2017 (1) TMI 967 - HC - Customs

Advance Licence Scheme - imposition of penalty - noncompliance with the export obligation - Held that - The case of the petitioner being a supporting manufacturer is not borne out by the records. Even when an exparte order was passed after sufficient opportunities of personal hearing being extended, but not availed of in appeal, the petitioners did not come forward with the above case - The order passed is based on non-compliance and that has been established and proved. It is not for the authorities to go on waiting for the petitioners to produce the relevant proof - petition dismissed - decided against petitioner.

Summary

Issues:
1. Interpretation of Duty Exemption Scheme under Import-Export Policy.
2. Compliance with export obligations under Value based Advance Licence.
3. Discrepancies in claims between petitioner and respondent.
4. Requirement of bank realisation certificate for proof of export proceeds.
5. Application of substantial compliance doctrine in export obligations.

Analysis:
1. The judgment involves the interpretation of the Duty Exemption Scheme under the Import-Export Policy. The petitioner claimed to have applied for a Value based Advance Licence for duty-free import of inputs under this scheme. The license specified the quantity and FOB value of export goods to be fulfilled by the license holder, as per Chapter VII of the Import Export Policy 1992-1997.

2. The issue of compliance with export obligations under the Value based Advance Licence is crucial in this case. The petitioner asserted that all requirements for obtaining an Export Obligation Discharge Certificate were fulfilled, including the submission of a legal undertaking and proof of goods reaching the destination. However, the authorities insisted on a bank realisation certificate as proof of sale proceeds, which the petitioners failed to provide.

3. Discrepancies in claims between the petitioner and respondent were highlighted in the judgment. The petitioner claimed to be a supporting manufacturer of the respondent, who exported the goods. However, the clearance of goods was done from the petitioner's premises, leading to doubts about the fulfillment of export obligations by the petitioner as per the Advance Licence conditions.

4. The requirement of a bank realisation certificate for proof of export proceeds was a key point of contention. The authorities requested this certificate to verify the credit of sale proceeds in the respondent's account, which the petitioners did not produce. The absence of supporting evidence during the legal proceedings weakened the petitioner's case.

5. The application of the substantial compliance doctrine in export obligations was discussed in the judgment. The court emphasized that non-compliance had been established and proved, and the petitioners could not introduce a different factual scenario in the writ jurisdiction. The authorities were not obligated to wait indefinitely for the petitioners to produce relevant proof, and the doctrine of substantial compliance could not be invoked in this context.

In conclusion, the court dismissed the writ petition, finding no merit in the petitioner's arguments due to factual contradictions, lack of supporting evidence, and failure to provide the required bank realisation certificate as proof of export proceeds.