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TMI Blog2014 (8) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner remaining non-productive. Apparently, abandoning the DD3 channel by Doordarshan, put paid to the plans of the petitioner to export programme capsules that were to be produced for airing on the said channel. Consequently, the petitioner suffered business losses and could not discharge it is export obligations. The losses or profits made by an entrepreneur or its business plans going awry, cannot possibly be a ground that entitles a businessman to avail duty exemption/concession. In the normal course, the petitioner would be required to pay full duty on the equipment imported by it. Under the EPCG scheme the petitioner was exempt from paying full duty only on the condition that it would employ its assets to earn foreign exchange and export video software to the extent of the CIF value of its imports. This condition, admittedly, not having been met, the petitioner would be liable to pay the requisite duty and other levies. - Decided against assessee. - W. P. (C) 934/ 2010 - - - Dated:- 30-7-2014 - Vibhu Bakhru,JJ. For the Petitioner : Mr Gaurav Agarwal, Mr Neel Kamal Mishra and Mr Jatin Zaveri For the Respondents : Mr Akshay Chandra and Mr Raman Kumar for R-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anted to the petitioner for 18 months from the date of endorsement of the licensing authority without composition fee and benefits of paragraph 5.4(i) of the then existing Foreign Trade Policy was extended to the petitioner. Apparently, this implied that subject to certain conditions, the petitioner was permitted to fulfill its export obligations by exporting an alternate export product, either by itself or through its group company. 2.3 The period for discharging the export obligations was extended by an endorsement on 13.09.2007 for a period of eighteen months therefrom. Concededly, the petitioner failed to export any product during the extended period and once again approached the DGFT, by its letter dated 19.03.2009, seeking inclusion of an alternate export product as well as further extension of time, by 18 months, to meet its export obligations. This request was considered by the EPCG Committee on 12.11.2009 and was rejected. The decision of the EPCG Committee was communicated to the petitioner by the impugned order. The EPCG Committee held that the firm has already availed an E.O. Extension for fourteen and a half years and still could not make any export. and according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diamonds in place of video software, is unfair and arbitrary. The petitioner averred that once Doordarshan had cancelled its plans to launch DD3, the petitioner s export obligations were hit by an impossibility of performance and the law cannot compel the performance of the impossible, as per the maxim of impossibilium nulla obligatio est. Therefore, the petitioner submitted that its export obligation stood frustrated or discharged by the doctrine of frustration. 5. It is also contended on behalf of the petitioner that although, the Appellate Authority, by its order dated 08.06.2006, had accepted the plea that the petitioner could not fulfill its export obligations because of reasons beyond its control, it failed to give complete relief to the petitioner and only granted further time of 18 months to meet the export obligation by exporting some other products through its sister concern. It is further contended that the license granted to the petitioner was not endorsed for export of Cut and Polished Diamonds the alternate export product and therefore the extension of time granted by the Appellate Authority ought to commence from the date when the licence is endorsed and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sses and could not discharge it is export obligations. The losses or profits made by an entrepreneur or its business plans going awry, cannot possibly be a ground that entitles a businessman to avail duty exemption/concession. In the normal course, the petitioner would be required to pay full duty on the equipment imported by it. Under the EPCG scheme the petitioner was exempt from paying full duty only on the condition that it would employ its assets to earn foreign exchange and export video software to the extent of the CIF value of its imports. This condition, admittedly, not having been met, the petitioner would be liable to pay the requisite duty and other levies. 9. The contention that it was impossible for petitioner to perform its obligation, and thus applying the maxim of impossibilium nulla obligatio est, the petitioner was absolved from paying import duty and other levies, is bereft of any merit. The said maxim has no application in the present case. The frustration of the venture, if any, as planned by the petitioner with Doordarshan, does not alter or affect the obligation of the petitioner to export goods/services of the requisite value and in the event of its fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the firm. 11. In terms of the said order, the period for performing the export obligation was extended by eighteen months and the petitioner was also granted the benefit of paragraph 5.4(i) of the then prevailing policy. It is expedient to refer to paragraph 5.4(i) of Foreign Trade Policy 2004-2009, which was applicable at the material time and the same is quoted below: Export obligation 5.4 The following conditions shall apply to the fulfillment of the export obligation:- (i) The export obligation shall be fulfilled by the export of goods capable of being manufactured or produced by the use of the capital goods imported under the scheme. The export obligation may also be fulfilled by the export of same goods, for which EPCG licence has been obtained, manufactured or produced in different manufacturing units of the licence holder/specified supporting manufacturer (s). When Capital Goods are imported for pre/ post- production or license is taken for import of spares, the license holder shall fulfill the export W.P.(C) 934/2010 Page 10 of 13 obligation by export of products manufactured from the plant / project to which the pre/ post- production capital goods/ spares a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce. This benefit was extended to the petitioner by the order passed by the Appellate Authority and in addition, the licence period was extended. The respondent has produced a copy of the licence amendment sheet which bears the endorsement: THE EXPORT OBLIGATION PERIOD OF THIS LICENCE IS EXTENDED FOR 18 MONTHS FROM THE DATE OF ENDORSEMENT I.E. 13.09.2007 AS PER ORDER GIVEN IN ORDER IN APPEAL BY DGFT, NEW DELHI . 13. The petitioner s contention that since the aforesaid endorsement did not mention that the petitioner could export Cut and Polished Diamonds , the endorsement for extension of period ought to be counted from the date when the licence is endorsed with respect to such goods, is clearly an afterthought and cannot be accepted. It is material to note that even during the extended period i.e. 13.09.2007 to 12.03.2009, the petitioner did not effect any exports. Further, there is neither any communication on record nor any material to show that while the petitioner was ready and willing to comply with the requirement of the policy, it was impeded in doing so for want of the requisite endorsement. After the extended period for fulfilling the export obligations had expired, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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