of the Supreme Court in Ex. Capt. Harish Uppal v. UOI & Ors. reported in 2003 (2) SCC 45. 50. As observed above, there is no specific denial that in large number of other cases, discretion has been exercised. The instances have been given. Refusal to exercise the power in the case of the petitioner would be totally arbitrary, discriminatory and bad in law. 51. Mr. Ganesh submitted that there is no need or warrant for a r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e respondents are a part. 52. Mr. Ganesh referred to the pleadings in the writ petition and submitted that paragraph 4.20 of the Handbook of Procedure 2004-2009 gives the facility of clubbing of licenses only for the purpose of redemption / regularization without imposing any restriction based on the period to which the licenses relate. Paragraph 4.20 expressly provides that the licenses may relate to different periods but the only requirement is that the Customs Exemption Notification in questi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version