2004 (1) TMI 88 - HC - Customs

Summary

Issues:
Challenge to cancellation of revalidation of Annual Advance Licence by Customs Authorities.

Analysis:
1. The petitioner challenged the notice of cancellation of revalidation of Annual Advance Licence and the reply to the prayer for consideration. The petitioner argued that the extension of the licence period was rightfully done, allowing completed export and import activities. Reference was made to relevant sections of the Export and Import Policy 1997-2002, emphasizing the provisions for revalidation of licences.

2. The petitioner highlighted Chapter 7.54(a) regarding Advance Licence for Annual Requirement and Chapter 7.11 on Advance Licence for Intermediate Supplies. The petitioner argued that the authority had the power to extend the Annual Advance Licence period as per the policy, with specific restrictions on "Freely Transferable Licences." Citing previous court decisions, the petitioner contended that retrospective amendments to import licences were not favored, urging the court to intervene despite alternative remedies.

3. The Customs Authorities argued that there was a distinction between Advance Licence and Annual Advance Licence. They contended that the revalidation was wrongful and should be treated as null and void, emphasizing that no retrospective effect should be given to the revalidation. Reference was made to a decision by the Policy Renewed Committee in 2002 to support their stance.

4. The petitioner pointed out Chapter 7.28 on the regularisation of bona fide defaults, arguing that the policy should apply uniformly to both Advance Licence and Annual Advance Licence. The authorities disclosed internal meeting minutes stating no provision for revalidation of Annual Advance Licence, prompting the petitioner to question the inconsistency in the policy application.

5. The judgment analyzed the clauses of the policy regarding Advance Licence and Annual Advance Licence, concluding that both were part of the same chapter and subject to the same provisions. The court emphasized the beneficial nature of the Annual Advance Licence scheme, designed to facilitate trade activities. The court found no justification for the cancellation of revalidation and upheld the extension of the Annual Advance Licence period as valid.

6. Consequently, the court allowed the writ petition, quashed the cancellation notices, and declared the extension of the Annual Advance Licence period as valid, without passing any costs orders.