2003 (9) TMI 88 - HC - Customs

Issues Involved:

1. Legality of Public Notices Nos. 225 I.T.C. (P.N.)/1985-88 and 235 I.T.C. (P.N.)/1985-88.
2. Entitlement to higher percentage of replenishment licence.
3. Quantification of export obligation value.
4. Applicability of public notices to the petitioners' case.
5. Validity of the show cause notice and subsequent actions by the respondents.

Detailed Analysis:

1. Legality of Public Notices Nos. 225 I.T.C. (P.N.)/1985-88 and 235 I.T.C. (P.N.)/1985-88:

The petitioners challenged the public notices dated 6th November 1987 and 11th December 1987, claiming they were illegal, unlawful, unconstitutional, and violative of Articles 14-19(1)(g) and 300A of the Constitution of India. They sought a declaration to this effect and requested the quashing of the show cause notice based on these public notices.

2. Entitlement to Higher Percentage of Replenishment Licence:

The petitioners argued that they were entitled to a higher percentage of the replenishment licence due to their compliance with the export obligation exceeding the percentage attached to the Imprest Licence. They contended that their application for the licence was made before the issuance of the contested public notices, thus they should be governed by the policy existing prior to these notices.

3. Quantification of Export Obligation Value:

The petitioners put forth their interpretation of Public Notice No. 235 I.T.C.(P.N.)/85-88, dated 11th December 1987, to argue that the quantification of the export obligation should be based on the policy before the issuance of the public notices. They claimed that the second instalment of the licence issued after the public notices should still follow the original policy terms.

4. Applicability of Public Notices to the Petitioners' Case:

The petitioners contended that their application and the first instalment of the licence were issued before the public notices, thus the subsequent issuance of the second instalment should not be affected by the new notices. They argued that the second instalment was part of the original licence and should follow the terms of the policy before the public notices.

5. Validity of the Show Cause Notice and Subsequent Actions by the Respondents:

The respondents issued a show cause notice on 8th December 1989, alleging non-fulfillment of the export obligation as per the public notices. The petitioners argued that the public notices should not apply to their case as their application predated the notices. They also contended that the second instalment of the licence was issued under the old policy, and thus the show cause notice and subsequent actions were invalid.

Consideration/Findings:

The court found that the petitioners' application for the Imprest Licence was made on 18th May 1987, and the first part of the licence was issued on 1st July 1987. The second part was issued on 17th March 1988, after the public notices, but it was calculated based on the old policy. The court concluded that the second part of the licence was issued under the unamended policy, thus the public notices did not apply to the petitioners' case.

The court noted that the petitioners had completed their export obligation and even exceeded it by Rs. 3,52,427.12. The petitioners abandoned their claim for the excess entitlement during the oral submissions.

Conclusion:

The court allowed the petition, setting aside the show cause notice and the orders passed by the original and appellate authorities. The court ruled that the public notices did not apply to the petitioners' case, and the export obligation was to be calculated based on the policy existing prior to the issuance of the public notices. The petition was disposed of with no order as to costs.

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