TMI Blog2018 (4) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... h export subsidy. The respondent, like BSSKL squarely falls within the scope of words of “domestically manufactured sugar with a view to promoting its export for such period as it deems proper” under Clause-20. The reason assigned by the Government of India in the impugned order Annexure-A dated 09.04.2013 for denying the said export subsidy is that the export of entire quantity of 8130 MTs sugar was made under Advance License and the export of sugar made under Advance License is not admissible for grant of export subsidy under SDF Rule 20, is not at all a tenable reason borne out from the relevant clause SDF 20 or any other clause of the Notification - The said Scheme does not make any such distinction or discrimination in the matter. On the one hand, the Central Government cannot compel a person to sell the sugar to an exporter and on the other hand, deny the export subsidy to it, which is clearly envisaged in the export subsidy scheme itself and there is no such exclusion in the same as is sought to be made out in the impugned order Annexure-A dated 09.04.2013. Appeal dismissed - decided against Revenue. - Writ Appeal No. 200282/2018 (GM-RES) - - - Dated:- 23-3-2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to such export subsidy under clause SDF Rule 20 of the said Gazette Notification. 6. On the other hand, learned counsel for the respondent-BSSKL Mr. H.N.Shashidhara submitted before us that the Advance Licence for import of raw sugar in the present case was not issued to the respondent-BSSKL, but in favour of the exporter M/s. Bannari Amman Sugar Limited (BASL) and the respondent-BSSKL had only produced the sugar from the sugar cane grown in the reserved area in Karnataka and after manufacturing the said sugar in its sugar factory, had exported the same through M/s. Bannari Amman Sugars Limited (BASL) under the directions of the Government of India itself vide Annexure-C Order dated 23.03.2004, whereby the respondent-BSSKL was directed to deliver and dispatch 8500 Metric Tons of sugar for the year 2003-2004 (October 2003 to September 2004) for the purpose of export to M/s. Bannari Amman Sugars Limited (BASL), Coimbatore. 7. He further urged that the export subsidy scheme in question does not make any exclusion of the manufacturer and supplier of sugar, if such sugar sold by the manufacturer is finally exported through entities like M/s. Bannari Amman Sugars Limited (BASL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities in proof of export of the contracted quantity. 11. The learned counsel for the respondent therefore submitted that the respondent itself has not exported the sugar in question directly in discharge of any export obligation under the Advance Licence, but has supplied the sugar to M/s. Bannari Amman Sugars Limited (BASL), who, in turn, have exported it, in discharge of their export obligations and therefore the SDF Rule 20 for export subsidy cannot adversely affect the case of the Respondent, as contended by the learned counsel for the Union of India. 12. We have heard the learned counsels at length and perused the record. We find that the contentions raised by learned ASGI for Union of India are not tenable and the present appeal filed by the Union of India deserves to be dismissed. The reasons are as follows. 13. The Export Subsidy Scheme in question under the Gazette Notification dated 21.06.2002 including clause 20 in Chapter-IX of the said Gazette Notification, is quoted below for ready reference: NOTIFICATION New Delhi, the 21st June, 2002 G.S.R. 443(E).- In exercise of the powers conferred by Section 9 of the Sugar Development Fund Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture on internal transport and freight charges shall be borne by that sugar factory. Explanation II. Where a sugar factory has exported sugar through an exporter, the customs attested Export Promotion (EP) copy of the Shipping Bill shall indicate the name of the exporter as well as that of the sugar factory. Explanation III. An exporter means a person who holds an Importer-Exporter Code number allotted to him by the Director General of Foreign Trade of the Central Government. (4) A sugar factory eligible under sub- rule (3) shall prefer a claim for reimbursement of expenditure incurred on the internal transport and freight charges on export shipments of sugar in Form VI within thirty days of the issue of Bank Certificate of Export and Realisation as given in Appendix 22 of the Handbook of Procedure (Vol.I) for the period 1st April, 2002 31st March 2007 issued by the Central Government in the Ministry of Commerce and Industry, Department of Commerce. Provided that if a sugar factory fails to prefer the claim within the thirty days, such sugar factory may submit the claim in another thirty days but there shall be late cut at the rate of 10% on the entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) for the distance from loading railhead nearest to the sugar factory to the railhead nearest to the port, the railway freight by the shortest route; (iii) for the distance from railhead nearest to the port to the point of loading at port, the transportation rate as specified in the Sugar (Price Determination for Production) Order of the relevant sugar season; (iv) where a sugar factory has preferred to transport export consignments of sugar by road instead of railway, the claim for reimbursement of expenditure on internal transport and freight charges shall be restricted to the total of transportation charges and railway freight charges as specified in (i) to (iii) above or the actual transportation charges by road incurred by the sugar factory, whichever is less. Explanation The restriction imposed in the Sugar (Price Determination for Production) Order of any relevant sugar season, as regards the transportation charges, shall not apply for the purpose of this sub-rule and the sugar factory shall get reimbursement for the full distance between the sugar factory and the nearest railhead. (8) A sugar factory claiming reimbursement of expenditure in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting its export for such period as it deems proper under Clause-20 quoted above. 15. The purpose of giving such export subsidy may be to clear off the stocks of sugars held by sugar factories in view of the excess production during the particular period as argued by learned ASGI and to reduce the cost burden of such manufacturers, the export subsidy to the extent of internal transport and freight charges to the sugar factories on export shipment of sugar was announced by the Central Government. 16. Clause 20(3) of the said Gazette Notification requires any sugar factory after obtaining release order issued under clause 5 of the Sugar (Control) Order, 1966, which has transported its manufactured sugar for export shipments, and the same has been exported either by the sugar factory or through an exporter. Explanation I of Clause-20(3) clearly envisages this. The said clause clearly supports the case of the respondent-BSSKL, as admittedly the respondent- BSSKL has transported its manufactured sugar to be exported through an exporter like BASL. 17. There is nothing on record to indicate that the internal freight charges paid by the respondent have been borne or actually paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure-Q, the said export subsidy was granted to one M/s. Mahatma Gandhi Sahakara Sakkare Kharkhane Ltd., Bhalki and therefore, the appellant-Union of India could not discriminate the case of the BSSKL. 23. The learned Assistant Solicitor General during the course of arguments submitted before us that even the export subsidy granted to the said manufacturer M/s. Mahatma Gandhi Sahakara Sakkare Kharkhane Ltd., Bhalki was cancelled and recalled. We do not find any justification for the same, but since the recall of the subsidy from Mahatma Gandhi Sahakara Sakkare Kharkhane Ltd., Bhalki is not under challenge before us nor any such documents are placed before us, we are not inclined to take it as any justification for denying the claim of the Respondent sugar factory. We are of the clear opinion that the rejection of export subsidy in the case of the said party M/s. Mahatma Gandhi Sahakara Sakkare Kharkhane Ltd., Bhalki cannot furnish any valid ground for rejection of the case of the respondent-BSSKL for such export subsidy. 24. In view of the aforesaid reasons, the present appeal filed by the Union of India is liable to be dismissed and the same is accordingly dismissed. No cost ..... 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