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TMI Blog2013 (11) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Petitioner : Mr. Raja Chatterjee, Ms. Runa Bhuyan, Ms. Rita Jha Ms. Manisha P., Advs. For the Respondents : Mr. Kuljeet Rawal Mr. Jagjit Singh, Advs. for R-3. JUDGMENT V. K. Jain, J. Section 5 of the Foreign Trade (Development Regulation), Act, 1992 provides for formulation and announcement of the Export and Import Policy by the Government of India and amendment of the said policy from time to time. Section 11 of the said Act provides that no export can be made except in accordance with the provisions of the said Act, Rules and Orders made thereunder, as also the Export and Import Policy for the time being in force. Pursuant to the aforesaid provision, the Government of India, vide notification dated 12.11.1999 announced the policy for allotment of entitlements for the year 2000-2004 in respect of the countries where the exports are covered by restraints under the provisions of Agreement on Textile and Clothing. Similar policy was notified by the Government for previous years as well. Under the said policy, export of garments and knit-wears to certain countries such as USA, Canada and European Union known as Quota Countries could be undertaken only on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of shipment to prove such utilization in the prescribed manner and within a prescribed period, the guarantor was to pay the guarantee amount due and payable under the guarantee, without any demur and raising any further controversies, merely on the first written demand from AEPC. Any such demand made on the guarantor was to be conclusive as regards the amount due and payable by the guarantor as per the guarantee. The First Come First Serve (FCFS) Quota was introduced with a view to boost new exporters who did not have the confirmed quota in their hands so that they get an opportunity to undertake export of readymade garments to the quota countries. 3. Noticing that the exporters were not able to utilize 100% of the endorsed quota which resulted in loss of precious foreign exchange to the country, besides causing denial of such quota to the genuine exporters who were in a position to undertake exports, and also to reduce wastage of quota which tarnishes the image of the country and affects bilateral agreement on account of such non-utilization, AEPC used to release additional quantities of quota so as to ensure optimum utilization. 4. In case the quota utilization was above 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,260/-. Another show cause notice dated 9.5.1996 on account of non-utilization of FCFS Quota was issued to the said petitioner seeking to forfeit a sum of Rs.3,56,745/-. The aforesaid notices were adjudicated vide two separate orders, the first one being dated 13.8.1996 and the other dated 19.7.2001. In the appeal filed by it, the petitioner claimed that they could not remove rectifiable discrepancy and on account of late receipt of fabric which also had weaving defects and therefore entire fabric was rejected and the order was cancelled by the buyer. The aforesaid contention, however, was rejected by the First Appellate Authority vide order dated 13.8.1996 noticing that utilization was only 62.23%. Disposing of the appeal vide order dated 22.3.2003, against the second order, the First Appellate Authority did not accept the contention of the petitioner that the goods were ready but the buyer postponed the order and rejected the appeal noticing that the quota utilized was only 58.13%. One of the second appeals filed by the petitioner was dismissed whereas the other second appeal was partly allowed vide order dated 30.9.2003. The petitioner filed a writ petition before the Karnataka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity thereupon passed an order forfeiting a sum of Rs.25,23,413/-. The First Appellate Authority did not find merit in the contention of the petitioner claiming go-slow activity of the concerned unit and short-realization due to change in the mode of shipment from sea to air and dismissed the said appeal vide order dated 7.10.2003. However, in the second appeal, the petitioner produced copy of the agreement entered into between the workers and the management in support of its plea of strike and full relief was, therefore, extended to it for the said strike period. The petitioner filed a writ petition before the Karnataka High Court which came to be dismissed for want of territorial jurisdiction. 11. Being aggrieved from the orders passed by AEPC as also the orders passed by the First Appellate Authority and the Second Appellate Authority, the petitioners are before this Court seeking quashing of the orders passed by the Second Appellate Authority. 12. The impugned orders have been assailed by the petitioners on the following three grounds:- i. Quotas are allotted by individual countries for each category. For example, if USA is allotting quota of one lakh pieces to India then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss quota to the exporters. A perusal of the affidavit filed before Karnataka High Court in WP No. 43683 of 2004, a copy of which has been filed by the petitioners, would show that despite the FCFS Quota, issued by AEPC in the years 2001, 2002 and 2003 being 130%, 149.08% and 120% respectively, the actual quantity utilized in the aforesaid year was only 91.68%, 88.44% and 98.57% respectively. The aforesaid statement of quota utilization would show that in the past, even after releasing substantial additional quota, the targeted utilization of 100% could not be achieved by the exporters. One can easily visualize to what extent the utilization would have been had AEPC not released any additional quota to the exporters in the aforesaid years. Considering the past experience, it can be hardly be disputed that release of additional quota to the exporters was always in the public interest. The extension of time granted to the exporters for utilizing the second part of the quota up to 31st December is only a concession given to the exporters who are otherwise expected to utilize the first part up to 31st May and the second part up to 30th September of the year. The aforesaid extension gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The second contention of the appellants has no merit and was not raised before the learned Single Judge nad has no basis and foundation in the pleadings. Even otherwise, it is not possible to accept the said contention that AEPC had abandoned the Garment Export Entitlement Policy by over-issue of quota to exporters. The appellants and other exports were issued quota and they had exported garments on the basis of the said quota under the Policy. The appellants had also furnished and given bank guarantees or had deposited earnest money in terms of the Garment Export Entitlement Policy. Abandonment as such requires mental intention and conscious decision. Garment Export Entitlement Policy was statutory in character. We cannot accept the contention of the appellants that the Garment Export Entitlement Policy was abandoned .. 15. As regards the second contention, it would be seen from a perusal of the policy that it is only the second part of the quota valid till 30th September, which can be extended up to 31st December of the year on payment of EMD/BG at the specified rates. There is no extension of the first part of the quota which is valid till 31st of May. Therefore, for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by seeking extension of the time-period up to 31st of December. It is when such extension is granted that the same is made subject to certain conditions as per the very terms of the original entitlement. The exporter, with open eyes, accepts the same. In order to ensure due compliance and utilisation of the export entitlement, the BG/EMD condition is put. The same is not utilised or encashed if the exporter performs at least to the extent of 90%. 32. The second plea of the petitioners also has to fail because it is based on a premise as if the exporter has a right to export till 31st of December. This is no so. The entitlement is given to export up to 30th of September. The exporter has a right to surrender the unutilised quota, but if chooses to seek extension of time till 31st of December to perform its obligations, naturally, the performance has to be judged on the touch-tone of the performance after 30th of September and not by including the performance for the prior period. This is the methodology adopted by the respondents while determining the performance of the exporter dependent on the extended quota and rightly so. Thus, this issue is no more res integra. 17. I fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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