1985 (9) TMI 240 - HC - Customs

Issues Involved:
1. Non-grant of registered quota for canalised items.
2. Violation of Import-Export Policy provisions.
3. Failure to supply registered demand within stipulated time.
4. Requirement for a "No Objection Certificate" for direct imports.
5. Entitlement to import license for balance registered demand.
6. Refund of earnest money.

Issue-wise Detailed Analysis:

1. Non-grant of registered quota for canalised items:
The Petitioners, M/s. Umrao Industries, challenged the Respondents' action of not granting the registered quota of two canalised items, M.S. Steel Sheets (Defective) and tin plate waste/waste, as per the Import-Export Policy for April 1984 to March 1985. The Petitioners had previously imported these items directly before they were canalised. Upon canalisation, they were required to import through the Steel Authority of India (SAIL), the designated canalising agency.

2. Violation of Import-Export Policy provisions:
The Petitioners submitted applications for importing the items along with the prescribed earnest money. They specified their yearly requirement and other details. However, SAIL offered only 106 M.T. of tin plate waste/waste instead of the required 800 M.T. and provided inferior quality material. This offer did not adhere to the specifications and violated Clause 69 of the Import-Export Policy, which limits financial cover to the sale value for three months at a time.

3. Failure to supply registered demand within stipulated time:
As per para 155(1) of the Import-Export Policy, the canalising agency must indicate the supply arrangement within 60 days of registration. SAIL's demand for opening a Letter of Credit (L/C) for the full sale value for the balance goods was contrary to para 69, indicating their refusal or inability to perform their duty. The Petitioners were justified in approaching the Chief Controller of Imports & Exports (CCI&E) for relief.

4. Requirement for a "No Objection Certificate" for direct imports:
The Petitioners requested a "No Objection Certificate" from SAIL, as per para 155 of the policy, due to SAIL's failure to supply the registered demand. Despite repeated requests, SAIL did not issue the certificate, further complicating the Petitioners' situation.

5. Entitlement to import license for balance registered demand:
The court held that the Petitioners were entitled to an import license for the balance quantity of tin plate waste/waste and M.S. Steel Sheets (Defective) due to SAIL's failure to supply within the stipulated time. The CCI&E was directed to issue the necessary import licenses.

6. Refund of earnest money:
The court directed SAIL to refund the earnest money of Rs. 50,000/- to the Petitioners within a month. Additionally, the Petitioners were awarded costs of Rs. 2,000/-, payable by SAIL.

Conclusion:
The court issued a mandamus to Respondents No. 2 and 3 (CCI&E and Monitoring Committee) to issue the necessary import licenses for the balance quantities of the canalised items. SAIL was directed to refund the earnest money and pay the costs assessed. The judgment emphasized the importance of adhering to the Import-Export Policy provisions and the rights of actual users to seek relief in case of non-compliance by the canalising agency.

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