TMI Blog1989 (3) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Government of India. 3. In order to boost exports, the Government of India has been announcing from time to time several incentive schemes. One such scheme as laid down in the Import Policy of the Government of India for the period 1985 is the scheme under which a manufacturer-exporter like the petitioner is granted, inter alia. Advance licences for import of raw materials required for the purpose of manufacturing finished products which are to be exported, without payment of any Customs Duties thereon subject to the said manufacturer-exporter satisfying the conditions therefor laid down in the said scheme. The said scheme is known as "The Duty Exemption Scheme" and is contained the Chapter XVI, Appendix 19 of the Import Policy, 1985-88 (hereinafter referred to as "the said Import Policy"). The same Scheme was also prevalent in the earlier Import Policies of the Government of India including the Import Policy for the period 1983-84. Therein also Appendix 19 of the said Import Policy, 1983-84 provided for such a Scheme. 4. Every Advance Licence issued under the aforesaid Scheme of the 1983-84 Import Policy as well as the Import Policy of 1985-88 was subject to an export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t mistakes on the part of both the petitioner and the respondents there were errors in both the C.I.F. value of the raw materials imported and consequently the F.O.B. value of the finished products to be exported. This was because of error in the quantity of the raw materials to be imported. Consequently there was error in the quantity of the export materials to be exported. 10. By a letter dated 7th August 1985 the petitioner drew the attention of the third respondent to the aforesaid error and requested issuance of necessary directions to the second respondent for effecting necessary correctness in the D.E.E.C. Book as well as in all the other relevant documents. 11. By a letter dated 6th November 1985 the petitioner approached the third respondent and requested for effecting necessary reduction of export obligation and making necessary endorsement in this regard in the D.E.E.C. Book and the Licence which wore enclosed with the said letter. 12. In the meanwhile the export obligation period having expired the petitioner made applications to the third respondent who duly granted such extension. The last of the such extensions was granted on 10th December 1986. 13. By the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner to obtain any 'No Objection Certificate' from the Customs Authorities. 19. The petitioner received a communication dated 18th May 1987 from the first respondent calling upon the petitioner to submit the DEEC Book for further consideration. In response thereto the petitioner submitted the DEEC Book for necessary amendment in DEEC Book and the licence. 20. On or about June 8, 1987 the petitioner received the DEEC Book duly amended wherein the C.I.F. value of Licence Quantity of Import Export obligation was corrected but the F.O.B. value of Export obligation was not properly corrected vide letter No. II/500/87, dated 1-6-1986 of the petitioner. The petitioner thereafter duly approached the Customs Authorities and the Customs Duties along with interest on the exempt quantity of raw materials which was unaccounted for in terms of the aforesaid directions of the respondents, as would be evident from the receipt dated 1st September 1987 issued by the Customs Department in this regard. 21. Thereafter the Customs Authorities duly endorsed the DEEC Book with 'No Objection Certificate' part 'M' thereof. By a letter dated 5th October 1987 the petitioner submitted the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items other than Group L-7(i) would not be accepted. 26. The petitioner has challenged the aforesaid two orders or directions of the respondents as contained in the said communications dated 17th December, 1987 and 10th February 1988. 27. The contention is that the said orders are arbitrary and illegal and without and/or excess of jurisdiction. It is the contention that the respondents have no jurisdiction to demand from the petitioner Import Replenishment Licence in the manner sought for by the said orders. 28. This contention has to be decided in light of the facts and circumstances as narrated hereinbefore and the relevant Import Policy. 29. Appendix 19 of both the Import Policies of 1983-84 and 1985-88 deals with issuance of Advance Licence under the Duty Exemption Scheme and the consequent obligations in terms thereof. 30. Para 20 of Appendix 19 of Import Policy 1983-84 reads as follows: "Where for one reason or the other, exports to the extent as specified in the Duty Exemption Entitlement Certificate do not take place, after grant of extensions in the period of export obligation, the manufacturer shall pay to the Customs Authority the Duty on the proportionate qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ually paid. The defaulting licensee will take the above actions within a month from the date of any order issued by the licensing authority concerned. (4) If the default licensee fails to act according to the provisions in sub-para (3) above, the licensing authority shall recover the amounts and value of such REP licences due from export entitlements due to the defaulting exporter. The Customs authorities shall also take suitable action for recovery of Customs or other duties and interest thereon under Section 142 of the Customs Act, 1962. These actions shall be without prejudice to any action that may be taken against the defaulter exporter under the Import Export (Control) Act, 1947 and the order issued thereunder. (5) Any follow-up or penal action initiated by the licensing authorities shall not be discontinued unless these are stayed or set aside by the appellate authorities concerned." ", The relevant provisions in this regard in the Handbook of Import Export Procedure for the period 1983-84 and 1985-88 are contained in paras 80 to 82 and para 350 (prior to 1st June 1987) respectively. 32. Para 82 of the Handbook of Import Export Procedures, 1983-84 read as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d necessary direct any regional licensing authority to take prior approval of the Advance Licences Committee, for the grant of the Advance licence. (6) Before clearance of the first consignment of the goods against the advance licences or before obtaining supplies of the goods against a Release Order, as the case may be, the party shall be required to execute an export bond (vide Appendix 38) with the licensing authority concerned. This will be a Combined export bond both for the purpose of customs duty exemption and for ITC purpose. The provisions made in sub-paras (19), (11) and (12) of Para 81 above will apply in such cases. (7) Where an exporter has obtained an advance licence, the exports made by him from the date of receipt of the advance licence application by the licensing authority, may be accepted towards the discharge of the table and have been duly endorsed by the customs authority in the relevant Duty Exemption Entitlement Certificate. This facility cannot be claimed by an exporter as a matter of right. (8) Where the export obligation against an advance licence has been fulfilled in part before the importation of the first consignment against the advance licence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hartered Engineer, Project Authorities and DGTD are given in Appendix XVI-F G respectively to this Book." 33. By the Public Notices No. 182/85-88, dated 1st June 1987 the third respondent amended para 29 of the 1985-88 Import Policy and added a new para 350A in the Handbook of Import Export Procedures of 1985-88. 34. There is no dispute that the Import Licence in question was issued to the petitioner during the Policy period 1983-84. This licence was covered by the Import Policy 1983-84. Thus the extent of export obligation of the petitioner as well as the consequence for non-fulfilment thereof should be considered in accordance with the provisions in this regard contained in the 1983-84 Import Policy and/or the Handbook of Import and Export Procedures. The provisions of 1985-88 Import Policy or the Handbook of Import Export Procedure of 1985-88 can have no application whatsoever to the instant case. The rights and obligations of parties must be regulated by the 1983-84 Import Policy which governed the import of raw materials and corresponding export of the finished products under the licence issued under the said policy. 35. In para 20 of the 1983-84 Import Policy it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t June 1987 and the amendment effected thereby in the said Import Policy and/or the said Handbook cannot affect the instant case. 39. I have already extracted the requirements of para 29 of the said Import Policy as well as para 350 of the said Handbook as they existed on 30th August 1986 (in fact upto 31st May 1987) which deal with case like the instant one. The petitioner having satisfied the aforesaid requirements the petitioner cannot be required to surrender any further Import Replenishment Licence. As a matter of fact by the letter dated 10th December 1986 the third respondent clearly required the petitioner to comply with the requirements as contained in para 29 of the said Import Policy and/or para 350 of the said Handbook. The petitioner was directed to "pay immediately Customs Duty with interest on the unaccounted for material for import and also surrender valid REP Licences issued for Non-OGL items to cover unfulfilled portions of the export obligations". The petitioner having complied with those directions, cannot be further penalised. 40. The Public Notice dated 1st June 1987 seeks to amend the said Import Policy and the said Handbook in the manner contained therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 1,16,656/-. The same respondents are requiring the petitioner to surrender, for non-fulfilling more or less 5% its export obligation, Replenishment Licences worth Rs. 2,42,412/- which is an incredible and unheard of proposition. 43. In the instant case the second respondent has been acting all through arbitrarily, causing thereby avoidable harassment and loss and prejudice to the petitioner. As would be evident from the facts stated hereinabove, in spite of directions of the third respondent to make necessary amendments in the Advance Licence and the DEEC Book, inter alia as regards the export obligation amount and value on one pretext or the other the second respondent delayed such amendments for a period of more or less 9 months, thereby compelling the petitioner to pay interest at the rate of 18% to the Customs Authorities for a period of more or less 9 months after December 1986 when the petitioner had clearly received directions for the third respondent calling upon it to pay Customs Duty with interest on the unaccounted materials for import. By reason and such action of the first respondent No. 1 and/or the second respondent the petitioner could make payment only on 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
