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TMI Blog2008 (1) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexure-"H" and for a declaration that the AEPC and the Appellate Committees have no jurisdiction to adjudicate upon the matter. 2. Petition is opposed by filing Statement of Objections dated 15-12-2004 of the 3rd respondent. 3. On behalf of Respondents 1 and 2, 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 the expor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The condition relating to forfeiture 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 in 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. The Appellate Committees rejected the petitioner's claim of force majeure in the absence of relevant material constituting substantial legal evidence of the fact that failure to fulfil the export obligation was due to acts beyond the control of the exporter. 4. The Statement of objections of the 3rd respondent raises almost identical contentions as are advanced by Respondents 1 and 2. In addition, it is contended that the exporter having taken the benefit of the garment export entitlement policy 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and rejected the said plea. Lastly it is contended that the petitioner having exported garments upto 85.42% of the export entitlement, the authorities were justified in directing forfeiture of the amounts from out of the bank guarantee, in proportion, to the extent of unfulfilled quota. 7. Sri Devadass, learned senior counsel for Respondents 1 and 2 contends that the petitioner having secured an allotment of a quota to export garments under the policy, without questioning the terms and conditions of forfeiture, 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 fulfil the quota allotted and in order to ensure such compliance, the policy providing for 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 pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titlement, in the circumstances cannot permit it to approbate and reprobate nor assume inconsistent positions. 11. 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 forfeiture and therefore, cannot be termed as either irrational or unconstitutional. It must be borne in mind that there must be free play with the Government in matters of economic policies which are not subject to judicial review, unless demonstrated to be contrary to statutory p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be entitled to revise the policy and lay dawn 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..." 13. 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 interfered with. Having read the entire text of the judgment, I find no good reason to deviate from the reasons, findings and conclusions arrived at by the learned Judge. 14. As regards the claim of existence of force majeure condition, it is contended that though the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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