1997 (11) TMI 311 - HC - Customs

Summary

Issues Involved:

1. Eligibility of bicycle spare parts for Cash Compensatory Support (CCS) prior to the circular dated 20-6-1983.
2. Interpretation of "spare parts" versus "components and accessories" in the context of CCS.
3. Retrospective application of policy amendments.
4. Allegations of discrimination in policy application.

Detailed Analysis:

1. Eligibility of Bicycle Spare Parts for CCS Prior to the Circular Dated 20-6-1983:

The petitioner, a Small Scale Unit engaged in the manufacture and export of bicycle components and accessories, sought CCS for exports made during July/September 1980 and June/July 1982. The second respondent initially granted CCS but later sought recovery, claiming a wrong classification of the export products. The petitioner argued that bicycle spare parts were components and accessories, thus eligible for CCS under Serial Number 9(b) of the Ministry of Commerce's letter dated 10-1-1979. The second respondent, however, maintained that bicycle spare parts were not eligible for CCS prior to the circular dated 20-6-1983, which explicitly included spare parts.

2. Interpretation of "Spare Parts" Versus "Components and Accessories":

The petitioner contended that there was no distinction between components and spare parts in the context of engineering goods, asserting that large quantities of exported items should be considered components and accessories. The authorities had previously treated such exports as eligible for CCS, indicating an interchangeable use of the terms. The petitioner argued that the term "spare parts" in commerce parlance included components and accessories, especially when exported in bulk quantities.

3. Retrospective Application of Policy Amendments:

The petitioner argued that the amendment to include spare parts for CCS eligibility, effective from 20-6-1983, should apply retrospectively to their case, as their appeal was pending when the amendment was issued. The petitioner cited instances where retrospective application was allowed, such as in the case of Vacuum Flask refills, where the policy revision was applied to exports made between 17-12-1984 and 7-2-1986. The respondents countered that the amendment could not be applied retrospectively, and CCS eligibility should be based on the policy in force at the time of export.

4. Allegations of Discrimination in Policy Application:

The petitioner alleged discrimination, pointing out that the benefit of CCS was granted retrospectively for Vacuum Flask refills, but not for their bicycle spare parts. The petitioner argued that the authorities' earlier understanding and treatment of spares as components and accessories should continue, and the subsequent amendment was merely clarificatory, making explicit what was already implicit.

Judgment:

The court held that the terms "spares," "components," and "accessories" had been used interchangeably by the authorities, and the earlier grants of CCS indicated that spares were considered eligible. The court found that the authorities' attempt to recover the CCS granted earlier was unjustified, as the amendment was clarificatory and not a new policy. The court also noted the discriminatory treatment in comparison to the Vacuum Flask refills case, where retrospective application was allowed.

Conclusion:

The writ petition was allowed, and the orders of the respondents seeking recovery of CCS were quashed. The court upheld the petitioner's entitlement to CCS for the exports made prior to the circular dated 20-6-1983, recognizing the interchangeable use of the terms and the clarificatory nature of the amendment. The Rule NISI was made absolute, with no order as to costs.