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TMI Blog2019 (5) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... .2011); 01.10.2012 and 30.04.2013 passed by the Policy Relaxation Committee (PRC) of DGFT, wherein the petitioner's request for extension of the period of discharging export obligation under advance authorization No. 510136637 dated 27.08.2004 and for clubbing of the said license with advance license No. 0510096846 dated 22.07.2003 and advance license No. 0510266545 dated 21.06.2010 were denied. 2. Admittedly, the petitioner had filed to discharge his export obligation in respect of advance authorization (No. 050136637) dated 22.08.2004. In this regard, a show cause notice dated 04.07.2011 was issued to the petitioner. The petitioner did not respond to the said show cause notice, however, the petitioner made an application seeking extension of the period for discharging the export obligation and also sought clubbing of the advance license with two other licenses ‒ one dated 22.07.2003 and the other dated 21.06.2010. The petitioner claimed that it had exported 845 MT of excess quantity under the license dated 22.07.2003 and had exported 4262 MT of polyester film against the advance license dated 21.06.2010 without making any imports. The petitioner requested that if the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed placing the Authorisation holder (the petitioner) under an export obligation for stipulated value and quantity to be fulfilled within a period of 36 months, i.e. by 26.08.2007. In terms of paragraph 4.24 and paragraph 4.25 of the Handbook of Procedures 2004-2009, the petitioner was required to submit documents as evidence for fulfilment of stipulated export obligation within two months from the date of expiry of said obligation period. 5.3 The aforesaid period for export obligation expired on 26.08.2007. A reminder in this context was issued to the petitioner on 10.09.2009 calling upon him to submit documents for redemption of the authorisation as per paragraph 4.24 of the Handbook of Procedures (HoP). 5.4 DGFT submitted that the petitioner failed to submit the required documents and instead submitted invoice wise detail of exports on 25.09.2009. Consequently, a show cause notice dated 04.07.2011 was issued to the petitioner for failing to fulfill its export obligation, however, the petitioner did not reply to the aforesaid show cause notice. The petitioner was also granted a personal hearing, and the same was attended by the representative of the petitioner on 18.07.2011, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was prior to the amendment, and during that period, there was no restriction of time gap between the authorisations as stated in the amendment. 5.11 The aforesaid application was once again rejected by the PRC in its meeting dated 30.04.2013, reiterating its earlier decision taken in its meeting dated 01.11.2011. The relevant extract of the said meeting is set out below: "The Committee reiterated its earlier decision on PRC meeting dt.01.11.2011 and once again. If the applicant could not get this case regularized as per the prevalent provisions before the issuance of Public Notice 79 dated 13.10.2011, then relief cannot be granted now for the Authorization issued in 2003 and 2004 period as per the procedure prior to Public Notice 79 dt. 13.10.2011." 5.12 Thereafter, DGFT passed the impugned order dated 14.10.2014 declaring the petitioner as a defaulter and placing the petitioner in the Denied Entity List on the ground that the petitioner did not place on record any documents to prove that Export Obligation has been fulfilled against Advanced Authorization No. 0510136637 dated 27.08.2004. Reasons and Conclusion 6. As observed above, the principal controversy involved in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on the date of the petitioner's application dated 29.08.2011. At this stage, it would be relevant to refer to the provisions relating to facility of clubbing as set out in Handbook Procedure (HoP) as applicable on 29.08.2011. Paragraph 4.20, 4.20.3 and 4.20.4 of the said HoP are relevant and are set out below:- "4.20 Facility of clubbing shall be available only for redemption/ regularisation of cases and no further import or export shall be allowed. For this facility, authorisations are required to have been issued under similar Customs notification even pertaining to different financial years. However in case of Authorisations issued in 2004-09 period or thereafter, Advance Authorizations with different customs notification can be clubbed. xxxx xxxx xxxx 4.20.3 Facility is available only for Advance Authorisation(s) where there is shortfall in fulfilment of EO, and which is sought to be clubbed with an advance Authorisation(s) which is valid for imports. For expired Authorisation(s) with EO shortfall and which is sought to be clubbed with an advance Authorisation(s) which is valid for imports, applicant shall pay composition fee for EO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aragraph 4.20.4 of the HoPv1, which expressly refers to the extension period of the earlier authorization. Thus, if exports made under the licenses issued at a later point of time are sought to be clubbed with authorization issued earlier, the clubbing facility can be provided only if the export obligation period of the authorization issued at a prior point of time allowed under paragraph 4.22 of the HoPv1 has not expired. In the present case, the petitioner had made no application for extension of the export obligation period under the license dated 22.08.2004 at the material time. As noticed above, the export obligation period had expired. Further, the maximum period for which extension could have been granted under paragraph 4.22 of the HoPv1 had also expired. The petitioner made an application for extension on 23.08.2011, which is much after the said period had expired. 11. In view of the above, the facility of clubbing of the licenses in question under paragraph 4.20 of the HoPv1 is unavailable to the petitioner. It is in the aforesaid context that PRC had considered the petitioner's request at a meeting held on 01.11.2011 and had decided to reject the same as "the gap betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once again reiterated in its representation dated 12.04.2013 that sub-paragraph 4.20.3 of the HoPv1, as introduced by the public notice dated 13.10.2011, was inapplicable to the application made by the petitioner and, therefore, its request for clubbing of the licenses be considered. 17. The PRC considered the aforesaid representation dated 12.04.2013 in its meeting held on 30.04.2013 and reiterated its earlier decision. The relevant minutes of the said meeting are set out below:- "The Committee reiterated its earlier decision of PRC meeting dt. 01.11.2011 and once again. If the applicant could not get this case regularized as per the prevalent provisions before the issuance of Public Notice 79 dated 13.10.2011, then relief cannot be granted now for the Authorisation issued in 2003 and 2004 period as per the procedure prior to Public Notice 79 dt. 13.10.2011." 18. Mr Sethi had contended that the aforesaid minutes indicated that the PRC had considered the petitioner's case under the procedure as amended by the Public Notice No. 79 dated 13.10.2011. He submitted that the same was erroneous, as the petitioner's application ought to be considered as per the provisions of HoPv1 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 29.08.2011. 21. The aforesaid contention is unpersuasive. The petitioner was required to discharge its export obligations under the advance license dated 27.08.2004 within a period of 18 months (as is apparent from the copy of the license annexed alongwith the petitioner). However, according to the counter affidavit filed on behalf of the DGFT, the said obligation is required to be completed within a period of 36 months. Admittedly, the petitioner was required to submit documents to evidence fulfillment of the export obligation within a period of two months from the date of the expiry of the said period. However, the petitioner failed and neglected to do so. In view of the above, the DGFT issued a reminder dated 10.09.2009 advising the petitioner to submit the relevant documents. However, the petitioner did not do so. Thereafter, on 04.07.2011, DGFT issued a show cause notice under Section 14 of the Foreign Trade (Development and Regulation) Act, 1992 for non-fulfillment of export obligation. The petitioner had not submitted any document in response to the said notice as well. Thereafter, the petitioner was afforded a personal hearing and the Senior Manager of the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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