2015 (12) TMI 316 - HC - Customs

Failure to fulfil export obligation - Extension of validity of license - License expired within the period that the overseas buyer had renewed its order to import the subject goods from the petitioner - Held that - The petitioner was permitted to import yarn duty free on their undertaking to export the stipulated quantity of goods within a specified period of time. The whole purpose of issuance of the advance licences was to promote export with the incentive of duty remission if the export obligation was fulfilled. If for any bona fide reason an importer/exporter has been unable to fulfil his export obligation within the stipulated time, his case for extension of the validity period of the licence or licences should be reasonably considered. In order to reasonably consider such extension, it is important whether the belated export which he proposes to make is genuine or not. If the belated export is genuine, the purpose of the policy of generating more export earnings, by granting duty remission incentives would be fulfilled. This has to be ascertained. Only the circumstances will bear this out. - petitioner is allowed to fulfil its export obligation against advance licences at serial nos.8 and 9 of page 50 of the writ petition on the basis of the expired licences, without prejudice to the rights and contentions of the parties.

Summary

Issues:
- Extension of validity period of advance licenses for export obligation fulfillment.
- Consideration of belated export for duty remission incentives.
- Interim relief allowing fulfillment of export obligation without benefits.
- Stay on appeal before Director General of Foreign Trade.

Extension of Validity Period of Advance Licenses:
The writ petitioner was issued advance licenses under an import and export policy scheme, allowing duty-free import of yarn for manufacturing goods to be exported. While the petitioner fulfilled export obligations for licenses issued in 2007, they failed to do so for licenses issued in 2009 due to adverse market conditions. The petitioner sought an extension of the licenses to fulfill export obligations, which was resisted by the respondent citing expired validity. The court emphasized the need to reasonably consider extensions for genuine cases of export delays to promote export earnings. An interim order allowed the petitioner to fulfill export obligations against specific licenses using expired ones, without receiving benefits, subject to review after a specified period.

Consideration of Belated Export for Duty Remission Incentives:
The court highlighted the purpose of advance licenses to promote exports by offering duty remission incentives upon fulfilling export obligations within specified timeframes. In cases where exporters face genuine challenges in meeting export obligations timely, the court stressed the importance of assessing the genuineness of belated exports to ensure policy objectives are met. The decision to allow the petitioner to fulfill export obligations using expired licenses aimed to facilitate genuine exports while safeguarding the interests of both parties pending further review.

Interim Relief and Stay on Appeal:
As an interim measure, the court permitted the petitioner to fulfill export obligations without benefits using expired licenses until a specified date, with a stay on the appeal before the Director General of Foreign Trade. The court directed the respondent authorities not to take coercive actions against the petitioner until a certain date or further orders. The decision aimed to balance the interests of both parties by allowing export fulfillment while maintaining the status quo on the appeal process.

This judgment from the Calcutta High Court addressed the complexities of extending validity periods for advance licenses, considering belated exports for duty remission incentives, and providing interim relief and stay on appeal proceedings to ensure fairness and compliance with import-export policies.