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2007 (10) TMI 504 - HC - Indian LawsEXIM - duty exemption under the Special Imprest Licence - Held that - As the Petitioner had produced sufficient materials in the form of originals of Bill of Entry, Invoices, Payment advise and Certificates of Project Authority, to substantiate its claim that the deemed export obligation had in fact been fulfilled. It is a matter of record that import and such obligations were satisfied so far as supply of stainless steel drums were concerned. These facts have been completely ignored in the impugned order. Besides the most crucial fact i.e. that the contract had been performed and all 9 Stainless Steel Barrels supplied to NDBB and even payment released to it upon satisfaction by the customer (i.e. NDBB) clinches the issue. The Project Authority in unequivocal terms has deposed before the Court that the quantities contracted for were supplied to it and the Petitioner was paid for doing this. In view of the above discussion impugned order is in error of law in holding that the Petitioner was not entitled to claim the benefits of the duty exemption under the Special Imprest Licence. Likewise, the direction to pay to the Customs Authorities duty to the proportionate quantity of exempt material with interest, affirmed by the impugned order, and the forfeiture order dated 21-11-1994 as upheld in the impugned order cannot be sustained. They are accordingly set aside.
Issues Involved:
1. Quashing of the Joint Director General of Foreign Trade's order dated 24-1-1997. 2. Non-fulfillment of export obligation under the Import License. 3. Non-submission of DEEC (EXPORT) Book. 4. Non-receipt of payment against supplies. 5. Supply of goods beyond the export obligation period. 6. Forfeiture of Bank Guarantee and enforcement of Legal Agreement. Issue-wise Detailed Analysis: 1. Quashing of the Joint Director General of Foreign Trade's order dated 24-1-1997: The petitioner sought to quash the order of the Joint Director General of Foreign Trade dated 24-1-1997, which upheld the forfeiture order dated 22-11-1994. The petitioner argued that the impugned order showed non-application of mind to the facts of the case and mechanically justified the forfeiture orders. The court found that the impugned order was in error of law in holding that the petitioner was not entitled to claim the benefits of the duty exemption under the Special Imprest Licence. 2. Non-fulfillment of export obligation under the Import License: The petitioner was required to export Stainless Steel Barrels to NDDB within nine months as per the Import License. The petitioner argued that it had fulfilled its export obligation by supplying 9 Stainless Steel Barrels to NDDB. The court found that the petitioner had produced sufficient materials, including originals of Bill of Entry, Invoices, Payment advise, and Certificates of Project Authority, to substantiate its claim that the deemed export obligation had been fulfilled. 3. Non-submission of DEEC (EXPORT) Book: The Joint Director General of Foreign Trade rejected the petitioner's claim on the grounds that it had failed to produce the DEEC (EXPORT) Book. The petitioner argued that the DEEC Book was already on the record of the original file of the office of Joint Chief Controller of Imports and Exports (CLA). The court found that the petitioner had produced sufficient materials to substantiate its claim and that the DEEC Book was not the only document that could be relied upon for proper compliance of the obligation. 4. Non-receipt of payment against supplies: The petitioner argued that it had received payment for the supplies made to NDDB. The court found that the petitioner had produced relevant documents issued by NDDB confirming that supplies had been made against the invoices and that payment had been received. The court held that the respondent fell into error in finding that there was no certification by NDDB that supplies were made. 5. Supply of goods beyond the export obligation period: The petitioner supplied four barrels beyond the nine-month period, for which it claimed NDDB had agreed to an extension of time. The court found that the petitioner had made requests for extension of time, and NDDB had responded much later. The court held that the petitioner's contention that the supplies made after the due date of obligation should be accepted was justified. 6. Forfeiture of Bank Guarantee and enforcement of Legal Agreement: The Deputy Director General of Foreign Trade issued a show cause notice to the petitioner for alleged non-fulfillment of export obligation and passed an ex-parte forfeiture order. The Joint Director General upheld the forfeiture order. The court found that the petitioner had fulfilled its export obligation and that the action of enforcing the bond, bank guarantee, and issuance of demand notice was not justified. The court set aside the forfeiture order and the impugned order. Conclusion: The court held that the petitioner had fulfilled its export obligation under the Import License and that the impugned order was in error of law. The court set aside the impugned order and the forfeiture order, and ruled in favor of the petitioner. The petition was allowed, and there were no orders as to costs.
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