2003 (1) TMI 113 - HC - Customs

Summary

Issues:
Challenge to refusal of redemption certificate for Annual Advance Licence based on change in Department's view regarding product classification under Standard Input-Output Norms.

Analysis:
1. The petitioner, an exporter of various yarns, obtained an Annual Advance Licence to export material worth a specific value and import inputs accordingly. The licence exempted imports from various duties, subject to compliance with input-output norms set by the Department. The petitioner sought to export cotton nylon blended yarn and applied for fixing standard input-output norms. The Department initially confirmed the product was covered under the norms.

2. Utilizing the licence, the petitioner imported raw materials and exported different yarns, including cotton nylon yarn. However, the Department later changed its stance, claiming the product was not covered under the norms. Consequently, the Department refused to issue a redemption certificate, demanding duty payment on imported material. The petitioner challenged this decision through a writ petition under Article 226 of the Constitution.

3. The respondents argued that the petitioner failed to disclose its intention to export cotton nylon blended yarn, leading to the misunderstanding. They contended that the petitioner did not inform the Department about the specific material to be exported, causing confusion only during the export document filing process. The respondents suggested the petitioner should have addressed grievances through the Grievance Committee instead of filing a writ petition.

4. The Court found in favor of the petitioner, noting that the application clearly stated the intention to export cotton nylon blended yarn. The Department's initial confirmation of the product's coverage under the norms was crucial. As the petitioner fulfilled its obligations under the licence, the Department was obligated to issue the redemption certificate. The Court held that the Department's refusal based on a change in interpretation was unjustified, and the petitioner was entitled to the certificate.

5. Consequently, the writ petition was allowed, directing the respondents to issue the redemption certificate as requested by the petitioner. The Court did not award costs in this matter.