1997 (2) TMI 130 - HC - Customs

Summary

Issues Involved:
1. Validity of the import licence after revalidation.
2. Rights of the importer under the original licence.
3. Application of import policy and handbook provisions.

Detailed Analysis:

1. Validity of the import licence after revalidation:

The key question referred to the High Court was whether the endorsement made on 15-1-1985, revalidating the licence dated 16-1-1984, extinguished the original validity of the licence for shipment of goods in terms of the import policy prior to revalidation up to 31-1-1985.

The applicant imported steel wire and produced three import licences. The licence dated 16-1-1984 was revalidated on 15-1-1985 with conditions, including that it would cease to be valid for items not permissible under the 1984-85 Import Policy. The Collector of Customs and the Tribunal held that the revalidated licence was not valid for the import of goods shipped on 31-1-1985. However, the High Court found that the original licence, valid until 15-1-1985, was automatically extended to 31-1-1985 by Paragraph 207(2) of the Hand Book of Import and Export Procedures.

2. Rights of the importer under the original licence:

The applicant argued that the revalidation endorsement did not extinguish the original validity of the licence. The High Court agreed, stating that the original licence granted on 16-1-1984 carried certain rights and duties. The revalidation created a distinct period with its own conditions, separate from the original licence's validity, which extended automatically to 31-1-1985. The Court emphasized that substantial rights secured under the original licence could not be nullified by the revalidation endorsement.

3. Application of import policy and handbook provisions:

The Court analyzed the relevant provisions of the Hand Book, particularly Paragraphs 207 and 208, which deal with the validity and grace period of import licences. The Court concluded that the original licence was valid for shipment until 31-1-1985, and the revalidation applied only after this period. The authorities below erred by not distinguishing between the original and revalidated periods, thereby negating the applicant's substantial rights under the original licence.

Conclusion:

The High Court held that the endorsement dated 15-1-1985 did not extinguish the original validity of the licence for the shipment of goods up to 31-1-1985. The Court ruled in favor of the applicant, stating that the substantial rights under the original licence remained intact despite the revalidation. The authorities below, including the Tribunal, committed a grave error by not recognizing the distinction between the original and revalidated periods of the licence.