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TMI Blog1986 (2) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 1965 and 4th April, 1966. On 5th June, 1966, there was devaluation of the Indian Rupee. In order to lessen the hardship of the traders who had contracts with foreign buyers Notification was issued by the Central Government under Section 25(1) of the Customs Act, 1962, (hereinafter referred to as the said Act) on 11th June, 1966. Under the said notification it was provided that the goods specified in the Schedule to the said notification would be exempt from the duty of Customs leviable thereon under the 2nd Schedule of the Indian Tariff Act, 1934. It was recorded by the learned Judge that subject to certain conditions mentioned in the said notification it is undisputed that the goods in question involved in that writ petition are the goods which were specified in the Schedule under the said notification. The conditions mentioned in the said notification are inter alia as follows : (A) That the goods are sought to be exported under valid contracts with their sales price expressed in foreign currency, entered into on or before the 5th June, 1966. (B) That the contracts referred to in Clause (A)(i) were registered or submitted for registration with the export contracts re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on 6-6-1966 from the said forward exchange contract." 3. Apart from the question of the alleged export of excess quantity, the dispute between the Petitioner and the department is a short one. The question is whether the conditions required to be fulfilled under the said notification have been fulfilled or not and, accordingly, whether the Petitioner was entitled to the exemption of the duty or not. The admitted position further is that both the Clauses (A) and (B) have been complied with. The only contention sought to be raised by the department is that the contract with the Bank authorised to deal in foreign exchange in India was made not subsequent to the contract for the sale of the goods referred to in Clauses (A) and (B). The Petitioner contended firstly that there was a bond in the present case and that in view of the bonds the authorities concerned were not competent to issue the impugned show cause notices and that the Department can institute a suit in the appropriate court for enforcement of their rights under the Bond. This contention was, however, rejected by the learned Single Judge. It was held that such a clause in the bond does not in any way derogate or take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notices which provide that the principles enunciated in Section XXVIII of the Exchange Control Manual would govern such contracts for the sale of foreign exchange and in particular reliance was placed on paragraph 4 of the Manual which is as follows :- Contracts forward purchase of foreign exchange may be entered into by authorised dealers with their constituents who are exporters provided satisfactory documentary evidence is produced to the authorised dealer to show that the foreign exchange offered is the expected proceeds of a shipment already made or to be made against a firm order received by the exporter. 5. The learned Judge held that strictly speaking the conditions of the notification did not refer to the requirements of the Exchange Control Manual and therefore, from one point of view it could not be contended that non-fulfilment of the conditions of the notification could not be inferred by non-fulfilment of any provisions of the Exchange Control Manual. However the learned Judge held that even if has not been specifically embodied or required to be followed, it might be from another view point, that is that the conditions were laid down in the backg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that clause C of the notification meant that such agreement with the authorised dealer must be subsequent to the agreement for the sale of goods other wsie fixed price cannot be ascertained. For the reasons given by the learned Trial Judge we reject this contention. We may point out in this context that as rightly pointed out by the learned Trial Judge, clause (C) merely means that the contracts are the contracts which are referable to the categories of clauses (A) and (B). In other words the contracts in clause (C) should be in respect of the types of contracts which are mentioned in clauses (A) and (B) of the notification. There has been no stipulation by that condition that the contracts mentioned in clause (C) should be subsequent to contracts mentioned in clauses (A) and (B). 9. There is another aspect of this matter. The manual in our view has no application in the present case for the reasons stated by the learned judge. It is to be pointed out that the said Manual provides that forward purchase of foreign exchange may be entered into by the authorised dealers with their constituents who are exporters provided satisfactory documentary evidence is produced to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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