TMI Blog1980 (1) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... the Import Policy for Registered Exporters, as were permissible on the date of such contracts with overseas buyers. Under the said Policy in respect of the item falling under Entry K. 11(ii), there was value-restriction of 50% of the f.o.b. value of the exported item for the purpose of import replenishment. 4. Paragraph 146 of the Import Policy for the year 1978-1979 provides that a Registered Exporter is eligible to claim import replenishment at the same rate and for the import of the same items as were permissible on the date of the firm contract with the overseas party. 5. As mentioned above, the petitioners' contract was registered in the month of March 1978 and they were entitled to import replenishment at the rate of 50% of the f.o.b. value of the goods exported by them which felt within the Entry K. 11(ii) of the Import Policy for the year 1977-1978. Under the Import Policy for the year 1978-1979, certain quantity restrictions on the import of polyester-nylon yarn were introduced, but these quantity-restrictions were not put in respect of the exports covered by Entry K. 11(ii). 6. The petitioner-company obtained import licences as per the scheme of registration of con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the import of polyester filament yarn by the petitioners is concerned and the entitlement to exemption from duty was limited to 50% of f.o.b. Value. 8. A fresh notification in supersession of the earlier notifications granting exemptions from customs duty on imports of polyester/nylon filament yarn on exports of specified goods came to be issued on June 10, 1978. The only condition put by this new notification was that the importer must produce a certificate from the authorities issuing the licence or an endorsement by the said authorities on the licences specifying both the quantity and value of the nylon filament yarn or polyester filament yarn allowed to be imported under the licences against the exports of the product. It appears that in respect of the imports made by the petitioners in January 1979, the petitioners had applied on December 30, 1978, for an endorsement under the notification of July 15, 1977. Accordingly, only the value endorsement was made by the authorities on the licence. As mentioned above, by this time, the notification of June 19, 1978 came into force which required the endorsement of both the value and the quantity for exemption of duty with the result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to exemption from payment of excise duty in respect of the imports of Polyester filament yarn made by them subject to the condition that the petitioners should get their licences endorsed with value from the Import Export Controller. It is common ground that the petitioners' exports were covered by Entry K. 11(ii) and so far as the import replenishment in respect of which licences were issued to the petitioners, no quantity restrictions were put, and they could import the goods in question upto 50% of the f.o.b. value of the goods exported. The notification of June 19, 1978, issued under Section 25 of the Act, however, required the licences to be endorsed with value and quantity for exemption. However, in view of the fact that the petitioners were admittedly entitled to the import replenishment limited to 50% of the f.o.b. value without any restriction of the quantity the requirement of the endorsement regarding the quantity could not be said to apply to the import of the goods falling under Entry K. 11(ii) made by the petitioners. 11. This notification dated June 19, 1978 was issued in supersession of the earlier notification of July 1, 1977. The only material relevant change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Yarn/Polyester Filament Yarn to the extent of 1.2 kgs. against 1 kg. of the respective yarn certified to have been used in the product exported at 32% of the f.o.b. value of the respective exports. Both value and quantity shall be limiting factors............" The short question, therefore, that arises for consideration is whether the licensing authority was justified in making an endorsement of both the quantity and value on the petitioners' Licence in terms of the said paragraph 3 of the public notice, dated February 28, 1979, and whether the petitioners could be entitled to exemption from duty on the goods of the value of 50% of the f.o.b. value of the export, and the quantity would not be a relevant question. 12. Mr. Andhyarujina, the learned Counsel appearing for the petitioner, submitted that the petitioners were duly qualified for the import replenishment licences of the value of 50% of the f.o.b. value of the export. They had a registered contract in respect of the export of the goods falling under Item K. 11(ii) of the Policy. Under the said policy, they were entitled to import polyester filament yarn of the 50% value of the f.o.b. value of the goods exported by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ester filament yarn as envisaged in the Import Policy for the years in question has nothing to do with the policy of granting exemption of payment of duty under Section 25 of the Customs Act. In other words, he submitted that the imports limited to the value of 50% would be perfectly legitimate, but still that would not be a relevant consideration for applying the policy underlying the notification of June 19, 1978, under Section 25 of the Customs Act read with the public notice dated February 28, 1979. According to him, merely because the import of the goods is legal and permissible and is in conformity with the import policy, it does not necessarily follow that the petitioner was entitled to claim exemption from payment of duty under the notification issued under Section 25. Mr. Talyarkhan contended that the notification of June 19, 1978 envisaged a policy on the basis of which exemption for payment of duty could be claimed or granted and the policy was that the claimant was bound to obtain endorsement of the licensing authority both pertaining to the quantity and the value, and not merely the value, as was the case under the earlier notification dated July 1, 1977. He further co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some cases, the restriction relates only to the value irrespective of the quantity. In the cases where under the Import Policy the entitlement to the import replenishment licence is limited both to the quantity and value, it would be obviously necessary for the authorities issuing the licence to make an endorsement both relating to the quantity and value ; but so far as the cases where the permissible import is limited only to the value are concerned, there is no particular point in specifying the quantity of the goods. It was, however, urged by Mr. Talyarkhan that the Import Policy has no relevance for the purpose of determining the entitlement to exemption from duty under Section 25 and what has to be seen is whether the importer has complied with the conditions laid down in the notification. The importer, therefore, must obtain the endorsement relating both to the quantity and the value from the licensing authority. He even contended that it was entirely within the discretion of the licensing authority to make an endorsement of the quantity and value as he deems fit. In other words, he contended that the entitlement for import of a particular value or a particular quantity under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , at that time, the public notice of February 29, 1979 was not issued. There is no merit in this contention because it must be assumed that the licensing authorities were not aware of the fact that the notification of July 1,1977 was superseded by the notification of June 19, 1978. It is obvious that the endorsement must be treated as one being made on the basis of the Notification of June 19, 1978. If that is so, the endorsement, though restricted to value, was sufficient and valid, because the endorsement regarding quantity was not material in any event till the public notice of February 28, 1979. It is not the case of the respondents that till at least the public notice dated February 28, 1979, there was any restriction limited to quantity. The rejection of the claim of the petitioners for exemption from duty, under the circumstances, on the technical point of effective endorsement is unjustified. 15. His contention that the licensing authority had absolute discretion to endorse the quantity and/or value is without any merit. As indicated above, the guidelines are indicated in the various notifications issued under Section 25. The notification of June 19, 1978 and the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aragraph 2 of the public notice provides for certain amendment in the new Import Policy for 1978-79, but that is in respect of the items at Serial Nos. K. 11(iii), K. 13(ii), K. 13(iii), K. 13(iv) and Sl. No. 0.6, and there is no charge so far as the exported items referred to in Sr. No. K. 11(ii). Further paragraph 3 provides that in order to enable the eligible exporters to get the benefit of the notification dated June 19, 1978, it has been decided to grant import replenishment licences against the exports of products referred to in the said notification, made on or after 1-4-1978, to enable imports of Nylon Filament Yarn/Polyester Filament Yarn to the extent of 1.2 kgs. against 1 kg. of the respective yarn certified to have been used in the product exported at 32% of the f.o.b. value of the respective exports, both the value and the quantity being made the limiting factor. Assuming that this change of policy contained in paragraph 3 of the public notice is intended to affect the import replenishment licences against the export of items at Sr. No. K. 11(ii), the policy contained therein cannot apply retrospectively. In terms, it appears to be of prospective application to cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fair reading of the public notice dated February 28, 1979 it is noticed that the intention was to amend entries at Serial Numbers K. 11(iii), K. 13(ii), K. 13(iii), K. 13(iv) in Appendix 17 of the Import Policy for the year 1978-79. Even under the policy prior to the amendment by the public notice, permissible import replenishments for Items falling under the said entries were limited both to value and quantity. It appears that the public notice was intended to affect some of the items in respect of which even before the public notice, the import replenishment was limited to both value and quantity and not only to value as in the case of Item K. 11(ii) with which we are concerned. I, therefore, reject the contention of the respondents that the public notice of February 28, 1979 affects the petitioners' right to claim exemption from duty in respect of the import replenishments to which they are entitled under Entry K. 11 (ii), in respect of the exports under the registered contracts dated March 23, 1978 and March 29, 1978. They would be entitled to full exemption from payment of duty limited to the 50% of the f.o.b. value of the exported goods. 19. Taking any view of the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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