2017 (12) TMI 783 - HC - Customs

Non-fulfillment of export obligations within time - extension of export obligation period - the stocks of white sugar produced by the petitioner were placed under the control of the District Magistrate and the petitioner was unable to export the same - Held that - this Court is not persuaded to accept that the petitioner was entitled to any extension of the export obligation period and this Court finds no infirmity in the decision of the respondents to reject such request - it is not necessary to consider the petitioner s contention regarding the applicability of HoP/FTP 2015-20 to the Advance Authorisation in question. However, for the sake of completeness, it would be apposite to consider the said question as well. The petitioner has no vested right for grant of extension of the export obligation period and thus its application for extension would necessarily have to be considered as per the policy in force. Undisputedly, as per the policy applicable on 23.06.2015, an extension for purpose of discharging the export obligation in respect of import of raw sugar could not be granted beyond a period of six months. Thus, even if it is assumed that the petitioner had made out a genuine case of hardship which this Court finds that the petitioner has not no extension beyond a period of six months for completion of the export obligation could be granted. Petition dismissed.

Summary

Issues:
Petition challenging rejection of extension of time for export obligations.

Analysis:
The petitioner sought extension of time for fulfilling export obligations due to external factors beyond their control, specifically citing an order by the Allahabad High Court placing their sugar stocks under control. The petitioner argued that denial of extension was arbitrary and unreasonable. The petitioner had an obligation to export white sugar within a specified time frame but failed to do so. Despite initial extensions granted by the DGFT, subsequent requests were rejected based on non-compliance with export obligations and policy amendments limiting extension periods.

The court examined the petitioner's claims and found them unsubstantiated. It noted that the Allahabad High Court's order did not prevent the petitioner from fulfilling export obligations within the original timeframe. The court questioned why the petitioner did not seek variation of the interim order to facilitate exports and highlighted that the PIL was disposed of before the extended export period lapsed. The court deemed the petitioner's explanation for non-compliance as unconvincing and a pretext.

Regarding the applicability of the Foreign Trade Policy (FTP) and Handbook of Procedures (HoP) 2015-20, the court held that the petitioner had no vested right for extension beyond the stipulated period. The court emphasized that policy amendments restricting extension periods were to be applied prospectively. The petitioner's failure to meet the 50% export threshold and comply with current policy guidelines further weakened their case for extension. The court concluded that the rejection of the petitioner's requests for extension was justified, dismissing the petition.

In summary, the court rejected the petitioner's contentions, emphasizing that the denial of extension was valid based on non-compliance with export obligations and current policy provisions. The court found no merit in the petitioner's arguments regarding hardship or retrospective application of policy changes, ultimately dismissing the petition challenging the rejection of extension of time for export obligations.