2014 (2) TMI 642 - HC - Customs

Revalidation of two Duty Free Replenishment Certificates - request rejected by the Joint Director General of Foreign Trade on 25 May, 2005, 15 May, 2006 and 27 October, 2006 - Held that - It was open to the petitioner to have utilized the DFRCs for cleance of imported goods provided they were despatched or shipped on or before 31 January, 2005. As a matter of fact, no shipment was made in terms of Para 9.11 of the Handbook of Procedures before 31 January 2005. The petitioner failed to utilize the DFRCs before the expiry date. The petitioner has furnished no justification for its own delay. The narration of dates in the affidavit in reply does not indicate that there was any delay on the part of the Customs authorities or the DGFT in processing the request of the Petitioner. In this view of the matter and particularly having- regard to the fact that the DFRCs have expired as far back as in January, 2005, it would not be appropriate for the Court to entertain the petition, particularly when even on merits, the grievance is lacking in substance - Decided against assessee.

Summary

Issues:
1. Revalidation of Duty Free Replenishment Certificates (DFRCs) dated July 16, 2003, and July 21, 2003.
2. Interpretation of Para 2.12.2 and 2.13 of the Handbook of Procedures under the DFRC scheme.
3. Justification for not utilizing DFRCs before the expiry date.

Analysis:

1. The petitioner sought a direction for the revalidation of two DFRCs dated July 16, 2003, and July 21, 2003, which were rejected multiple times by different authorities. The final rejection was by the Policy Relaxation Committee in February 2011. The petitioner's request for revalidation was based on the DFRC scheme of the Exim Policy for 2003-04, which allowed duty-free import of inputs for manufacturing goods. The petitioner's argument for revalidation was dismissed due to the expiration of the DFRCs in January 2005 and the lack of justification for the delay in utilization.

2. The interpretation of Para 2.12.2 and 2.13 of the Handbook of Procedures was crucial in this case. Para 2.12.2 stated that the validity of an import license/certificate is determined by the date of shipment from the supplying country. Para 2.13 allowed revalidation of licenses/certificates for a period of six months at a time, not exceeding 12 months from the expiry date. The court found merit in the respondent's defense that the petitioner could have utilized the DFRCs if the goods were shipped before January 31, 2005, as per the Handbook of Procedures. However, no shipment was made before the expiry date, leading to the expiration of the DFRCs.

3. The court emphasized that the petitioner failed to provide any justification for the delay in utilizing the DFRCs before their expiry in January 2005. The affidavit in reply did not indicate any delay on the part of Customs authorities or the DGFT in processing the petitioner's requests. As the DFRCs had expired long ago and the petitioner's grievance lacked substance, the court dismissed the petition, stating that it was not appropriate to entertain it. The judgment concluded with a dismissal of the petition without any order as to costs.