TMI Blog2001 (5) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... eme under which the petitioners are entitled to duty credit of 18 per cent of the Free on Board (FOB) value of export specially to the limitation of 50 per cent of the Present Market Value (PMV) of the goods in question. The export of the goods is made under AR 4 form issued by the Excise Authorities under Customs Notification No. 69/97. The petitioner declared FOB price of US Dollar $ 953694 and PMV at Rs. 4,40,70,280/-. After making the enquiry, on 4th August, 1999 Shipping Bills were finally accepted by the Customs Authority on the basis of declared PMV. The petitioners obtained copies of Shipping Bills and applied to the Licencing Authority i.e. Director General of Foreign Trade (DGFT) under Ministry of Commerce and on 10th September, 1999, Licencing Authority issued DEPB Licences. 3.On 30th November, 1999 the Customs Authority issued a Circular for verification of DEPB in view of the few instances of forged DEPB which came into circulation. Under the circular DEPB was required to be submitted for verification for the purpose of ascertaining the authenticity/genuineness of the Shipping documents and DEPB only. Under the circular within 48 hours after verification, DEPB licenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s own Rule Order. It has power of search, seizure, penalty, confiscation, suspension, cancellation, adjudication, Appeal, Revision etc. in respect of relevant licences. The impugned Circular being No. 23/99-Cus., dated 11th May, 1999 does not have any statutory force. The benefit of the licences under the Act cannot be taken away by such circular. 6.Customs Authorities and Licensing Authorities operate in distinct and different fields. One cannot sit in appeal over the other. Therefore, it is high time to verify the issue as to how far the Customs Authority can encroach upon the field specially in the given situation. If I go through the two circulars being Circular No. 14/99-Cus., dated 15th March, 1999 and Circular No. 23/99-Cus., dated 11th May, 1999 it will be seen that the first circular is an independent one whereas the second circular is an amended one of the previous Circulars No. 69/97-Cus., dated 8th December, 1997 and Circular No. 79/98-Cus., dated 22nd October, 1998. There is a standing order in respect of revised procedure for verification of DEPB scrips under the first Circular. It appears from Clause 5 of such standing order that on receipt of files duly counter- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduction, a standing order for revised procedure for verification of DEPB scrips has been introduced in the circular itself and when the petitioners were called upon to produce the same before the appropriate authority for verification they hold up beyond the fixed period given under Clause 5 of such standing order for the self-same purpose ignoring the circular and standing order and by giving effect of the revised Circular No. 23/99-Cus., dated 11th May, 1999 arising out of Circular Nos. 69/97-Cus. and 79/98-Cus., dated as above. 8.Even thereafter, if I verify such circular dated 11th of May, 1999 I shall be able to find out that certain time limit is prescribed in respect of involvement of fraud/collusion/wilful mis-statement/or suppression of facts as regards determination of present market value of the goods. But one has to understand the true import of circular. From the paragraph 3 of such circular it is crystal clear that in such cases consignment should be allowed provisional clearance and the Shipping Bills will also be assessed provisionally. Such Shipping Bills will not be entitled to DEPB scrips till the market enquiry is completed and the provisionally assessed Ship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... override a legislative enactment. 11.The respondent has taken a very peculiar stand. According to him, FOB value of the consignment was described as "Steel Welding Electrodes". But from examination it was found that the goods are in fact made by "Mild Steel" when the value was declared on account of "Stainless Steel Electrode". Therefore, from the plain reading I fail to understand even from their affidavit itself where is the suppression of material facts. The goods are described as "Steel Welding Electrodes". Neither it has been described as "Mild Steel" or "Stainless Steel Electrode". The value was given accordingly. It has been checked up by the Customs Authorities themselves who allowed the goods to be exported. Initially provisional and subsequently final assessment was made. PMV was accepted. DEPB licences were issued by the appropriate Licencing Authority on the basis of the application or applications. Under such circumstances, I fail to accept the stand of the Customs Authority even observing the situation pedantically. Export can not be an unilateral action. It is bilateral action in which an expertise body of the Government of India involved who in term, granting san ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to give impetus to the export which is a part of modernisation of trade and commerce on the particular basis. If authorities are unhappy then can easily propose to the legislature either for amendment or repeal or re-introduction of fresh policy to overcome the situation. But liberalisation and regidity both can not run simultaneously. Either one has to be given up. Therefore when such policy of the legislature exists, by virtue of constitutional mandate, administration can not override the same. One of such policy is to verify the DEPB Scrips within 3 days as prescribed under the standing order and the words 'should be completed' mandatorily binding upon the authority in doing so. Such period of withholding DEPB Scrips might have been permitted beyond the period only on several conditions as given in the Circular No. 23/99-Cus., dated 11th May, 1999 itself. First of such conditions is Commissioner of Customs is to be satisfied that an enquiry for determining the PMV of the goods, period will be extended by reason of involvement of fraud etc. which shall be recorded by him in writing. Second condition is in such cases consignment should be allowed provisionally and shipping bills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e who alleges fraud must do so promptly. That in the reason for which a substantial gap of time is given in between provisional clearance and final clearance. Moreover, final clearance by the Investigating Authority can not be construed as judgment or order obtained by fraud from constitutional, statutory or administrative decision making authority particularly when export was made finally following the policy of the Government of India under a different Act i.e. The Foreign Trade (Development and Regulation) Act, 1992. Therefore, it is very difficult to convert an aggrieved to an accused without foundation. 14.By citing another judgment reported in 1997 (90) E.L.T. 31 (Cal.) (Collector of Customs v. Pankaj Sheth) learned Counsel appearing for the respondents contended before this Court that the factual basis of such case has to be taken into account before passing the final order herein. The first two paragraphs of such judgement have given the factual background on which the Division Bench of this court was pleased to proceed with the matters. Such paragraphs are quoted hereunder : "The basic issue involved in this appeal is whether the customs authorities have the right to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act at that stage but not after final assessment which the respondents failed to understand and misapplied the same. It is to be remembered that jurisdiction can be applied when it is available but it can not be applied when it is not available otherwise it will be treated as exceeding the jurisdiction what exactly happened in the present case. If both the factual matrix are compared it will be seen that the case of the Division Bench was proceded at the provisional stage and that too after issuance of show cause notice unlike the present case after final assessment by way of withholding DEPB Scrips beyond the prescribed mandatory period of verification. Thus, both the cases are significantly different from each other. In such circumstances, withholding a licence of a trader for an indefinite period cannot be construed as an act of fair play on the part of the Statutory Authority. 16.Therefore, it is a clear case of violation of Article 19(1)(g) read with Article 301 of the Constitution of India. As a result whereof I allow the writ petition. Due to long withholding of DEPB licences by the customs authority, at an interim stage the petitioners made a prayer to release DEPB S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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