TMI Blog2005 (9) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... 07). 3. Under the provisions of the Foreign Trade (Development and Regulation) Act, 1992 (for short the Act ) the Government has issued an Export and Import Policy for the period 2002-07 (for short the policy ). The policy is also accompanied by the Hand Book of Procedures for implementation of the policy. It is in pursuance of this policy and the Hand Book, the activities of import and export are regulated and monitored. The petitioner contends that in view of the provisions relating to the promotional measures set out in para 3.7.2. l(vi) of the policy read with para 3.2.5 of the Hand Book, the petitioner being a recognized status holder is entitled to the benefits mentioned therein. Based on the promise of those benefits, the petitioner undertook steps to increase exports by massive reduction in the pricing of its products to make them competitive in the international markets. In view of the reduction in the price, several foreign companies have placed substantial orders, for purchase from the petitioners. To satisfy those orders petitioner had to enhance its production capacity by employing greater work force and additional machinery thereby making substantial investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insert certain paragraphs of the public notice dated 28-1-2004 into the policy by correcting notification dated 21-4-2004. Challenging the said notification the petitioner has preferred the other writ petition No. 27561/2004. 4. Respondents after notice have filed their counter. They contend that no promise was held out by the respondent by the issuance of policy as the policy could be amended or rescinded by the respondents at any point of time in public interest. They have denied the so called substantial investments made by the petitioner consequent to the policy in question. They contend that 100% EOUs are ab initio exempted from duties for the inputs, machinery, office equipments, etc., being imported or procured from the domestic market. The impugned notification and public notice have been issued in public interest to deny the benefit of the scheme to those who have resorted to exports of certain categories of goods or exported in a way which would not have been entitled to otherwise. The clarification made always relates back to the date of issuance of the original scheme. Respondent No. 1 is empowered to amend the policy in public interest. The impugned notification and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n issued excluding E.O.U. units and gold, silver in any form including plain jewellery thereof from being taking into consideration to calculate the total value of the exports is contrary to the policy decision. When acting on the said policy decision they have altered their positions, made huge investments and reduced. the cost of their products on the basis of which when huge orders are placed and they have exported the products, the impugned notifications would seriously affect the interest of the petitioner. Therefore, the respondents have to be held to their promise and the doctrine of promissory estoppel as well as legitimate expectation squarely applies to the facts of this case. At any rate when the petitioners have altered their position and acted on the representations made by the respondents these notifications cannot be given retrospective effect. 7. Per contra, the Learned Counsel for respondent-1 contends if the object of the exim policy is kept in mind it is clear that the incentives given to an exporter under 3.7.2.1 (vi) was not intended to an exporter to whom already 100% benefit of duty has been extended under Chapter VI of the policy. What the respondents pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estoppel against the State Government. The representation was made by the highest authorities including the finance minister in his budget speech after considering the financial implications of the grant of the exemption to milk. It was found that the overall benefit of the State's economy and the public would be greater if the exemption were allowed. The respondents have passed on the benefit of that exemption by providing various facilities and concessions for the upliftment of the milk producers. This has not been denied. It would, in the circumstances, be inequitable to allow the State Government now to resile from its decision to exempt milk and demand purchase tax with retrospective effect from 1-4-1996 as the respondents cannot in any event readjust the expenditure already made. 10. The Supreme Court in the case of S.B. International Limited and Ors. v. Assistant Director General of Foreign Trade and Ors., 1996(82)ELT164(SC) . dealing with the right of an exporter or an importer held that, the object behind the scheme is to enable the exporter to import raw materials, components etc., required for the purpose of producing goods for export. It is a facility provided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the applicant to plead and prove to the satisfaction of the Court that the refusal was vitiated by the above factors. When the Government are satisfied that change in the policy was necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The Court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine priorities in the matters of allocations or allotments or utilization of its finances in the public interest. The Government are not barred by the promises or legitimate expectations from evolving new policy. 12. A Division Bench of the Gujarat High Court in the case of Adani Exports Limited v. Union of India, Special Civil Application No. 1676/2004 have upheld the impugned notifications though on the facts of that particular case relief is granted holding that the impugned notifications cannot be retrospective. 13. In exercise of the powers conferred under Section 5 of the Act, the Central Government has notified the Export and Import Policy for the period 2002-2007. This policy came into force with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exports for the period from 1-4-2003 to 31-3-2004 would be entitled to the aforesaid benefits. However, the benefit of the aforesaid scheme would be available to the Status holders with effect from 1 -4-2004. 15. Being a new initiative, a large number of representations were received from Trade Associations/Export Promotion Councils as well as the individual exporters seeking clarifications on various points relating to the implementation of the scheme. At the same time, the Government also received representations that some status holders are trying to increase their export turnover by taking credits for the export of others without putting any significant efforts to increasing exports. Such diversion/enhancement of exports merely to increase benefit under the Scheme in this manner would not lead to the intended objectives of incremental growth in exports. Such transactions amount to misuse of the Scheme. Therefore, it became necessary for the Government to lay down specific norms for the implementation of the scheme. Therefore by notification dated 28-1-2004 several notes were inserted. Note No. 1 was inserted for the purpose of calculating the value of exports. It provided w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complex economic matters, the every decision is necessarily empiric and it is based on experimentation or what one may call 'trial and error method'. Therefore its validity cannot be tested on any rigid 'a priori' considerations or on the application of any strait-jacket formula. The Court cannot strike down a policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The Court an interfere only if the policy decision is patently arbitrary, discriminatory or malafide. In matters of trade or commerce or economic policy, the wisdom of the Government must be respected and Courts cannot lightly interfere with the same unless such policy is contrary to the provisions of the Constitution or any law or if such policy is wholly arbitrary. 18. If we look at the policy document as a whole, it is clear in order to boost a sustained economic growth certain new and special facilities were given to the status holders. In other words, they were not entitled to such new and special facilities but for this policy. As is clear from Chapter-Ill it was a promotional measure. Para 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tte, the export and import policy and may also, in like manner, amend that policy. Therefore, the power of the Central Government to amend the policy during the currency of the policy finds statutory recognition in Section 5 of the Act. The policy itself categorically states that the Central Government reserved the right in public interest to make any amendment to this policy in exercise of power conferred by Section 5 of the Act. The only condition to be fulfilled is that such an amendment shall be made by means of a notification published in the Gazette of India. In the nature of things, this policy has been formulated by the Central Government with the object of stimulating the sustained economic growth. Certain amount of 'trial and error method' is bound to be there. Though this policy will be in force for a period of 5 years, every year the policy is reviewed and the said policy could be changed at any time depending upon the exigencies of the situation and the necessity. In other words, during the currency of the Policy the Government has the power to alter, modify and change the Policy. The notifications sets out, the circumstances under which the amendment is brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contracts entered into; amounts invested in machinery and men; exports made; and its value. The respondents have denied those allegations. In fact the petitioners have also filed a rejoinder. Even there, these particulars are conspicuously missing. Mere assertion that he has altered the position to his detriment because of the representation has remained as a plea only. Unless the material is placed before the Court to substantiate the said plea, the petitioner is not entitled to any benefit based on the plea of promissory estoppel or legitimate expectation. To invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bad expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. The doctrine of promissory estoppel cannot be invoked in the abstract and the Courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while consid ..... 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