1979 (10) TMI 215 - HC - Central Excise

Summary

Issues:
Interpretation of export policy and classification of exported goods as P.V.C. leather cloth.

Analysis:
The petitioners, registered exporters of P.V.C. leather cloth, entered into contracts to supply P.V.C. leather cloth and exported goods worth a significant amount. The Government of India issued a notification requiring inspection of P.V.C. leather cloth before export, which the petitioners complied with by obtaining necessary certificates. However, their applications for cash assistance and import replenishments were rejected on the grounds that the exported goods were classified as non-fabric cotton textile items, not P.V.C. leather cloth. The lower authorities upheld this decision based on a report from a local Committee. The petitioners contended that their goods met the definition of P.V.C. leather cloth as per the notification and were certified as such by relevant authorities. The court agreed with the petitioners, emphasizing that the certificates and the notification supported their claim.

The respondent argued that doubts arose regarding the classification of the exported goods, leading to the formation of a Classification Committee that classified the items differently from P.V.C. leather cloth. The respondent relied on the Committee's decision and minutes to support their stance. However, the court found the government's approach flawed, questioning how the Committee could disregard the statutory certificates and the official definition of P.V.C. leather cloth. The court refused to consider the Committee's minutes, highlighting the importance of the certificates and the notification in determining the nature of the exported goods.

The court criticized the lower authorities for delegating decision-making to a Committee and blindly accepting its conclusion without proper evaluation. It emphasized that the rights accrued to the petitioners under the Import Policy could not be arbitrarily taken away by administrative actions. Referring to a Supreme Court decision, the court affirmed that the petitioners were entitled to the relief sought and that the authorities erred in denying them. Consequently, the court ruled in favor of the petitioners, directing the respondents to provide the cash assistance and import licenses as per the petition's prayers within a specified timeframe, without imposing costs on either party.