TMI Blog2017 (7) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... cation for clubbing of the three AAs which were not as per the Notification dated 5th June, 2012. Whether the Policy Relaxation Committee (PRC) has the power to impose conditions, while allowing clubbing of the 3 AAs? - Held that: - the powers of the PRC, while making its recommendations are wide and are purely discretionary. The PRC, in its order dated 24th April, 2015 has considered the relevant facts and permitted the clubbing of the three Advanced Authorizations and while permitting the said clubbing, conditions ‘as it deemed fit’ have been imposed by it which cannot be said to be perverse or arbitrary. The review order of the PRC dated 26th April, 2016 also clearly shows that the case of the Petitioner was discussed at length and it is only thereafter, that the decision dated 24th April, 2015 was reiterated. The submission of the Petitioner that the PRC does not have the power to impose such conditions does not appear to be correct inasmuch as the order of clubbing is by itself an exercise of power for granting an exemption - The exercise of discretion to grant exemption is a delicate balance between balancing the hardship of the Petitioner and the adverse impact on trade. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II. This is only for regularization of exports already effected and closure purpose and not for any further exports/imports. IV. Accounting of exports made against the Authorisations so clubbed, beyond 36 months but upto 48 months, from issue of the earliest Authorisation would be as under: ( a) For exports made after 36 months but upto 42 months subject to payment of composition fee @ 0.5% of FOB value of exports. ( b) For exports made after 42 months but upto 48 months on payment of composition fee @ 0.5% per month of FOB value of exports. V. RA shall examine the case in terms of Para 4.09 of FTP (2015-2020) and ensure value addition of minimum 15%. The 15% value addition for evaluating entitlement is to be applied on the entire FOB and CIF of the Authorizations to be clubbed. VI. RA should ensure proper accounting of the duty free inputs with reference to the export product while clubbing the Authorizations. VII. Even after clubbing, shortfall, if any, shall be regularized on payment of Customs Duty + Interest in terms of Para 4.49 of H.B.P. ( emphasis supplied) The Petitioner is primarily aggrieved by condition (II) and ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such Authorisations are valid or not. 4.20.4 Upon clubbing wherever exports are accounted beyond the EO period of the earlier Authorisation, a composition fee of 0.5% of the shortfall in EO shall be levied. The amendments, thus, permitted clubbing of AAs which were dated within a time span of 36 months and if exports were not completed within the prescribed period, then a composition fee of 0.5% of the shortfall in Export Obligation ( EO ) was leviable. This notification gave a second breath of life to the Petitioner's AAs, which, of course, turned out to be short lived as will be evidenced from the facts below. 7. On 5th June, 2012, para 4.20.3 of the Handbook of Procedures (Vol-1) was again amended vide to the following effect: 4.20.3 Only such Advance Authorisations shall be clubbed which have been issued within 18 months from the date of issue of the earliest authorisation that is sought to be clubbed, whether such authorisations are valid or not. Thus the clubbing of AAs was now permissible for only those which were issued within 18 months from the date of issue of the earliest Authorisation and no clubbing of AAs with less than 18 months EOP was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice No. 79. It is this clarification that the Petitioner is aggrieved by. The Petitioner states that the fixing of this date of 4th June, 2012 is completely perverse and arbitrary as it was done on 18th April, 2013 in a retrospective manner. 12. The Petitioner approached the PRC, for the second time, on 25th November, 2013 seeking clubbing of the three AAs for the purpose of redemption. The said request of the Petitioner was duly considered and clubbing was permitted subject to the conditions as extracted in para no.2 above. The Petitioner sought re-consideration of the said conditions but the PRC reiterated its earlier order, in its meeting dated 26th April, 2016. The said two orders dated 24th April, 2015 and 26th April, 2016 so passed form the genesis of the present petition. Petitioner's submissions 13. Mr. P. Chidambaram, learned Senior Advocate appearing for the Petitioner, submits as under:- (i) the PRC had no jurisdiction or power to impose the composition fee, and having allowed the clubbing of the three AAs, the imposition of conditions in effect constituted an amendment of the Policy as envisaged in Public Notice No. 79 which was outside the powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot have invoked the policy as it stood prior to 5th June, 2012. 16. It is further the submission of Mr. Abhishek Ghai, that the PRC has the power to grant relaxation and within the power of relaxation includes the power to impose conditions. The PRC having allowed the request of the Petitioner for clubbing of the three AAs, the conditions imposed by the PRC are not arbitrary or illegal. Mr. Ghai refers to and relies upon the judgment of Bombay High Court in Kim Chemicals Limited v. Union of India [decision dated 6th September 2016 in W.P.(C) No. 2325/2015] in support of his submissions. Analysis and findings: 17. We have heard the submissions made by the learned counsels for the parties. From the facts and submissions, the following issues arise for our consideration:- Issue No. 1 Whether the Petitioner is entitled to invoke Public Notice No. 79 dated 13th October, 2011 on 29th August, 2012 and seek clubbing of the three AAs? Issue No. 2 Whether the PRC has the power to impose conditions, while allowing clubbing of the said three AAs? Issue No. 1 Whether the Petitioner is entitled to invoke Public Notice No. 79 dated 13th October, 2011 on 29t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has the power to impose conditions, while allowing clubbing of the 3 AAs. 22. The Petitioner, under these circumstances, approached the PRC for seeking an exemption and exercise of discretion in its favour. The powers of the PRC are contained in Para 2.5 of the Foreign Trade Policy 2009-14. The said paragraph is reproduced herein below: - 2.5 Exemption from Policy / Procedure DGFT may pass such orders or grant such relaxation or / Procedure relief, as he may deem fit and proper, on grounds of genuine hardship and adverse impact on trade. DGFT may, in public interest, exempt any person or class or category of persons from any provision of FTP or any procedure and may, while granting such exemption, impose such conditions as he may deem fit. Such request may be considered only after consulting committees as under: Sl. No Description Committee ( i) Fixation / modification of product norms under all schemes Norms Committee ( ii) Nexus with Capital Goods (CG) and benefits under EPCG Schemes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inasmuch as, the principle of legitimate expectation does not come into play where there is exercise of power in public interest. Recently, the Supreme Court in Reliance Telecom Ltd. v. Union of India (2017) 4 SCC 269 has held as under:- The principle of legitimate expectation can never override public interest and when there is larger public interest, the question of legitimate expectation does not arise; and in any case, in the present case, if we allow ourselves to say so, this contention is absolutely sans merit. 25. The Bombay High Court in Kim Chemicals (supra) , has rightly observed as under:- 18. We are in agreement with the Respondents that the Petitioners case as set out in the petition cannot be accepted. It is evident from the petition itself that they aware of the defaults and which had occurred. They firstly sought a relaxation from the condition and then made an application for clubbing. The Petitioners have gone as far as insisting that their case is similar to other two companies one of which is M/s. Prachi Pharmaceuticals Pvt. Ltd. They had also, in similar circumstances, sought identical relief of clubbing according to the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is in these circumstances that the clubbing applications were considered and the condition was imposed restricting the compliance to 48 months. Thus, exports effected upto 48 months from the date of issuance of the earliest authorisation for clubbing the authorisations came to be imposed. We do not think that such an exercise which by its very nature is a matter of discretion so as to enable the defaulters like the Petitioners to fulfill their obligations belatedly, can be challenged on the ground that there is a condition imposed in the relaxation or exemption. The above conclusion of the Committee cannot be said to be perverse or based on no material. We do not think that the Committee has failed to apply its mind to the relevant facts and circumstances of the Petitioner's case. The Petitioners cannot go on improving their version as originally projected by relying on some information available to them after an application made under the Right to Information Act, 2005, was invoked by them. By its very nature, the power to relax is exercised on case to case basis. Once relaxation is not a right and nothing accrues in the Petitioners' favour to apply and seek uncondition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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