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TMI Blog2017 (4) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner. 2. The petitioner is engaged in the manufacture of home appliances and automotive parts and components for which raw material and inputs are required to be imported. 3. The petitioner was accordingly issued 40 Advance Licenses to which exports obligations were attached. In terms of the Advance Licenses, the export obligations attached thereto had to be fulfilled in value as well as quantity. 4. In respect of 29 of the 40 Advance Licenses, the petitioner had discharged export obligations both in terms of value and quantity. However, in respect of balance 11 licenses, the petitioner had discharged its export obligations more than 5 times in value but there was deficiency in quantity. 5. The petitioner contends that: (i) as the market for petitioner's products had collapsed by reason of worldwide recession and the petitioner had become sick, its case was referred to the BIFR. Paragraph 4.1.9 (A) of the Foreign Trade Policy 20042009 would thus be attracted. 6. The said paragraph provided that a sick industrial company registered with the BIFR would have the right to a five year extension of the period allowed for discharge of export obligations. In fact, by an order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... towards discharge of the petitioner's export obligations. To this, the petitioner was entitled as a matter of legal right irrespective of exercise of discretionary indulgence by the PRC in favour of the petitioner. 12. Mr. Ganesh argued that with effect from 2009, the Import Controlling Authority changed the alphanumeric numbering of import licenses and also changed the software used by them for recording the fulfilment of export obligations, as a result of which, the system and software of the respondent did not accept and record the earlier license numbers given to licenses issued prior to 2009 in connection with the shipping bills covering export made in relation to the licenses. These exports could not be considered for no fault of the petitioner, but only because of the software. Mr. Ganesh strenuously argued that the petitioner is entitled to have these exports taken into consideration, as a matter of legal right even without exercise of discretionary indulgence by PRC in favour of the petitioner. 13. Mr. Ganesh argued that a large number of other exporters, including in particular, those who have made their exports on free shipping bills had applied to PRC for relaxation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ports made to foreign countries. Mr. Ganesh argued that this ground taken by the PRC was not correct as waiver had been granted in respect of actual exports in a large number of cases. In any case, relaxation in case of a deemed exports and denial thereof in case of actual exports was arbitrary, discriminatory and unreasonable. 18. Mr. Ganesh argued that the request for clubbing of licenses was rejected by relying on time limits which were introduced for the first time by amendments made on 13.10.2011 to the Handbook of 2009-2014. This amendment had no application on the present case. 19. Mr. Ganesh argued that the legality and the validity of the impugned order of PRC dated 13.10.2015 had to be judged on the basis of reasons contained therein. The grounds or reasons stated in the impugned order are manifest, patent and self-evident. They are grossly erroneous. The order is therefore required to be set aside by this Court. The grounds cannot be improved by affidavit in this context. 20. The learned Central Government Standing Counsel appearing on behalf of the respondents, Mr. Akshay Makhija submitted that the petitioner had prayed for clubbing of 11 Advance Authorizations issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Makhija submitted that PRC rightly rejected the prayer for condonation of procedural lapses of non-mentioning details of Advance License numbers in the shipping bills for shipments made on the basis of BIFR package during the period 2006-2007 to 2014-2015 as shipping bills without details of authorization mentioned on it are treated as 'free shipping bills' and are not assessed by the Customs authority and consumption of exempted materials is not examined. 27. Mr. Makhija argued that under the Advance Authorization Scheme the petitioner had availed of duty free imports and thus it was under an obligation to utilize the said imports within a specified period. Even if the period is condoned, the petitioner needs to be able to demonstrate that it did, in fact, use the goods so imported and after adding value to the same exported the resultant products. It is not possible to ascertain at this juncture if the same had in fact been done merely on the basis of value of the goods exported without any proof of the exempted materials consumed in the resultant products. Even after shipment within the specified period, the applicant had the option to approach the Customs authority for ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mr. Makhija argued that under Section 19 (2) of the Sick Industrial Company (Special Provisions) Act, 1986, there was a deemed sanction of the provisions of the Scheme within six months even if no extra sanction was granted by the concerned authority. Therefore, the argument that the concerned authority did not pass orders in compliance with the Scheme till 2010 are nothing but an excuse to cover up the petitioner's own lapses and failure of the petitioner to act with duly diligence. 35. Mr. Makhija submitted that failure on the part of the petitioner to utilize the inputs imported without paying the duty for manufacture of resultant product and fulfilling the stipulated export obligation even after grant of extension up to 31.01.2014 has resulted in huge loss of revenue to the government exchequer. Mr. Makhija finally argued that the Director General, Foreign Trade might, in public interest pass such orders or grant such exemption, relaxation or relief as he may deem fit and appropriate, on grounds of genuine hardship and adverse impact on trade, to any person or class or category of persons from any provisions of Foreign Trade Policy or any procedure. While granting such exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective and apply to Licences issued after 13.10.2011. The petitioner sought facility of clubbing in respect of Licences issued before 2002. 42. It is difficult to appreciate the logic as to why the requirement of mentioning of Licence details should be waived only in case of deemed exports to Special Economic Zones, but not in case of actual exports to foreign countries. Moreover, the contention of the petitioner that the waiver had in some other cases been allowed even in case of actual exports out of India, has not seriously been refuted. 43. Mr. Ganesh has rightly argued that the validity of the impugned order of the PRC has to be adjudged on the basis of reasons contained therein and not the pleadings in the Counter Affidavit or the submissions made in Court. Thus, Court need not deal with the submissions of Mr. Makhija which are not borne out by the reasons in the impugned order. 44. Even assuming that the petitioner had sought clubbing of Licences issued from 1989 to 2002, the PRC could have moulded the relief by excluding the pre 1992 Licences, even though there may not have been any request for segregating the pre 1992 Licences. 45. Mr. Ganesh rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that these documents fully establish the exports. The documents have never been doubted or questioned by the respondents. The exports have been certified by the Customs and the Excise Departments which are a limb or wing of the Central Government of which the respondents are a part. 52. Mr. Ganesh referred to the pleadings in the writ petition and submitted that paragraph 4.20 of the Handbook of Procedure 2004-2009 gives the facility of clubbing of licenses only for the purpose of redemption / regularization without imposing any restriction based on the period to which the licenses relate. Paragraph 4.20 expressly provides that the licenses may relate to different periods but the only requirement is that the Customs Exemption Notification in question must be similar. That requirement was fulfilled in the present case. PRC had not suggested that the requirement had not been fulfilled. The petitioner is thus entitled to clubbing of licenses for the purpose of redemption and / or regularization, as argued by Mr. Ganesh. The finding of the PRC that clubbing of licenses would be allowed only if the licenses or Authorizations had been issued within a span of 36 months and the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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