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Issues Involved
1. Entitlement to Special REP Certificates. 2. Compliance with Export Obligations. 3. Interpretation of the "+/-5%" Clause. 4. Proportionate Reduction of Benefits. Detailed Analysis Issue 1: Entitlement to Special REP Certificates The respondent, an exporter of unmanufactured tobacco, sought Special REP Entitlement Certificates after fulfilling export obligations under the Advance Licence scheme. The appeals challenge the denial of these certificates by the appellants, who argued that the respondent did not meet the quantity requirements stipulated in the licences. Issue 2: Compliance with Export Obligations The respondent imported corrugated fibre board boxes duty-free under Advance Licences for exporting unmanufactured tobacco. The export obligations required specific quantities and values of tobacco to be exported. In both cases, the respondent exported less than the required quantities but exceeded the required values significantly. The shortfall in quantity was 1,70,511 Kgs. (2.3%) in the first case and 2,32,710 Kgs. (2.3%) in the second case. Despite this, the respondent fulfilled the value obligations, exporting tobacco worth Rs. 30,40,13,000/- and Rs. 52,13,79,622/- respectively, far exceeding the stipulated values. Issue 3: Interpretation of the "+/-5%" Clause The core dispute centered on the interpretation of the clause "each carton 200 Kgs. +/-5%" in the DEEC Book. The respondent argued that this margin should apply to the overall quantity of exported tobacco, allowing for a permissible deviation. The appellants contended that the clause referred to the weight of tobacco in each individual carton, not the total exported quantity. The court agreed with the appellants, noting that the clause specifically mentioned "each carton," implying that the deviation margin applied to individual cartons rather than the total quantity. Issue 4: Proportionate Reduction of Benefits The court recognized that the respondent had fully utilized the imported boxes for exporting tobacco and had significantly exceeded the value obligations. The court found it unjust to deny the Special REP benefits entirely due to a minor shortfall in quantity, especially when the value of exports was substantially higher than required. The court directed that the Special REP benefits be proportionately reduced to account for the shortfall in quantity. This approach was consistent with a previous decision by the first appellant, where proportionate benefits were granted in similar circumstances. Conclusion Both writ appeals were allowed in part. The court modified the orders of the learned Single Judge, directing the first appellant to grant Entitlement Certificates to the respondent for claiming proportionate benefits of the Special REP facility, commensurate with the actual quantity of exported commodity. The decision balanced the need to adhere to export obligations with the recognition of the substantial value of exports achieved by the respondent.
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