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TMI Blog2008 (1) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... " of the Second Appellate Committee. Hence, this writ petition. 2. Petition is opposed by filing Statement of objections dated 22-9-2004 of Respondents 2 and 3 and Statement of objections dated 1-7-2004 of Respondent No. 1. In the Statement of objections of Respondents 2 and 3, it is contended that export of textiles and clothing from India is based on bilateral agreements entered into between Government of India and Governments of developed countries under the aegis of the erstwhile Multi Fibre Arrangement (MFA) governing international textile trade from the year 1974. The Textile Importing countries are referred to as "Quota countries" who have placed restraints on import of specified textile categories "Quota items" within the annual levels prescribed in the bilateral agreement and that the coming into force of the World Trade Organisation (WTO) in 1995, quantitative restrictions known as "Import quotas" in the bilateral agreements were changed under the WTO relating to Agreement on Textiles and Clothing (ATC). The quotas also known as export entitlements are allocated amongst individual exporters, for which a system of allocation of quotas is formulated so as to optimize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eques. The condition imposed for revalidation is that an exporter who exports not less than 90% of the export entitlement, its EMD shall be released in full. In case of utilisation upto 75% of fast moving items and upto 50% in case of slow moving items, EMD is forfeited tn proportion to the shortfall of utilization. If an exporter is aggrieved by any order of forfeiture, it could maintain an appeal to the First Appellate Committee and thereafter to a Second Appellate Committee. 3. The Statement of objections of the 1st respondent raises almost identical contentions as are advanced by Respondent No. 1 in its Statement of objections. In addition, it is contended that the exporter having taken the benefit of the garment export entitlement policy, sought for extension of time by furnishing a bank guarantee and having failed to export garments in terms of the quota provided, cannot be permitted to approbate and reprobate. It is stated that the petitioner is estopped from contending that no amount could be forfeited. The further contention of the 1st respondent is that the exporter did not place relevant material in support of its claim of force majeure. 4. Learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jeure, the authorities rightly considered and rejected the said plea. Lastly it is contended that the petitioner having failed to effect the exports in terms of the entitlement, the authorities were justified in directing forfeiture of the amounts from out of the bank guarantee, in full. 6. Sri. Devadass, learned Senior counsel for Respondents 2 and 3 contends that the petitioner having secured an allotment of a quota to export garments under the policy, without questioning the terms and conditions of revalidation, cannot be permitted to approbate and reprobate by calling in question the policy that too, after short export of garments. According to the learned Senior counsel, quota for export of garments once allotted to an exporter, it is presumed that the exporter would discharge its obligation to export garments to fulfill the quota allotted and in order to ensure such compliance, the policy providing tor forfeiture of the amounts from out of the bank guarantee as stated therein cannot be characterised as either irrational or unreasonable. Learned Senior counsel hastens to add that garment export is peculiar in its nature since quotas provided for each country, under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable for proportionate forfeiture and if less then 75%, forfeiture would be in full, from out of the amount in the Bank guarantee. The consent of the petitioner to be subjected to the terms of the policy, relating to forfeiture in the event of failure to fulfill the export entitlement, in the circumstances cannot permit it to approbate and reprobate nor assume inconsistent positions. 10. The contention that the terms of forfeiture are irrational and unreasonable in the circumstances is beyond pale of consideration. I say so because, the entire policy of allotting quotas is with the purpose of augmenting foreign exchange, which is of vital importance for the country and as a consequence, export of garments under the quota allocated is imperative and it is with the avowed object of maximising the utilisation of the quota, the policy provides a clause for forfeiture. The Central Government entitled to formulate a policy based on precise timing and manner of implementation of the quota to achieve a particular objective, more appropriately in the matters of bilateral trade, in my opinion, being peculiar in its nature, the Government was well within its rights to provide for forfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Government with a policy which was existing on the date of application as per previous policy. A prior decision would not bind the Government for all times to come. When the Government are satisfied that change in the policy was necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The Court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or withdraw or modify the export or import policy in accordance with the scheme evolved. ..." 12. In yet another decision of a learned Single Judge of the High Court of Delhi in Gokaldas Images Limited supra, 2006 (193) E.L.T. 264 (Del.) = 2007 (7) S.T.R. 347 (Del.) took the view that garment export being peculiar in its nature on account of quotas being provided for each country, the Government was well within its right to formulate a policy for full and maximum utilisation of the quota which cannot be int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner during the year 1997 is considered, would benefit the petitioner by way of proportionate forfeiture, need not detain the Court for long. Admittedly, the country categories in which the export entitlements allotted to the petitioner, as set out in the show cause notice Annexure-"C", are eight in number which were revalidated after 30-9-1997, at the instance of the petitioner, while consciously accepting the terms of revalidation including the clause of forfeiture. The policy makes it abundantly clear that the computation of percentage of utilisation must have reference to the export entitlements which were revalidated and the period covered by the Bank guarantees. In the instant case, the eight export entitlements under each country categories as set out in Annexure-"C" show cause notices were the only ones which were revalidated and since no exports were effected under anyone of those entitlements, in other words, the percentage of utilisation being zero, it is not possible to accept the contention of the learned Senior counsel that the overall percentage of utilisation in respect of the exports effected in all other categories of the export entitlements must be taken in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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