2003 (1) TMI 114 - SC - Customs

Whether the respondents who were admittedly entitled to grant of additional licence under the old policy stand debarred from claiming the said additional licence because of the new import export policy which came into force from 1st April, 1990 and further the applicability of the Circular 11 of 93, dated 5th May, 1993 and the effect thereof? Held that - The entitlement of the export houses/trading houses to get the additional licence has not been taken away. The only condition to which the additional licence has been subjected is that the permissible items allowable for import against such (additional licensing) would be governed by the provisions of the import policy in force at the time of their actual import. Contentions raised on behalf of the Union of India that the respondents/writ petitioners had to lodge their right/entitlement to get the additional licence under the new policy for the exports made during the period when the old policy was in force cannot be accepted. The application for the additional licence could be made only after the end of the fiscal year, as only thereafter the export house could know its entitlement. The High Court was, therefore, right in holding that the interpretation put by the authorities on the new policy in declining the claim of the respondents for the grant of additional licence was unacceptable. Under the new policy as well, the export houses/trading houses would remain entitled to the additional licence for the exports made during the period when the old policy was in force but subject to the condition that they would be allowed to import against the additional licence such items which are governed by the policy in force at the time of the import of the goods. Appeal dismissed.

Issues Involved:
1. Entitlement to additional licence under the old Import Export Policy.
2. Applicability of the new Import Export Policy.
3. Doctrine of Promissory Estoppel.
4. Validity of REP Circular No. 11 of 1993.
5. Payment of 20% premium instead of additional licence.

Detailed Analysis:

1. Entitlement to Additional Licence Under the Old Import Export Policy:
The respondents argued that by exporting processed iron ore during the period 1-4-1989 to 31-3-1990 under the old Import Export Policy (April 1988-March 1991), they had acquired a vested right to get an additional licence in the licensing year April-March 1990-1991. This right, they contended, could not be defeated by the provisions of the new policy (April 1990-March 1993). The Supreme Court noted that paragraph 215 of the old policy clearly provided for eligibility to additional licences based on admissible exports made in the preceding licensing year. The Court held that the respondents were entitled to the additional licence under the old policy, as the application for the additional licence pertained to exports made during the period when the old policy was in force.

2. Applicability of the New Import Export Policy:
The appellants contended that the claim for additional licence in the subsequent year was ineligible under the new policy, which came into force on 1st April, 1990. However, the Supreme Court highlighted paragraph 222 of the new policy, which provided transitional arrangements. It stated that if an application for an additional licence for any preceding licensing year was pending, the licence had to be issued as per the relevant policy provisions prevailing during the period to which the additional licence related. Thus, the Court concluded that the respondents' entitlement to the additional licence under the old policy remained intact, subject to the condition that the items allowed for import would be governed by the new policy.

3. Doctrine of Promissory Estoppel:
The respondents argued that the Union of India was precluded by the doctrine of Promissory Estoppel from denying the additional licence, having represented to the Trading Houses/Exporters that they would be entitled to it. The appellants denied any promise and contended that changes in export incentives were made in public interest. The Supreme Court did not specifically address the doctrine of Promissory Estoppel in its final decision, focusing instead on the interpretation of policy provisions.

4. Validity of REP Circular No. 11 of 1993:
The REP Circular No. 11 of 1993, issued by the Directorate General of Foreign Trade, provided that for applications pending in respect of exports made and export proceeds realized prior to 1-3-1992, a 20% premium would be paid instead of issuing licences. The Supreme Court upheld the validity of this circular, noting that the High Court's order directing the Union of India to pay the 20% premium was in conformity with the circular.

5. Payment of 20% Premium Instead of Additional Licence:
The respondents lodged a claim for the 20% premium instead of the additional licence for the licensing year April-March 1991 against exports made in the preceding licensing year. The Supreme Court affirmed the High Court's decision to direct the Union of India to pay the 20% premium, as stipulated in Circular 11 of 1993. The Court found no infirmity in this directive, as it was consistent with the circular issued by the appellants.

Conclusion:
The Supreme Court dismissed the appeals, upholding the High Court's quashing of the orders rejecting the respondents' claim for additional licences and directing the payment of the 20% premium. The Court discharged the bank guarantee given by the respondents and ordered that parties bear their own costs.

← Previous Next →