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2013 (6) TMI 303 - HC - CustomsDFIA license - Validity of license - transferability - whether license on the date of its issue shall govern the import of goods? - Held that - It is not in dispute that the original licence was issued on 15.4.2010 and its validity is for a period of two years ending 14.4.2012. The transferability endorsement was made on 6.12.2010. Therefore, the license is valid till 30.4.2012 for shipments or imports made under the said license, in terms of paragraph 9.11A read with paragraphs 2.12.1 and 2.12.2 of the Handbook of Procedures, 2009-2014 . Hence, the contention of the department that the imports are not covered by a valid license cannot be countenanced. It is also not in dispute that the Bill of Lading in this case was issued on 14.4.2012 and In-bond Bill of Entry was filed on 30.4.2012. Therefore, the license covers the import and there cannot be any dispute on its validity in relation to the import. Applicability of Public Notice dated 23.7.2010, the Clarification dated 23.9.2010 and the Policy Circular dated 31.1.2011 - Held that - The above may not apply to a valid license, the transferability of which is endorsed. It is to be noticed that the clarification issued by the Ministry of Commerce dated 31.7.2008 and the DGFT Policy Circular dated 24.3.2009, which were in force prior to issuance of license in question dated 15.4.2010, will be made applicable to the license, as it extends the benefits of flexibility to import the alternative input/product mentioned in the SION and that appears to be the main tenor of the petitioner s plea seeking release of the Lactose stating that the clarification and the circular which were in force at the time of issuance of license will be applicable to the goods imported and not the subsequent clarifications is no doubt justified in view of the decision of S.B. International Ltd. case 1996 (1) TMI 125 - SUPREME COURT OF INDIA wherein been held in categoric terms that the norms that are applicable on the date on which the license is issued will be valid in respect of goods imported under the said license. Since the license in this case was issued on 15.4.2010 and on the date on which the license was issued the clarification dated 31.7.2008 and the DGFT Policy Circular dated 24.3.2009 were in force, the license would get the benefit of the said clarification and the DGFT Policy Circular. Subsequent change in policy by way of Public Notice No.84/2009-14, dated 23.7.2010, clarification dated 23.9.2010 and the Policy Circular No.13, dated 31.1.2011 will have no consequence in respect of the license that has already been issued. Accordingly, the said issue is decided in favour of the petitioner. Validity of the import - as questioned by revenue on the ground that the In-bond Sales invoice is dated 4.8.2012 and therefore the import is not valid - Held that - Unable to accept such a plea in view of the specific provision contained in paragraph 9.11A read with paragraphs 2.12.1 and 2.12.2 of the Handbook of Procedures, 2009-2014, referred to above. Therefore, the Bill of Lading issued on 14.4.2012 coupled with the In-Bond Bill of Entry 4.8.2012 will cover the import in question in terms of the above paragraphs of the Handbook of Procedures, 2009-2014 and the endorsement made by the Assessing Authority refusing to grant clearance of the goods is bad.
Issues Involved:
1. Validity and applicability of the DFIA license for the import of Lactose. 2. Impact of subsequent policy changes on the pre-existing DFIA license. 3. Validity of the import based on the date of shipment and the license period. Detailed Analysis: 1. Validity and Applicability of the DFIA License for the Import of Lactose: The petitioner sought a writ of Mandamus to direct the respondents to accept the transferable DFIA license issued under Standard Input Output Norms (SION) E1 & E5, permitting the import of Lactose as an alternative for sugar. The petitioner argued that the rights accrued under the license on the date of its issue should govern the import of goods within the validity period of the said license. The petitioner had entered into an agreement with Kawarlal & Co. for the purchase of Lactose, which was kept in the Customs Warehouse. The petitioner filed an Ex-bond Bill of Entry for clearance of the goods under the transferred DFIA License No.0710070929, which was originally issued to Britannia Industries and subsequently transferred to the petitioner. 2. Impact of Subsequent Policy Changes on the Pre-existing DFIA License: The petitioner contended that the Policy Circular No.13, dated 31.1.2011, would apply only to licenses issued on and after that date and would not affect the rights accrued by virtue of the license already granted. The petitioner relied on several judicial decisions, including S.B. International Ltd. v. Assistant Director General of Foreign Trade and Sonia Fisheries v. Union of India, which held that the norms in vogue on the date of issue of the license govern the license. The Supreme Court in S.B. International Ltd. emphasized that the date of the license is relevant, not the date of application. The Bombay High Court in Sonia Fisheries reiterated that the policy prevailing on the date of grant of advance license applies, and subsequent changes do not have retrospective effect. 3. Validity of the Import Based on the Date of Shipment and the License Period: The respondents argued that the imports were not covered by a valid license due to the issuance of subsequent policy changes and public notices. However, the petitioner countered that the license was valid until 30.4.2012 for shipments made under the said license. The Bill of Lading was issued on 14.4.2012, and the In-bond Bill of Entry was filed on 30.4.2012, which fell within the validity period of the license. The Handbook of Procedures, 2009-2014, paragraphs 9.11A, 2.12.1, and 2.12.2, supported the petitioner's claim that the date of shipment determines the validity of the import authorization. Conclusion: The Court held that the original license issued on 15.4.2010, with validity until 14.4.2012, covered the import in question. The subsequent policy changes, including Public Notice No.84/2009-14, dated 23.7.2010, and Policy Circular No.13, dated 31.1.2011, did not apply to the pre-existing license. The import of Lactose was valid as per the date of shipment and the license period. The writ petition was allowed, directing the respondents to clear the goods under the DFIA License, and the endorsement made by the Assessing Authority refusing clearance was deemed invalid.
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