TMI Blog1997 (11) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... icate in terms of the applications made by him. The respondent in the present appeals, who is the petitioner in both the writ petitions, is engaged in the manufacture and export of "unmanufactured tobacco". For the purpose of exporting such "unmanufactured tobacco", the petitioner had to import corrugated fibre board boxes of specified quality from foreign countries. By virtue of the import and export policy for the period from April, 1990 to March, 1993, if any material is imported for the purpose of manufacture and export of any commodity after adding value, no duty is chargeable on the import of such products. The importer had, however, to apply for Advance Licence which would also mention the resultant product in Part-E of Duty Exemption Entitlement Certificate Book and the Export Obligation in terms of the FOB value of the export and condition sheet attached to the licence mentions the export obligation in terms of quantity of unmanufactured tobacco. 3. Chapter XIX of the Policy Book deals with the duty exemption scheme. The object of the scheme is to make available to the registered exporters the necessary inputs needed for export production at international prices wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,32,000 Kgs., the respondent actually exported only 38,61,489 Kgs. filled in all the 20,160 imported Corrugated Fibre Board Boxes. The shortfall in terms of quantity of the export of unmanufactured tobacco was, therefore, to a tune of 1,70,511 Kgs. which amounts to 2.3% shortfall. As far as the value is concerned, even though the export obligation in terms of rupees was to a tune of Rs. 8,06,40,000/-, the actual value of the exports achieved by the respondent was to a tune of Rs. 30,40,13,000/-. Subsequently, the respondent, after completing the export of the commodities, put in an application on 28-11-1991 for redemption of legal undertaking and the customs authority issued 'no objection certificate', which was submitted to the authorities on 20-2-1992. The legal undertaking was redeemed on 11-6-1992. Thereafter, the respondent made an application on 20-7-1992 to the first respondent for grant of Entitlement Certificate under Special REP facility contained in paragraph 244 of the Policy Book. But the first appellant passed the impugned orders dated 9-2-1993 rejecting such request for grant of Special REP Entitlement Certificate stating that such request cannot be considered. Quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The applications made by the petitioner on 13-8-1992 and 20-7-1992 to the first respondent for Special REP entitlement certificates pertaining to the advance licences granted on 27-2-1991 and 7-9-1990 respectively, stand allowed and consequently, the first respondent is directed to issue Special REP entitlement certificates to the petitioner pursuant to the said applications; and 3. The petitioner shall be entitled for payment of premium amounts pursuant to the applications made by it on 30-7-1993 in terms of Circular No. 11/93 dated 5-5-1993." 7. Questioning the said findings given and orders passed by the learned Single Judge, the present writ appeals are filed by the appellants, who are respondents in the writ petitions. As the point involved for consideration in both the writ appeals is the same, they are heard together and are being disposed of by this common order. 8. The factual aspects are not disputed in both the cases. The respondent is an exporter of unmanufactured tobacco and for the purpose of exporting such tobacco, he had obtained advance licences for import of Corrugated Fibre Board Boxes. Customs duty on such import of Corrugated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re to be used by such manufacturers and exporters for the purpose of effecting the exports; that the basic concerns and objectives of the said scheme are that the imported inputs which are imported under the advance licence and utilised for the purpose of exporting the goods; that in both the present cases such basic objectives have been realised and fulfilled inasmuch as all the Corrugated Fibre Board Boxes which were imported were in fact utilised for exporting the unmanufactured tobacco, for which purpose the boxes were permitted to be imported and that the value of such exported unmanufactured tobacco was more than the value contemplated under the advance licences granted to him and that, therefore, there is no violation of any terms and conditions imposed under the advance licensing system and he is, therefore, entitled for grant of entitlement certificate under Special REP facility claiming the benefits of Special REP facility. To this extent, the contention of the respondent is not disputed. The dispute in both the cases relates only regarding the effect of the shortfall in the quantity of the unmanufactured tobacco that was exported and the said, shortfall is to an extent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ton and not with reference to the over all weight of the quantity that is exported; that if the intention of the authorities in introducing such clause in the Advance Licences was only with reference to the overall quantity of the exported commodity, there would not have been any necessity to refer to "each carton 200 Kgs. +/-5%" and they would have stated in the clause that the total quantity of the exported commodity shall be "+/-5%". He, therefore, contends that the said clause has to be interpreted so as to mean that it refers to the quantity of the commodity that is packed in each carton and not to the weight of the total commodity that is exported. Such contention of the learned counsel for the appellants has to be accepted in view of the wording used in the said clause specifying that each carton must be packed with commodity weighing 200 Kgs. but giving a margin of "+/-5%". 11. The Advance Licences in both the cases were issued with certain conditions along with DEEC Book. The conditions stipulated in the Licences were that the exporter should export 40,32,000 Kgs. with FOB value of Rs. 8,06,40,000/- in the first case and 68,02,200 Kgs. with FOB value of Rs. 14,11,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the quantity of the exported commodity, the first appellant had rejected the applications made by the respondent for grant of Entitlement Certificate to claim the Special REP benefits by passing the impugned orders dated 9-2-1993 and 3-2-1993 respectively in the two cases. 12. The question that next arises for consideration in this connection is whether the first appellant was justified in rejecting the applications made by the respondent for grant of Entitlement Certificate under Special REP facility in toto on ground that there was such shortfall in the quantity of exported commodity. As already stated above, as per the terms and conditions of the Advance Licences granted to the respondent and as per the export and import policy that was prevailing during the relevant period and as per the export obligations, the respondent, who was permitted to import 20,160 Corrugated Fibre Board Boxes in the first case and 34,011 Boxes in the second case, completely utilised the said boxes for exporting the unmanufactured tobacco. Therefore, it is not a case where such imported material, on which exemption from payment of customs duty was claimed, was not utilised either in full or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat too when the value of the exported commodity was more than three times of the specified FOB value of the commodity. 13. The basis object of the Advance Licensing System and the Duty Exemption Scheme as contained in Chapter XIX of the Import-Export Policy 1990-93, is to ensure that Indian manufacturers and business people should earn foreign exchange for the country by the promotion of exports and it is for that purpose the facility of securing imported raw materials duty free was made available. The basic concern and objective of such scheme is that of the material imported under the advance licensing system is utilised in the production of goods for exports and the manufacturers shall earn the prescribed or stipulated amount of foreign exchange from the export of the finished goods. Such objectives are duly fulfilled in the present cases inasmuch as all the imported boxes were actually utilised for exporting the unmanufactured tobacco and the value of the exported commodity far exceeded the specified FOB value of such commodity. The only lapse on the part of the respondent in exporting the commodity is shortfall in the quantity of such exported commodity. The responden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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