2001 (10) TMI 673 - HC - Customs

Summary

Issues Involved:
1. Applicability of the revised value addition formula under the Export and Import Policy (Exim Policy) 1992-97.
2. Entitlement of Domestic Tariff Area (DTA) sale for the period from 6th January 1994 to 30th June 1995.
3. Calculation and approval of value addition for the concerned period.
4. Interim orders and their impact on the final decision.

Issue-wise Detailed Analysis:

1. Applicability of the Revised Value Addition Formula:
The core issue is the applicability of the revised value addition formula under Paragraph 119 of the Exim Policy 1992-97. The Petitioners contended that the formula effective from 1st April 1993 should apply to their DTA sale entitlement. The Exim Policy was revised by a Notification dated 16th August 1993, allowing existing units to opt for the new value addition criteria within three months from the date of the public notice. The Petitioners initially opted for the new formula by an application dated 29th December 1993 but later withdrew this option. Consequently, they continued to be governed by the old formula until 31st March 1995, as confirmed by the Development Commissioner's order dated 24th November 1995.

2. Entitlement of DTA Sale for the Period from 6th January 1994 to 30th June 1995:
The Petitioners were aggrieved by the Development Commissioner's order regarding their DTA sale entitlement. The Petitioners' entitlement was calculated based on the old value addition formula until 31st March 1995 and the revised formula thereafter. The Development Commissioner's order detailed the Petitioners' entitlement for each quarter, noting that for some quarters, the Petitioners achieved negative value addition and were not entitled to any DTA sale.

3. Calculation and Approval of Value Addition:
The Development Commissioner calculated the value addition for various periods, considering the consumption of indigenous raw materials. The Petitioners were required to maintain a minimum value addition of 37.72% initially, which was later revised to 38.22%. After opting for the new formula, the revised value addition was approved at 30.03% for the period from 1st April 1995 to 31st March 2000. The Development Commissioner's order dated 24th November 1995 meticulously detailed the Petitioners' entitlement for each quarter, including the periods where they achieved negative value addition.

4. Interim Orders and Their Impact on the Final Decision:
During the pendency of the Writ Petition, several interim orders were passed. The interim order dated 30th July 1997 by the High Court was implemented, and the Apex Court observed that these orders were ad hoc and subject to the final decision. The Development Commissioner's order dated 24th November 1995, passed after rescrutiny, became the operative order. The Court noted that the balance of Rs. 407.10 lakhs, representing excess DTA sale availed by the Petitioners, should be adjusted against their future entitlements.

Conclusion:
The High Court dismissed the Writ Petition, upholding the Development Commissioner's calculations and decisions. The Court directed the Respondents to adjust the excess DTA sale of Rs. 407.10 lakhs against the Petitioners' future entitlements. The interim orders were deemed to be ad hoc and did not affect the final decision. The Rule was disposed of accordingly, with no order as to costs.