TaxTMI 
TaxTMI 
2019 (8) TMI 919
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....lated under Foreign Trade Policy. (ii) The Extension given by respondent No. 2 vide License Amendment sheet dated 02.01.2017, expiring on 27.03.2017 may be extended or made applicable for a period of 2 years prospectively from the date of communication of the order of extension or from the date of Order of this Hon'ble Court." 1.01. The Petitioners herein have preferred the present petition in view of the fact that the Export Obligation Period (hereinafter referred to as "EOP" for the sake of convenience and brevity) of the petitioners subject to Export Promotion Capital Goods (hereinafter referred to as "EPCG" for the sake of convenience and brevity) authorization expired on 27.03.2015 and thereafter the petitioners had approached the respondent authorities for extension of Block-wise EOP, for which composite fee as instructed was paid by the petitioners but thereafter, the petitioners were granted an extension for a period of two years, not from the date of the decision of the extension i.e. 2nd January, 2017 (received on 12.01.2017) but from the date of original expiry of EOP i.e. 27.03.2015. Being aggrieved and dissatisfied by the illegal and arbitrary manner of granting t....
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....d against 720 days deferred Letter of Credit (LC), when the exchange rate of Japanese YEN was 0.38 to a rupee and after two years because of heavy recession, the exchange rate of YEN increase substantially to approximately 0.54 to a rupee. Because of which the banks increased the monthly installments of the petitioner Company by almost 50%, this all happened during heavy world-wide recession. Alongside during the said period digitization took over the printing industry and thereby the business had substantially reduced. 2.06. Even before the Export obligation period under the EPCG Authorization expired on 27.03.2015, the petitioners approached the office of the respondent No.2, explaining the circumstances and seeking remedy by way of extension of Expert Obligation period under the said authorization, however no response was given by the officers of respondent No.2. After lot of persuasion on 5/3/2016, a letter seeking request for extension of Export Obligation period was accepted by the officers of Joint DGFT, Ahmedabad. The Petitioners herein thereafter were instructed to pay 2% of the duty saved and in lieu thereof the petitioners on 16.06.2016 paid an amount of Rs. 3,64,985/-....
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....ctively procured nor executed. The petitioners also submitted that the granting of extension of the export obligation period by 2 years in above manner is akin to not granting any extension at all. The petitioners thereafter on 12.09.2017 received an e-mail from the respondent no. 3 directing the petitioners to furnish the copy of valid export orders. The petitioners by their e-mails dated 12.09.2017 and 03.10.2017 duly submitted the purchase orders received by the petitioner Company. 2.10. The petitioners thereafter on 23.11.2017 received an e-mail from the respondent no. 3 and copy of the same was also sent to respondent no. 2, the same was with regard to demand notice from the Regional Authority as well as in respect of personal hearing to be given to the petitioners to explain their case. The petitioners thereafter had contacted the Regional Authority and requested them to send their comments to the respondent no.3 and the same was duly communicated to the respondent no.3 by the petitioners vide email dated 28.11.2017. The respondent No.3 thereafter by its e-mail dated 04.12.2017 informed the petitioners to approach Regional Authority, Ahmedabad for extension in EOP in respec....
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.... of goods i.e. Rs. 7,05,65,554/- and also furnish Security in the form of Bank Guarantee for an amount of Rs. 2,70,00,000/-. 2.14. Originally an amount of Rs. 28,05,000/- was given as Bank Guarantee at the time of issuance of the license and thereafter an amount of Rs. 2.70 Crores has been given as security by way of Bank Guarantee to the Customs Department towards the duty liability, which is sufficient to take care of total Duty Liability on the capital goods imported under EPCG Scheme. During the past one year, the petitioners have exported the goods worth around Rs. 89.4 lakhs, manufactured on the capital goods imported under the said Authorization, without availing the benefit of EPCG scheme and if given extension, they can fulfill their export obligation within a period of 2 years. 3.00. An Affidavit-in-reply has been filed on behalf of the respondent No.2, affirmed by Mr.Akshay S.C., Dy.DGFT. In the said reply, the following contentions have been raised. 1. At the outset, I say and submit that I have gone through the record pertaining to the present case and I have read the contents of the present petition and, therefore, being conversant with the facts and circumstan....
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....illed in terms of the above propositions, except in such cases where the export obligation prescribed for a particular block of year is extended by the competent. authority, such Authorisation holder shall, within 3 months from the expiry of the block of years, pay duties of customs plus 15% interest of an amount equal to that proportion of the duty leviable on the goods which bears the same proportion as the unfulfilled portion of the export obligation bears to the total export obligation." The petitioner had not completed the First block E0 within 27.03.2013. The Petitioner had neither regularized as per 5.8.3 within a period of 3 months. The petitioner had scant regard to complying to the conditions of the EPCG scheme. Despite this office sending Demand notice to the petitioner on 27.08.2012 for not having submitting progress in the Export obligation period, the petitioner had not replied to this office. In fact the letters sent to the petitioners returned undelivered With postal remarks as "left". The petitioner did not approach for 3 years after expiry of First Block of EOP. Only in 07.03.2016, the petitioner approached the office for Block wise E0 extension. Therefor....
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....pecific case, the EPCG committee has taken a clear decision as an expert body to reject the request of the petitioner. The committee vide letter dated 04.12.2017 directed the petitioner to approach the RA Ahmedabad for applying for Extension in EOP under PN No. 36/25.12.2017. However, the conditions of the PN No. 36/25.12.2017 does not apply to the instant case as they were already granted EOP extension as per the EPCG committee decision. 15. With respect to the averments made in para 3.21 of the petition, it is stated that EPCG committee has given an opportunity to the petitioner to explain their matter. Based on the furnished explanation and the circumstances in this specific case, the EPCG committee as an expert body has taken a view to reject the request of the petitioner. The committee vide letter dated 04.12.2017 directed the petitioner to approach the RA Ahmedabad for applying for Extension in EOP under PN No. 36/25.12.2017. However, the conditions of the PN No. 36/25.12.2017 does not apply to the instant case as they were already granted EOP extension as per the EPCG committee decision. 16. With respect to the averments made in para 3.22 of the petition, it is submitt....
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.... under FTP/HBP. Further, it is submitted that the petitioner firm did not approach the DGFT in time. They approached on 07.03.2016 only. Further, period of extension would commence from the date of expiry of original export obligation period and not from the date of approval by the DGFT. Based on the above, it is submitted that the petition of the petitioner may kindly be dismissed and no relief as prayed for be granted." 4.00. Heard Mr.N.D. Nanavati, learned Senior Counsel appearing for the petitioners and Mr.Nikunt Raval, learned Counsel appearing for the respondents at length. Considered the material on record. 5.00. Mr.N.D. Nanavati, learned Senior Counsel has vehemently submitted that the respondent authority has granted extension for 2 years but from 28.3.2015 instead of the date of the extension order and the respondent authority ought to have granted extension prospectively and from the date of the order. It is further contended that by way of the the extension, the petitioners had only 2 to 3 months time. When the authority is granting extension for two years, authority ought to have granted such extension in such a manner that the petitioners would have 2 years ext....
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.... approached the office of the respondent No.2, explaining the circumstances and seeking remedy by way of extension of Expert Obligation period under the said authorization. On 5/3/2016 the petitioners made application seeking for extension of Export Obligation period. The petitioners thereafter deposited 2% of the duty saved on and in lieu thereof the petitioners on 16.06.2016 paid an amount of Rs. 3,64,985/- seeking for extension of two years of BOP. The Petitioners thereafter on 30.06.2016 wrote a letter to the EPCG Committee, requesting the respondent to consider the case of the petitioner for block-wise extension of the Export Obligation Period for two years. The Petitioners again wrote similar letter on 12.07.2016 to the respondent no. 2. The petitioner's case was placed before the Policy Relaxation Committee (PRC) in the office of DGFT at Delhi and upon considering the case of the Petitioners on 26.09.2016, the PRC recommended to the DG that relaxation be granted to the Petitioners in terms of Para 2.58 of the FTP 2015-20. On 04.10.2016, copy of minutes of the said meeting were received by the petitioners and thereafter on 06.10.2016 a letter was submitted to the of ECE respo....
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.... 31.08.2018 passed an order to provisionally release the goods subject to the condition that the Petitioner No. 1 shall execute a Bond for full value of goods i.e. Rs. 7,05,65,554/- and also furnish Security in the form of Bank Guarantee for an amount of Rs. 2,70,00,000/-. As per the petitioners, originally an amount of Rs. 28,05,000/- was given as Bank Guarantee at the time of issuance of the license and thereafter an amount of Rs. 2.70 Crores has been given as security by way of Bank Guarantee to the Customs Department towards the duty liability, which is sufficient to take care of total Duty Liability on the capital goods imported under EPCG Scheme. During the past one year, the petitioners have exported the goods worth around Rs. 89.4 lakhs, manufactured on the capital goods imported under the said Authorization, without availing the benefit of EPCG scheme and if given extension, they can fulfill their export obligation within a period of 2 years. 7.06. The EPCG Authorization - license came to be granted in favour of the petitioner vide order dated 28.3.2007. The said license was for a period of eight years i.e. 27.3.2015. As per the terms of the agreement, the petitioners ....
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.... representation dated 14.07.2017 addressed to DGFT Headquarters for second extension in EOP for three years the petitioner vide letter dated 04.12.2017 was advised to approach concerned RA for extension and even Public Notice No.36/2015-20 dated 25.10.2017 was issued to allow RAs to consider onetime relaxation for condonation of delay in submission of request for obtaining extension in Export Obligation period under EPCG. Earlier, the RAs were not able to consider requests for extension in Export Obligation Period (EOP) which are received beyond the prescribed time period. This provision did not grant powers to RA to grant extension in EOP beyond the prescribed period in Para 5.11(b) of HBP 2004-09. Therefore, request of the petitioner dated 09.12.2017 for second extension in EOP for two year from the date of endorsement was not considered by RA as there is no provision in FTP. The firm had an opportunity of further extension of two years on payment of 50% customs duty on unfulfilled EO. 7.07. In overall view of the matter, it is clear that the petitioner neither fulfilled the export obligations nor applied for extension in time even for the First Block and even the application f....