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TMI Blog1992 (10) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... and the 6th respondent is the Bombay Port Trust. The petitioners claim to be the registered manufacturers, who are exporters, engaged inter alia in the manufacture of ACSR conductors which are used in the distribution of electricity by the State Electricity Boards. For this purpose, the petitioners import Aluminium Wire Rods and High Carbon Steel Wire Rods which are used as raw material in the petitioners' factory for the manufacture of the said ACSR conductors. The petitioners supply the said ACSR conductors to various projects in India including those aided by the International Bank for Reconstruction and Development (for short, 'IBRD') and the International Development Association (for short, IDA) which sponsor some State Aided Projects. There is no controversy before us that in the event of the petitioners supplying in ACSR conductors to the State Aided Projects sponsored by IBRD and IDA, such supplies are treated as "demand exports" within the meaning of the relevant para of the import policy for the relevant period to which we will make a reference later. 3. There is no dispute before us about the following facts that - (i) the petitioners obtained the Special Im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 235 of 1987-Customs issued on 5th June 1987 which was published in the gazette dated 15th June 1987. This Notification No. 235 is at Exh. 1 to the Affidavit-in-Reply filed by the Asstt. Collector of Customs and it further amends Notification No. 210 of 1982 which is at Exh. B to the Petition. The relevant part of the amendment reads as under: "(I) ....In the opening portion after the words "project" the following shall be inserted, namely "or for replenishment of raw material and components used in the manufacture of such goods already so supplied." 5. The petitioners have further placed reliance on the clarification issued by the licensing authority on 11-02-1987 which is at Exh. E to the Petition which says that some of the registered exporters were issued Special Imprest Licence under duty exemption scheme under Appendix 19 of AM 1985-88 Policy Book. In some cases, export obligation had been fulfilled before the imports taking place against particular licence and, therefore, they should be allowed to import goods without executing L.U.T. Bank Guarantee. Since the registered exporters had represented to the licensing authority, viz. the office of the Deputy Chief Control ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout payment of customs duty. The petitioners have contended in their rejoinder that if the very object of the replenishment scheme was to permit the import of raw material which was used in the manufacture of certain products which were already exported, it would be unreasonable to deny to the manufacturers and exporters like the petitioners the benefit of the Notification at Exh. B. According to the petitioners, they could not be placed in a disadvantageous position as compared to those who wanted to get the benefit of the replenishment scheme by first importing and thereafter export. 8. We have heard Shri Bulchandani for the petitioners, Shri Sanklecha for respondent Nos. 1 to 5 and Shri Makhija for respondent No. 6. The contentions of Shri Bulchandani, briefly stated, are that the Import Export Policy AM 1982-83 dealing with the registered exporters in Chapter XVII in Para 128 emphasises the object to provide to the registered exporters by way of import replenishment the materials (all or some) required for manufacture of the products exported. Para 131 dealing with the eligibility deals with the "deemed exports" and the material clauses (b) and (f) read as under : "(b) Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a licence under this Scheme has been fulfilled in part before import of the exempt material involved, the bond/legal agreement will be correspondingly reduced in value so that it represents only the unfulfilled part of the export obligation/Customs duty exemption. If the export obligation prescribed has been not in full before any import takes place, execution of a bond/legal agreement will not be necessary. For these purposes, however, the Advance licence holder will have to produce to the licensing authority concerned prescribed export documents to prove such partial or full fulfillment of export obligation alongwith the DEECs showing Customs audited entries." Shri Bulchandani, therefore, invited our attention to the endorsement made in DEECs, Book which read as under : "Export obligation fulfilled. No Bank Guarantee/legal agreement in terms of para 24(4) of Appendix 19 of Import Export Policy of 1985-88 is required". Sd/- 18-8-88" He further invited our attention to the fact that the project officer of the U.P. State Electricity Board had certified the supply of the products to the U.P. State Electricity Board which amounted to "deemed exports" according to the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted material. Since, however, some doubts were raised by the customs department, it was felt necessary to issue a clarification which was done by issuing Notification No. 235 of 1987. He, therefore, contended that the amending Notification No. 235 of 1987 was really in the nature of a clarification. He then invited our attention to certain decisions on the proposition that in case there were any doubts in respect of the grant of benefit of the exemption under the said notification Exh. B, No. 210 of 1982 as amended by Notification No. 235 of 1987, the benefit must go to the assessee. He contended that though it was a settled legal position that the taxing statute has to be construed strictly, in case of doubt, the benefit has to be given to the assessee. In this behalf he has invited our attention to the following three decisions. (i) Hansraj Gordhandas v. H.H. Dave, Asstt. Collector of Central Excise and Customs, Surat and Others reported in A.I.R. 1970 Supreme Court 755. The relevant observations are in para 5 at page 759. "There is no further requirement under the two notifications that the cotton fabrics must be produced by the Co-operative Society on the powerlooms "for i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to account its history referred to earlier. We have pointed out that in 1967 the relevant entry was "stainless steel of any specifications" whereas in 1968 it was "stainless steel sheets/plates/strips/circles of any specifications." The erratum only brought the situation to the 1968 position. It is also for this reason that we cannot accept the contention that the erratum only made clear or explicit what was implicit in the entry earlier. This is apart from the settled legal position that taxation statutes have to be construed strictly, and the benefit of doubt, if any, has to be given to the assessee." 11. In short, therefore, the main submission of Shri Bulchandani is that in accordance with the import-export policy AM 1985-88 read along with the provisions of Appendix 19 Chapter XVI dealing with the Duty Exemption Scheme in respect of the replenishment of imports of exempt material utilised in the manufacture of products which are deemed to have been exported, the petitioners are entitled to duty free import in accordance with the Notification No. 210 of 1982 Ex. B dated 10th September 1982 as amended by Notification No. 235 of 1987. He, therefore, contends that the customs au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ires. Nor is the validity of the Import Control Policy Statement (for the period April-March 1969) known as Red Book impeached. Indeed, this policy statement is the sheet-anchor of the petitioners' claim. Such a policy statement, as distinguished from an Import or Export Control Order issued under Sec. 3 of the said Act, is not a statutory document. No person can merely on the basis of such a statement claim a right to the grant of an import licence, enforceable at law. Moreover, such a policy can be changed, rescinded or altered by mere administrative orders or executive instructions issued at any time." 14. Shri Sanklecha then contended that if there was a conflict between a statutory instrument like the Notification Ex. B, and the Public Notice Exh. A, the Notification Ex. B issued under Section 25 of the Customs Act must prevail. In support of this submission, he sought to rely upon the decision of the Supreme Court in the case of State of Madhya Pradesh and Others v. G.S. Dall and Flour Mills, reported in A.I.R. 1991, Supreme Court 772. There can be no doubt about this proposition. But, in our view, this is not a case of any conflict between a statutory instrument or the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept the main contention of Shri Sanklecha and we are inclined to agree with the main contention raised by Shri Bulchandani. There is no controversy that the petitioners have supplied the products to the State Aided Project and have, therefore, effected deemed exports in accordance with para 131 of Policy AM 82-83 corresponding to para 190 of the Policy AM 85-88 applicable to registered exporters. On a perusal of Appendix 19, Chapter XVI of policy AM 85-88 in respect of Duty Exemption Scheme, we are of the view that Special Imprest Licences are issued to registered exporters for deemed exports covered by paras 190(b) and (f) of the Import Policy AM 85-88 for the import of raw materials and components required for the manufacture of goods supplied to projects in India against contracts entered into with IBRD/IDA aided projects. In the present case, the petitioners have supplied their product to the State Aided Project viz. the U.P. State Electricity Board and have, therefore, effected deemed exports between November 1985 and March 1986 after they obtained the Special Imprest Licence under the Duty Exemption Scheme on September 20, 1985. Sub-para (4) of para 24 of Appendix 19 provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her. It is, therefore, not necessary for us to express any opinion on the contention advanced by Shri Bulchandani on the basis of the judgment of this Court in Lokesh Chemical Works' case reported in 1981 (8) E.L.T. page 235 (supra). We are of the view that in the facts and circumstances of this case, the petitioners would be entitled to import the exempt material under the Special Imprest Licence issued to them under the Duty Exemption Scheme. If there were any doubts as regards the interpretation of the provisions of the said Notification. Exh. "B", dated 10th September 1982, as amended by Notification No. 235 of 1987, the benefit must go to the assessee as observed by the Supreme Court in the case of Union of India v. Kanunga Industries, reported in A.I.R. 1990 Supreme Court, 2190. We have extracted earlier above Para 3 of the said Judgment appearing at Page 2192 of the Report. 17. Shri Sanklecha's contention in respect of Exh. B being a statutory instrument and Exh. A being not such a statutory instrument may be correct, but we do not find any conflict between the statutory instrument, Exh. B and the public notice, Exh. A. The ratio of the Supreme Court decision in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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