2010 (2) TMI 306 - HC - Customs

EXIM-DEPB Licence- The writ petitioner carries on business by the style Bhawani Textiles . It made some exports. Under the extant policy of the Government of India, on 16th July, 2004 he was granted a DEPB-Post Export licence. The writ petitioner intended to transfer this licence in favour of Telco Construction Equipment Company Ltd. The customs authorities replied by their letter dated 1st July, 2005. They raised serious disputes about the entitlement to this duty benefit saying that the goods actually exported were different in classification or description to the goods described in the shipping bills. Therefore, the telegraphic release advice could not be issued. Held that- it has take it within time stipulated by law or if no time, adopting the correct procedure, otherwise, action becomes bad and wrongful in eye of law.

Issues:
- Validity and transferability of DEPB-Post Export licence
- Disputes raised by customs authorities regarding duty entitlement
- Interpretation of relevant legal provisions and precedents
- Denial of "telegraphic release advice" by customs authorities
- Revocation of licence benefits without following proper procedure
- Delay in filing the writ petition
- Compensation and interest payable by respondent

Validity and Transferability of DEPB-Post Export Licence:
The petitioner, a business entity known as 'Bhawani Textiles,' was granted a DEPB-Post Export licence by the Government of India in July 2004, which was later renewed till August 2007. The licence was transferable, requiring a "telegraphic release advice" from customs authorities for transfer to another entity. The licence entitled duty benefits for specified goods, with the initial benefit amount being reduced following customs intervention.

Disputes Raised by Customs Authorities Regarding Duty Entitlement:
The customs authorities disputed the duty entitlement under the licence due to discrepancies in the goods exported compared to those described in the shipping bills. This led to the refusal of issuing the "telegraphic release advice," potentially resulting in the revocation of the licence benefits.

Interpretation of Relevant Legal Provisions and Precedents:
The legal counsels cited judgments to support their arguments: the petitioner referenced a Bombay High Court case emphasizing that once a product is approved under the DEPB Scheme, customs authorities cannot challenge its classification. However, the respondent's counsel argued that the customs had the authority to investigate and determine duty entitlement based on the actual import/export activities.

Denial of "Telegraphic Release Advice" and Revocation of Licence Benefits:
The customs authorities' refusal to issue the "telegraphic release advice" without following due process was deemed wrongful by the court. The failure to initiate proper proceedings for licence revocation after raising objections was highlighted as a procedural flaw.

Delay in Filing the Writ Petition:
The petitioner delayed filing the writ petition until January 2007, approximately one and a half years after the customs authorities' objection letter in July 2005. Despite the delay, the court found the licence valid at the time of filing.

Compensation and Interest Payable by Respondent:
The court held the customs authorities responsible for preventing the petitioner from utilizing the licence and ordered the respondent to compensate the petitioner for the loss of licence value. A sum of Rs. 9,47,615/- was awarded, along with simple interest at 10% per annum from July 2005 until payment. The court excluded the period of delay in filing the writ petition from the interest calculation.

In conclusion, the court allowed the writ petition, directing the respondent to pay the compensation and interest as specified, emphasizing the importance of following proper procedures and timelines in administrative actions.

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