9911796707
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Issues Involved:
1. Legality of the cancellation of permission for Domestic Tariff Area (DTA) sale. 2. Classification of the petitioner's activity as "reconstruction" versus "remaking" or "reconditioning". 3. Compliance with procedural requirements for cancellation of permissions. Issue-wise Detailed Analysis: 1. Legality of the cancellation of permission for Domestic Tariff Area (DTA) sale: The petitioner, a unit under the Export Oriented Unit (EOU) Scheme, sought directions for the assessment of duty on 1500 reconstructed diesel engines and their clearance for sale in the Domestic Tariff Area (DTA) as per the Development Commissioner's permission. The Development Commissioner initially granted permission for DTA sale, which was later cancelled. The petitioner challenged this cancellation, arguing it was done without jurisdiction, arbitrarily, and without a hearing, thus violating their accrued rights. The court noted that the cancellation was communicated without a hearing and lacked detailed reasoning, which contravened Section 9(4) of the Foreign Trade (Development and Regulation) Act, 1992, requiring a reasonable opportunity of being heard before such actions. 2. Classification of the petitioner's activity as "reconstruction" versus "remaking" or "reconditioning": The petitioner contended that their activity of reconstructing old diesel engines did not equate to "remaking" or "reconditioning," which would disqualify them from DTA sales under Paragraph 9.22 of the Exim Policy. The respondents argued that the petitioner's activities were indeed "reconditioning," thus falling under the restrictions of Paragraph 9.22. The court found that determining whether the petitioner's activities constituted "reconstruction" or "reconditioning" required a factual investigation, which could not be resolved based on the existing record. The court directed the appropriate authorities to inspect the nature of the petitioner's activities to make this determination. 3. Compliance with procedural requirements for cancellation of permissions: The court emphasized that any cancellation of permission (which is considered a "licence" under Section 2(g) of the Foreign Trade (Development and Regulation) Act, 1992) must follow due process, including providing a reasonable opportunity of being heard and recording detailed reasons for the decision. The court found that the cancellation of the petitioner's DTA sale permission did not comply with these procedural requirements. Consequently, the court quashed the cancellation order and directed the respondents to provide a hearing and detailed reasons before making a fresh decision. Conclusion: The court quashed the cancellation of the DTA sale permission due to procedural non-compliance and directed the respondents to re-evaluate the petitioner's activities with a proper hearing and detailed reasoning. The respondents were instructed to complete this process within one month, ensuring the petitioner's right to export remains unaffected during this period. The writ application was disposed of with no order as to costs.
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