1995 (3) TMI 104 - HC - Customs

Writ Petition - Existence of alternative remedy - Natural justice - Import - Advance Licence - REP entitlement certificate

Issues Involved:
1. Compliance with Export Obligation and Conditions of Advance Licence.
2. Principles of Natural Justice and Audi Alteram Partem Rule.
3. Interpretation of the Duty Exemption Scheme and Conditions of Licence.
4. Validity of Rejection of Special REP Entitlement Certificates.
5. Availability of Alternative Remedy.

Issue-wise Detailed Analysis:

1. Compliance with Export Obligation and Conditions of Advance Licence:
The petitioner, engaged in the manufacture and export of unmanufactured tobacco, was required to import corrugated fibre board boxes for packaging the tobacco for export. The import and export policy allowed duty-free import of materials used for manufacturing export products under an advance licence. The petitioner had to fulfill export obligations in terms of both quantity and value. In W.P. No. 11849 of 1993, the petitioner imported 20,160 boxes with a CIF value of Rs. 54,00,000 and was required to export 40,32,000 kgs of tobacco with an FOB value of Rs. 8,06,40,000. The petitioner achieved an FOB value of Rs. 30,40,13,000 but had a shortfall of 2.3% in quantity. Similarly, in W.P. No. 11848 of 1993, the petitioner imported 34,001 boxes and achieved an FOB value of Rs. 52,13,79,622 against an obligation of Rs. 14,11,20,000, with a shortfall of 2.3% in quantity. The court held that the shortfall was within permissible limits and did not violate the conditions of the licence.

2. Principles of Natural Justice and Audi Alteram Partem Rule:
The petitioner contended that the impugned orders rejecting the special REP entitlement certificates were passed without notice or hearing, violating the principles of natural justice. The court agreed, stating that any order resulting in civil consequences must adhere to the audi alteram partem rule and contain reasons. The orders had significant financial implications, and the petitioner should have been given an opportunity to be heard.

3. Interpretation of the Duty Exemption Scheme and Conditions of Licence:
The court emphasized that the Duty Exemption Scheme should be interpreted in a manner that aligns with its purpose of making exports competitive by providing necessary inputs at international prices without customs duty. The scheme and conditions of the licence should be read as a whole, and a purposive construction should be adopted. The court rejected the respondents' narrow interpretation that required box-wise compliance with quantity variations, stating that the overall export obligation in terms of quantity and value was met, and the petitioner had used all imported boxes for export.

4. Validity of Rejection of Special REP Entitlement Certificates:
The respondents had rejected the petitioner's applications for special REP entitlement certificates on the grounds of non-compliance with box-wise quantity conditions. The court found this rejection arbitrary and illegal, as the petitioner had fulfilled the overall export obligations. The court set aside the impugned orders and directed the issuance of the special REP entitlement certificates.

5. Availability of Alternative Remedy:
The respondents argued that the writ petitions were not maintainable due to the availability of an alternative remedy of appeal. The court rejected this contention, noting that the first respondent had acted at the behest of the second respondent, making the alternative remedy ineffective.

Judgment:
The court allowed both writ petitions, setting aside the impugned orders dated 3-2-1993 and 9-2-1993. It directed the redemption of the legal undertaking furnished by the petitioner and the issuance of special REP entitlement certificates. The petitioner was also entitled to payment of premium amounts as per the relevant circular. There was no order as to costs.

← Previous Next →