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TMI Blog2015 (2) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... short "DFIA") issued on or after 18th April, 2013. They are also seeking a direction to Respondent No.4 to assess the Petitioner's Bill of Entry No.3504275 dated 10th October, 2013 (Annexure 'H') with exemption from levy of any Antidumping Duty on imports made under Transferable DFIA No.0810119989 dated 3rd April, 2013(Annexure' G'). ] The reliefs are claimed in the following factual background: The Petitioners are engaged in the import/export business. They rely upon the scheme known as Duty Free Import Authorization (DFIA) introduced in the Foreign Trade Policy with effect from 1st May, 2006. As per para 4.2.1 of the Foreign Trade Policy, DFIA is issued to allow duty free import of inputs and other items which are required for production of export. Para 4.2.2 of this Policy permitted issuance of authorization and conferred thereby entitlement to exemption from payment of basic customs duty, Antidumping Duty and Safeguard Duty, if any, on the goods mentioned in the import under DFIA. 3] With effect from 18th April, 2013 the Foreign Trade Policy was amended and new sub para 4.2.6(d) was inserted therein vide a Notification No.2 dated 18th April, 2013. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e enables post export replenishment/remission of duty on inputs used in export product. The Duty Remission Scheme consists of Duty Entitlement Passbook (DEPB) Scheme and Duty Drawback (DBK) Scheme. 7] We are in this case concerned with Duty Exemption Schemes enabling duty free import of inputs required for export production and particularly Duty Free Import Authorization (DFIA). In that regard, we find the following stipulations in the Foreign Trade Policy:" 4.2.1 Scheme DFIA is issued to allow duty free import of inputs, fuel, oil, energy sources, catalyst which are required for production of export product. DGFT, by means of Public Notice, may exclude any product(s) from purview of DFIA. 4.2.2 Entitlement (a) Provisions of paragraph 4.1.3 shall be applicable in case of DFIA. However, these Authorizations shall be issued only for products for which Standard Input and Output Norms (SION) have been notified. (b) DFIA shall be issued in accordance with Policy and procedure in force on date of issue of Authorization. (c) In case of post export DFIA, a merchant exporter shall be required to mention only name(s) and address(s) of manufacturer(s) of the export product(s). Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s duty/excise duty. However, in case where CENVAT facility has not been availed, exemption from additional customs duty/excise duty would be available even after endorsement of transferability on DFIA. 4.2.7 CENVAT Facility CENVAT credit facility shall be available for inputs either imported or procured indigenously." 8] The Government of India in exercise of powers conferred under section 25 of the Customs Act, issued Notification No.98/2009 and exempted the materials imported into India against DFIA from the whole of duty of Customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 and from the whole of Additional Duty, Safeguard Duty and Antidumping Duty leviable thereon, respectively, under section 3, 8B and 9A of the Customs Tariff Act, 1975 subject to the conditions mentioned therein. The Notification provides that where the imports precede the exports, the importer has to fulfill the condition of exports. Thus, exemption is contingent upon subsequent fulfillment of export obligation. Where, however, the exports are already done and the licence is issued, there is assured benefit of exemption from payment of the customs duty. Only po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to be imported as duty free in terms of the licence. Annexure 'G' is a copy of the transferable licence. The case of the Petitioners is that the licence was not amended while granting transferability so as to deny any exemption from Antidumping Duty. The Petitioners imported the goods against the Bill of Entry referred above but the officers of Respondent No.4 informed the Petitioners that no exemption from Antidumping Duty would be available on this transferable DFIA. This was because the endorsement of transferability is after 18th April, 2013. 15] It is, therefore, aggrieved by such a stand of the Respondent No.4 and its officers that the Petitioners instituted this Writ Petition. 16] Mr. Sridharan, learned Senior Counsel, appearing on behalf of the Petitioners submitted that Chapter IV of the Foreign Trade Policy 200914 (for short "FTP") deals with the duty exemption and remission schemes. These are intended to promote export of goods. One of the schemes contained in Chapter IV is DFIA. The DFIA allows duty free import of inputs, fuel, oil, energy sources, catalyst which are required for production of export product. Para 4.2.2 (b) is entitled that DFIA shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, the exports have being effected prior to the amendment and under the un-amended Notification, the import of goods duty free is assured. Therefore, the Petitioners are entitled to import the goods covered by DFIA dated 3rd April, 2013 without payment of Antidumping and Safeguard Duty, even though the endorsement of transferability is post 13th April, 2013. The amendment to Foreign Trade Policy vide Notification No.2 (re2013)/ 2009-2014 dated 18th April, 2013 and customs Notification No.23/2013cus dated 18th April, 2013 are prospective and not retrospective. The amendment will not apply to exports made and DFIA obtained prior to date of amendment, even though imports are made after amendment by transference of the licence. 19] Mr. Sridharan has relied upon the following decisions in support of his contentions:1) Bakul Cashew Co. and Others V/s. Sales Tax Officer, Quilon and Another reported in (1986) 2 Supreme Court Cases 365; 2) K. S. Paripoornan V/s. State of Kerala and Others reported in (1994) 5 Supreme Court Cases 593; and 3) Sonia Fisheries V/s. Union of India reported in 1997 (90) E.L.T. 22 (Bom.) 20] On the other hand, Mr. Jetly, learned Senior Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferable on or after 18th April, 2013. That means exemption from Antidumping Duty and Safeguard Duty will not be available for all those DFIA's on which transferability has been endorsed on or after 18th April, 2013. The Antidumping Duty is payable because the L/C No.810119989 endorsed on the Bill of Entry has been made transferable on 19th April, 2013 which is after the cut off date of 18th April, 2013 that is mentioned in impugned Notification No.2 dated 14th April, 2013 and, therefore, the Petitioners are liable to pay Antidumping Duty. 23] For above reasons, Mr. Jetly submits that the Writ Petition be dismissed. 24] With the assistance of the learned counsel appearing for both sides, we have perused the Writ Petition, the annexures thereto, the affidavit in reply, the compilations containing the relevant statutory provisions, circulars/notifications as also the decisions relied upon. 25] It is common ground that the Petitioners are relying upon the transfer letter in their favour from M/s. Pushpanjali Floriculture Ltd. which transfers import licence No.0810119989 dated 3rd April, 2013. On this transfer letter, the Petitioners proceeded on the footing that they would get ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rization made transferable by the Regional Authority. 2A. In case the imported materials are transferred with the permission of Regional Authority, the importer shall pay an amount equal to the safeguard duty and antidumping duty leviable on the material so imported and transferred, but for the exemption contained in paragraph 1 above, together with interest at the rate of fifteen per cent per annum from the date of clearance on import of the said materials." 29] The Petitioners have also pointed out as to how the Secretary in the Ministry of Commerce, Government of India, decided that in respect of DFIAs, where authorization have been made transferable on or after 18th April, 2013, exemption from Antidumping and Safeguard Duty will not be available. 30] The Petitioners also point out the amendments which have been made in the Customs Notification No.98/2009 dated 11th September, 2009 by Notification No.45/2013 dated 17th September, 2013. That amendment Notification reads as under: " In the said Notification, - (a) in the opening paragraph, for the words and figure "Customs Tariff Act, except to the extent specified in paragraph 2 of this notification, subject", the words, fig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification on 18th April, 2013. That the Customs Notification grants exemption from the duties noted above. However, the Customs Authorities clarified that the exemption from Safeguard Duty and Antidumping Duty shall not be available in case materials are imported against an authorization made transferable by the Regional Authority. In case the imported materials are transferred with the permission of the Regional Authority, the importer shall pay the amount equal to the Safeguard Duty and Antidumping Duty leviable on the materials so imported and transferred. The further amendments to the Notification were necessitated because the Customs Authorities found that the insertion in the Foreign Trade Policy to disallow exemption from Antidumping Duty and Safeguard Duty once a DFIA is made transferable has been effected from 18th April, 2013. There could be situations wherein on that date certain commitments may have been made on the basis of the transferability of DFIA. Hence, to bring the exemption notifications and the amendments thereto in tune with the insertion in the Foreign Trade Policy that the further notification/further amendment dated 17th September, 2013 has been made. We d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FIA) scheme contained in Chapter 4 of the Foreign Trade Policy 20092014. He relied upon the entitlement under 4.2.2(b) and submits that transferability in terms of para 4.2.6 is permitted once export obligation has been fulfilled. Once the transferability is endorsed, then, all benefits can be claimed. If exports have been made before 13th April, 2013 or the licence has been issued before 18th April, 2013, then, in terms of the unamended policy, the benefits accrue even to the Petitioner. That is the submission founded on the above dates including 3rd April, 2013, the date of issuance of licence. It may have been purchased on 17th September, 2013 but once the export obligation was fulfilled the exemption is admissible. 35] Mr. Jetly, on the other hand, submits that once the position of the Petitioner as a transferee is noted, then, the above contentions have no substance. He submits that the date of import of the goods cannot be ignored. It is that date which must be held to be the relevant and applicable one. The DFIA scrips would be utilized for a benefit which will now accrue. Mr. Jetly submits that the utilization of the DFIA by the Petitioner is in preasenti. In that sense, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon these judgments to urge that there is no provision either under section 25 of the Customs Act, 1962 or the Foreign Trade Act, 1992 to amend the exemption notification or Foreign Trade Policy retrospectively. We are not in this case concerned with any retrospective amendment as claimed. The Petitioner relies upon the transferability of the DFIA but merely on the strength of the transferability the Petitioner does not derive any benefit. The DFIA may be transferable. However, once the entitlement of the Petitioner is from the transfer being endorsed in its favour, then, this principle cannot be of any assistance to the Petitioner. 38] Equally, we are not required to consider whether any subordinate legislation is being amended retrospectively. 39] In such circumstances, we do not think that the judgments rendered in the case of K. S. Paripoornan V/s. State of Kerala and Others reported in 1994 (5) SCC 593 and in the case of Govind Das and Others V/s. The Income Tax Officer and Another reported in 1976(1) SCC 906 can be of any assistance. 40] These judgments referred to the principle of retrospective operation and whether such operation can be inferred. The principle referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India, a decision which has been rendered by a Division Bench of this Court and reported in 1997(90) E. L. T. 22, the factual position was that an advance license was granted to M/s. Sonia Fisheries for import of Kraft paper other than ivory board, cardboard other than ivory board, HDPE/PP Granules, preservatives and raw material for fishing net in accordance with and on the basis of the Export Import Policy for April 1992 to March 1997 and the duty exemption scheme contained therein. 46] The norms were not fixed according to the Petitioners at the relevant time for items of import. The application of the Petitioners for issuance of advance licence was considered by the Advance Licensing Committee for fixation of norms as per the Import Export Policy. The Committee consisted of technical persons. It considered the Petitioners application and as per the said advance licence, the Petitioners were required to export sea food. The first Petitioner in the Writ Petition was issued the requisite Duty Exemption Entitlement Certificate in that behalf which mentioned the details of the items to be imported under the said licence. The Petitioners submitted that on the basis of this licenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners have complied with their obligation of export and asked for endorsement of transferability on the basis of complying with the conditions of exporting the goods, the authority was not entitled to withhold or suspend the licence or change the material terms of the licence. It is in that context that this Court held that once the licence terms permitted the Petitioners to import duty free goods, the norms published on 20th January, 1995 would not have retrospective effect enabling cancellation or modification of the licence, then, the Petitioners cannot be called upon to surrender the licence for endorsing the transferability. That would be completely arbitrary. 47] In the above admitted factual backdrop that this Court relied upon the observations made by the Hon'ble Supreme Court in the case of S. B. International Limited Etc. V/s. Asstt. Director General of E.T. & Ors. Etc. reported in 1996 (82) E.L.T. 164. The Hon'ble Supreme Court in that case considered whether a vested right accrues to the Appellant therein for issuance of advance licence as per the value addition norm in vogue on the date of filing of the applications or whether any subsequent change in pol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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