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2021 (5) TMI 1082 - HC - CustomsPetition Seeking restraint against the invocation/ encashment of the bank guarantee - extension of the EPCG authorisation - non-fulfilment of export obligations - HELD THAT - The amount of the demand draft may be re-deposited by Yes Bank, and the Bank Guarantee shall be re-issued in favour of Respondent Nos.1 2, for a validity period of at least two years, on the same terms and conditions on which it was issued before. This would satisfy the prayers (a) and (b) of the petition. The reason for non-fulfilment of the same, as captured in the order dated 6th May 2021, is the COVID-19 pandemic, because of which the hospitality sector has been adversely hit. Accordingly, considering the fact that the COVID-19 pandemic has reduced tourism, as also the occupancy levels in hotels including that of the Petitioners, the present writ petition, insofar as it relates to prayers (c), (d) (e), may be considered as a representation, by the Director General of Foreign Trade ( DGFT ). The said prayers for extension of the EPCG authorizations may be considered by DGFT, after giving a hearing to the Petitioner and a decision in respect thereof would be taken in accordance with the law on or before 31st July, 2021. The decision taken, shall be communicated to the Petitioner and the Petitioner s remedies, if any, in respect of the said decision that may be taken, are left open to be availed of in accordance with law.
Issues:
Restraint against invocation/encashment of bank guarantee for EPCG authorization, validity of license till December 2021, extension of EPCG authorizations due to COVID-19 impact. Analysis: 1. Restraint against Bank Guarantee Invocation: The petitioner sought restraint against the invocation of a bank guarantee related to EPCG authorizations due to delays in fulfilling export obligations caused by the COVID-19 pandemic. The court directed to maintain status quo on the demand draft until further hearing, and subsequently, the demand draft was returned to the bank and re-issued in favor of the respondents for a two-year period, meeting the petition's prayers. 2. Validity of License and Export Obligations: The petitioner claimed to have redeemed some EPCG authorizations and surrendered others, with delays in fulfilling obligations for the remaining authorizations due to the pandemic. The court considered the impact of COVID-19 on the hospitality sector, affecting the petitioner's ability to fulfill obligations, and directed the Director General of Foreign Trade (DGFT) to consider extending the EPCG authorizations after a hearing, with a decision to be made by July 31, 2021. 3. Extension of EPCG Authorizations: The court treated the prayers for extension of EPCG authorizations as a representation to the DGFT, given the pandemic's adverse effects on the hospitality sector. The DGFT was instructed to decide on the extension by July 31, 2021, after hearing the petitioner. Any remedies available to the petitioner concerning the decision were to be availed in accordance with the law, with a two-week notice required for any bank guarantee invocation before the decision date. 4. Disposition and Compliance: The court disposed of the petition and pending applications, emphasizing that it had not examined the merits of either party's case. The digitally signed copy of the order on the court's official website was deemed as the certified copy for compliance purposes, with no requirement for physical copies to be provided. In conclusion, the judgment addressed the issues of bank guarantee invocation, license validity, and extension of EPCG authorizations due to the pandemic's impact, providing directives to safeguard the petitioner's rights and ensure a fair decision-making process by the DGFT.
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