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TMI Blog2017 (3) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... orts from India against liquidation of rupee balance of the erstwhile USSR.’ Therefore the respondents’ contention that the EXIM Policy did not permit the discharge of export obligation in Indian Rupees, is untenable - petition allowed - decided in favor of petitioner. - WP(C) 1952/1997 - - - Dated:- 28-2-2017 - MR. S. RAVINDRA BHAT MR. NAJMI WAZIRI JJ. Petitioner Through: Mr. Rajesh Rawal, Adv. Respondents Through: Mr. Vivek Goyal, CGSC with Ms. Vanya Khanna, Adv. for UOI. NAJMI WAZIRI, J, (Oral):- 1. This writ petition has sought i) the quashing of a show cause notice dated 07.07.1995 issued by the respondent No. 2 as to why the Advance License dated 14.02.1994 issued to the petitioner be not cancelled and ii) a direction to the respondents to make corrections in the aforesasid Advance License showing export obligation to be made in Indian Rupees for an amount of ₹ 14,69,26,650/- instead of USD 45,91,457/-. 2. By an agreement dated 18.06.1991, the petitioner had agreed to supply 21.25 lakh pieces of LDPE liner bags to a Moscow based buyer. The price of each bag was fixed in Indian Rupees i.e. at Rs,.70.00 per piece and the total value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.62 (the individual CIF value of items at Sr. No. 2 3 shall not be utilised for import of other items permitted in the licence) . The approximate value of CIF was mentioned as ₹ 5,69,87,700 equivalent to USD 17,80,867/-. It further specified that the firm shall export of 2125000 for LDPE liner bags having LDPE 2429.333 MT. Packed in Packing material made of Board/While Card Board weighing 13.49 MT and processed Timber weighing 35.4 MT for and FOB value of USD 45,91,457/- and realise the proceeds in free foreign exchange only by making exports to GDA (sic) countries in fulfilment of export obligation in this case. 5. Immediately upon receipt of the said license, vide its letter dated 2.3.94, the petitioner sought an amendment in the advance license to: ................ to amend the condition at Serial No.4 on the reverse of the licence to read as that the foreign exchange to be realised in Indian Rupees by making export to RPA countries. Further also amend FOB value stated on the front side of the licence as ₹ 14,69,26,650 instead of USD 45,91,457/-. The Original Licence (both Copies), conditions slip and DEEC Book (all in original) ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ankers, the Punjab National Bank (PNB) for a long-term contract dated 18.6.1991. This money was released to you by PNB on 16.7.1993. It was also decided that the Ministry of Commerce would monitor the export effected against the advance payment by you. (b) You had misrepresented facts in your application for grant of above cited licence by failing to clarify that the FOB value of exports of ₹ 14.49 crores approximately was equivalent to USD 4.59 lakh approximately which led to the licence being issue for export realisation in free foreign exchange. 9. However Respondent No. 2, after taking into consideration the petitioners contentions against the said notice concluded inter alia in his Order-in-Original dated 28.05. 1997: I have gone through the facts and records of the case carefully. The short point for decision by me is whether the firm had suppressed/misrepresented material information in their application for grant of the said value based advance licence. Perusal of the application dated 4.10.93 by the notice firm for grant of the value based advance licence in question shows the following entries clearly: Col. 9 Total FOB value of Exports: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the show cause notice dated 23.3.94 was issued followed by the show cause notice dated 29.9.95. The respondents further contend that although the respondent No. 2 found that there was no mis-representation by the applicant in the application for grant of advance licence and the SCN proceedings did not result in any advance action against the petitioner, nevertheless, it would not confer any right or benefit to the petitioner to have Advance License for Rupee Payment Area, for the reasons that it could be issued only for a General Currency Area. 12. By a letter dated 14.09.1999, the petitioner had informed the respondent that it had effected eight export consignments worth ₹ 14,78,33,760.60 in terms of its aforementioned export order and the Advance License (page 359). It has also annexed copies of the Shipping Bills for Export of Duty Free Goods. These bills defined the product as LDPE liner bags , Quality: Width- 500 MM+- 10MM; Height 1000 MM+15-0 MM; Shipping Marks above seal 990MM + 15-0MM; Seal Width 5MM, Below Seal 10MM+-5MM, Thickness 220 Microns +-15%; Weight of bag 206 grams +-15% 13. In the interim, upon the DGFT s query as to the category of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted by the representative of the firm on 14.9.1999. The Committee also noted that all these exports have been permitted by the Customs Authorities on 'provisional' basis. The Committee further noted that in the shipping bills only LDPE has been indicated as a Duty Exemption Entitlement Certificate (DEEC) item, which implies that the exempt material used in the export product was only LDPE and the other two items, namely, (a) Board White Card Board and (b) Sawn Timber were not utilised (as packing material) in exporting the product as was required by the aforesaid condition imposed on the licence. In other words, the shipping bills do not indicate whether the product exported was packed in packing material made of Board/White Card Board and Processed Timber, as was required by the aforesaid condition of the licence. 15. Rule 7 (1) of the Foreign Trade (Regulations Rules) 1993, lists the grounds under which the Director General of Foreign Trade could refuse to grant or renew a license. Clause (n) thereof permits such action if: the applicant has attempted to obtain or has obtained cash compensatory support duty drawback, cash assistance benefits allowed to Registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 kgs against the requirement of 24,29,333 kgs being 15.95% of the LDPE content, is unsubstantiated and arbitrary. In the absence of the respondents showing any scientific or special evidence to the contrary, the petitioners declaration apropos the LDPE content in the bags in its Shipping Bills for exports, would have to be accepted. 19. The petitioner s claim pertains to March, 1993. Almost 24 years have gone by. The Court would not lose sight of the fact that this petition has been pending for almost two decades and the respondents have not taken a specific view in the matter and has not communicated a final decision either. 20. Appendix XIII of the Handbook of Procedures of EXIM Policy 1992-97, reads as under: VALUE ADDITION NORMS FOR EXPORTS FOR WHCIH PAYMENTS ARE NOT IN FREELY COVERTIBLE CURRENCY The trade with erstwhile Rupee payment Area countries has since been switched over to payment in hard currency except (i) for exports from India against liquidation of Rupees balances to the credit of erstwhile RPA countries; and (ii) for exports to the Russian Federation against India's repayment of state Credits granted by the former USSR. Following ..... X X X X Extracts X X X X X X X X Extracts X X X X
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