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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 ..... then, para 2A cannot be read down and in the manner suggested by Mr. Sridharan. That would be doing violence to its plain language. That course is not permissible in law. The exemption from Safeguard Duty and Antidumping Duty is not available simply because the materials are imported against the authorization which has been made transferable on or after 18th April, 2013 by the Regional Authority. In these circumstances, the alternate condition also fails. Decided against appellant. - Writ Petition No. 9955 of 2013, Writ Petition No. 9009 of 2014 - - - Dated:- 30-1-2015 - S. C. Dharmadhikari And A. A. Sayed,JJ. For the Petitioner : Yogesh Rohira and PDS Legal, Mr. V. Sridharan, Senior Counsel, with Prakash Shah, Jas Sanghavi i/b. For the Respondent : Mr. Pradeep S. Jetly with Smt. S. V. Bharucha and Shri N. D. Sharma JUDGMENT (Per S. C. Dharmadhikari, J.) By these Writ Petitions under Article 226 of the Constitution of India, the Petitioners are praying for striking down Notification No.2(RE2013)/ 200914 dated 18th April, 2013 (Annexure' A') issued for retrospective amendment of Foreign Trade Policy and corresponding amendment to Customs Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 dated 10th October, 2013 with the office of the Respondent No.4. 4] Upon inquiries with the officers of Respondent No.4, the Petitioners were orally informed that no exemption from Antidumping Duty would be available on the transferable DFIA as the endorsement of transferability is after 18th April, 2013. 5] They also rely upon a letter dated 1st August, 2013 which has been issued by an officer through the Ministry of Commerce, Government of India, that the provisions of Notification No.2 dated 18th April, 2013 would be applicable in respect of such DFIAs where transferability has been endorsed on or after 18th April, 2013. This opinion was reendorsed by another letter dated 16th September, 2013. It is stated that on 17th September, 2013, Notification No.45/2013 was issued by further amending a Notification No.98/2009 dated 11th September, 2009 providing therein that exemption from Safeguard Duty and Antidumping Duty shall not be available in case materials are imported against an authorization or transferability on or after 18th April, 2013 by the Regional Authority. 6] Chapter 4 of the Foreign Trade Policy and Handbook of Procedures, 200914 (17th Edition 2012) contains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, for items in gems and jewellery sector value addition as prescribed under paragraph 4A.2.1 of HBP v1. shall apply. Similarly, for items where a higher value addition has been prescribed under Advance Authorization Scheme, the same value addition for DFIA shall be applied. 4.2.5 Export Obligation Procedure and time period related to fulfillment of Export Obligation have been laid down in Chapter 4 of HBP v1. 4.2.6 Transferability (a) Once export obligation has been fulfilled, request for transferability of Authorization or inputs imported against it may be made before concerned RA. Once transferability is endorsed, Authorization holder may transfer DFIA or duty free inputs, except fuel and any other item(s) notified by DGFT. However, for fuel, import entitlement may be transferred only to companies which have been granted authorization to market fuel by Ministry of Petroleum and Natural Gas. (b) Wherever SIONs prescribe actual user condition and in case of Acetic Anhydride, Ephedrine and Pseudo Ephedrine, DFIA shall be issued with actual user condition for these inputs and no transferability shall be allowed for these inputs even after fulfillment of export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 11] The Foreign Trade Policy was amended and new subparagraph 4.2.6(d) was inserted in the same by Notification No.2 dated 18th April, 2013 and that reads as follows: 4.2.6(d) Exemption from Antidumping Duty and Safeguard Duty would be available on actual user basis only i.e. before endorsement of 'transferability'. 12] On the same date, the Customs Notification No.98/2009 dated 11th September, 2009 was amended vide a Notification No.24/2013 by renumbering the then existing paragraph 2 as paragraph 2B and inserting before it new para 2 and 2A. 13] We are, then, shown the amendments to this Notification No.98/2009. The amendments carried out on 17th September, 2013 by Notification No.45/2013 provide that the exemption from Safeguard Duty and Antidumping Duty shall not be available in case materials are imported against the authorization or transferability on or after 18th April, 2013 by the Regional Authority. The Notification further provided that in case imported materials are transferred with permission the importer shall pay the Antidumping Duty along with interest at the rate of 15% per annum from the date of clearance on import of the said materials. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for availment of the exemption, that does not mean that the Petitioners case is to be treated differently. In other words, the Petitioner must be granted the same benefits and exemptions and amendment made to the Notification will not apply to cases in which the advance licences have been issued prior to the amendment being brought into force. The amendment could not be applied to cases where the holder of the licence had fulfilled the export commitment. In these circumstances, the Petitioners are entitled to the reliefs claimed in the Writ Petition. 18] Mr. Sridharan has submitted that there is no power either under section 25 of the Customs Act, 1962 or section 5 of the Foreign Trade (Development and Regulation) Act, 1993 to amend either the notification or Foreign Trade Policy retrospectively. It is submitted that there is no provision either under section 25 of the Customs Act, 1962 or the Foreign Trade (Development and Regulations) Act, 1992 to amend retrospectively the exemption notification or the Foreign Trade Policy respectively. It is now well settled position of law that the subordinate legislation cannot be amended retrospectively unless the power to amend the subor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Policy reserved rights in public interest to make any amendments to the policy. That amendments can be made by issuance of a Notification and in terms of the powers conferred by section 5 of the Foreign Trade (Development and Regulation) Act, 1992. Para 2.4 of the Foreign Trade Policy envisages that the Director General of Foreign Trade may specify procedure to be followed by an exporter or importer or by any licensing or any other competent authority for purpose of implementing provisions of the Foreign Trade (Development and Regulation) Act, 1992, the rules and the orders made thereunder so also the Foreign Trade Policy. The Petitioners are not entitled to claim the benefits or the exemptions beyond what is stipulated in the policy. 21] Mr. Jetly submitted that para 4.2.6 of Foreign Trade Policy allows transferability of DFIA once export obligation has been fulfilled. The rationale behind DFIA transferability is that some exporters use indigenous raw materials, materials from their stock or manufacture raw material in house in stead of imported material. This saves valuable foreign exchange. To give relative benefits of saved custom duty, DFIA is made transferable. Under it th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it appears that the Retransfer is in favour of M/s. Pushpanjali Floriculture Ltd. The Petitioners have also annexed as (Annexure-H) a copy of the Bill of Entry. However, all the annexures prior to the same would denote as to how the licence (DFIA) has changed hands. This would all show as to how Petitioners are themselves not clear about the export obligations being discharged under this DFIA. 27] Be that as it may, the Petitioners are annexing the Notification No. 2 (RE2013)/ 2009-20014 dated 18th April, 2013. That contains amendments in Chapter 4 of the Foreign Trade Policy 20092014. The Foreign Trade Policy was amended and a new sub-para ( d) after para 4.2.6(c) was inserted in the said policy. That is reproduced in para 11 above. 28] The Customs Notification Nos.91/2009, 94/2009, 98/2009 and 104/2009 came to be amended by Notification No.24/2013 dated 18th April, 2013. This amendment to the extent relevant reads as under:- 98/2009Customs, dated the 11th September, 2009 [vide number G.S.R. 664(E), dated the 11th September, 2009]. In the said Notification, - (a) in the opening paragraph, for the words Customs Tariff Act, subject , the words and figure Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are transferred with the permission of Regional Authority, and where such permission is granted on or after 18th April, 2013 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. [F. No.605/36/2013DBK] (Sanjay Kumar) Under Secretary to the Government of India. 31] The Petitioners purchased the DFIA on 13th September, 2013. The claim of the Petitioners is that the exporter was issued the DFIA on 3rd April, 2013 but the holder of the licence exported the goods between August to November 2012. Thus, while they claim that there is no provision either under section 25 of the Customs Act, 1962 or the Foreign Trade Policy Act, 1992 to amend the exemption Notification or the Foreign Trade Policy retrospectively at the same time they argue as above. 32] However, we find that once the Foreign Trade Policy has been amended and it has been clarified that exemption from Antidumping Duty and Safeguard Duty would be availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition in the licence itself, we do not see any substance in the challenge raised by the Petitioners. It has been pointed out in the affidavit in reply by the Deputy Director General of Foreign Trade Policy that the policy was to give exemption from Antidumping Duty and Safeguard Duty only on actual user basis. Therefore, the actual user would get the benefit of exemption and not necessarily the transferrer. The Petitioner is a purchaser of this transferable licence but it cannot claim as of right the exemption which was admissible to their predecessor in title. If the predecessor in title as well had to comply with the conditions in the Foreign Trade Policy, then, all the more we do not see how there is any substance in the contentions of the Petitioners. The policy itself could have been amended and para 1.3 of the Foreign Trade Policy has been rightly relied upon. Thereunder the Central Government reserves right in public interest to make any amendments to the Foreign Trade Policy. Moreover, section 5 of the Foreign Trade (Development and Regulation) Act, 1992 also permits such a course. Once the Petitioner is placed in such a position, then, we do not see how the principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported into India against a duty free authorization. That DFIA is issued in terms of para 4.2.1 and 4.2.2 of the Foreign Trade Policy. The exemption is from whole of the duty of the customs leviable thereon as specified in the first schedule to the Customs Tariff Act, 1975 and from the whole of the Additional Duty, Safeguard Duty and Antidumping Duty leviable thereon respectively under section 3, 8B and 9A of the Customs Tariff Act. However, exemption is conditional. The Conditions are set out in the notification dated 11th September, 2009. It is very clear from these conditions that the exemption is not absolute. The obligations in terms of the conditions have to be discharged. Now, even if such authorizations are transferable, we do not see how these conditions attached to the exemption and equally to the license can be disregarded by us. It is clear that the transferee derives certain benefits on the strength of transfer in its favour. The condition sheet attached to the licence itself makes it clear that the exempt goods imported against the authorization would be utilized in accordance with the provisions of para 4.2.2 of the Foreign Trade Policy and other relevant provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the repeal of the statute under which that right accrued unless the repealing statute took away such right expressly or impliedly. Once again we have not found any vested right in the Petitioners. The right, which had accrued in favour of the transferor itself was conditional. It is the entitlement post such transfer and based on the prior acts of the transferor which is in issue. Even on that count we have found that so long as the transfer in favour of the Petitioners was not endorsed the benefit under the DFIA, if any, could not have accrued at all. If it had accrued upon such endorsement and the transfer was complete on that date, then, any benefit or entitlement accruing prior to that date would not enure for the benefit. Once this position is noted, then, no assistance can be derived by Mr. Sridharan relying on these judgments. 43] Equally, the principle which has been put in issue by relying on the principles of statutory interpretation by Hon'ble Justice G. P. Singh and the passages read out therefrom can have no application in the light of the above position. 44] The other decisions which have been relied on are based on the principle that a subordinate legisla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred for the value corresponding to the export effected and make necessary endorsement in favour of the first Petitioner to that effect or the first Petitioner be permitted to import or cause to be imported the said raw materials without payment of any duty. An order was passed at the time of admission of Writ Petition which was challenged before the Hon'ble Supreme Court and it was pointed out that by granting interim relief the Petition is virtually allowed. It was conceded that in accordance with the new policy licence has been issued to the Petitioners. The Hon'ble Supreme Court in view of these facts directed that the Writ Petition itself would have to be decided. Thereafter this Court noted the rival contentions and in para 8 found that the record indicates that admittedly the advance licence was given to the Petitioners on 14th September, 1993 on the basis of Export and Import Policy in force from April 1992 to 31st March, 1997. Thereafter the record further indicated that the quantity based advance licence was given to the Petitioners on the condition of fulfilling the export obligations. Those were fulfilled. Then, para 51 of the Export and Import Policy was refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the licence once granted. Hence, even this judgment is of no assistance. 49] We are of the opinion that other judgments relied upon and on the basis of applicability of principle of retroactivity can assist the Petitioners. That is on the footing of applicability of that principle. We do not find that any reference to this principle is necessary and in the present case. Hence, in the light of the above conclusion, the judgments relied on in the case of MRF Ltd. V/s. Assistant Commissioner (Assessment) Sales Tax and others reported in (2006) 8 SCC 702 and Southern Petrochemical Industries Co. Ltd. V/s. Electricity Inspector Etio and Others reported in (2007) 5 SCC 447 need be referred and in further details. 50] Before parting, we also find no substance in the contentions of Mr. Sridharan that para 2A of the Notification should be read down as inapplicable to any vested rights under authorization issued prior to 18th April, 2013. The argument is that the exports have been effected prior to 18th April, 2013. The transfer in favour of the Petitioners may be after that date but once the obligations have been discharged prior to 18th April, 2013, then, the above para needs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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