9911796707
TMI Blog1989 (12) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... ." 3.The notification referred to in the prayer reads thus :- "Customs Notification No. 216/88, dated 7th July, 1988 - In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts jumbo rolls of graphic art films and jumbo rolls of photographic colour paper, of width 1 metre or more and of length 600 metres or more, falling within Chapter 37 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from so much of that portion of the duty of customs leviable thereon under the said First Schedule as is in excess of the amount calculated at the rate of 60 per cent ad valorem, subject to the following conditions, namely :- the importer undertakes conversion of the said jumbo rolls by slitting or confectioning into finished products; the importer holds an industrial licence under the Industries (Development and Regulation) Act, 1951 (65 of 1951), for slitting and confectioning of photo-sensitised materials from jumbo rolls. This notification shall be in force up to and inclusive of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- The petitioner is not a person eligible to apply for C.O.B. licence as it was not an existing industrial undertaking at the relevant time and the petitioner ought to have applied for an industrial licence as a new industrial undertaking. The letter dated 23-6-1987 relied on by the petitioner has been issued by a Desk Officer in the Ministry, who is in no way competent to grant licence or permission to carry on business. There was no authorisation by any competent officer to the Desk Officer to write the letter dated 3-6-1987 granting permission to the petitioner to carry on business. The letter, if at all, related only to one consignment and it cannot be used for subsequent imports which are wholly illegal. In any event, it is not a licence within the meaning of the notification and the petitioner is not entitled to concessional rates. The application of the petitioner for issue of licence has been disposed of by the Ministry by granting licence for photographic colour paper only and rejecting the same with reference to graphic art film etc. There is no application of the petitioner pending in the Ministry and the principle of promissory estoppel or any other estoppel will not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tographic raw film Photographic amateur film and (3)and paper and (1) Cinema film, (2) Photographic printing paper. Section 11(1) of the Act provides that no person or authority other than the Central Government, shall, after the commencement of the Act, establish any new industrial undertaking, except under and in accordance with a licence issued in that behalf by the Central Government. Under the proviso, a Government other than the Central Government may, with the previous permission of the Central Government, establish a new industrial undertaking. Sub-section (2) of Section 11 of the Act into the effect that a licence or permission under sub-section (1) may contain such conditions including in particular, conditions as to the location of the undertaking and the minimum standards in respect of size to be provided therein as the Central Government may deem fit to impose in accordance with the rules, if any, made under Section 30. Section 25 of the Act enables the Central Government to delegate the power exercisable by it under the Act other than the power given to it by Sections 16, 18A, 18AA and 18FA to such officer or authority including any Development Council, State Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mall-scale sector to obtain an Industrial Licence under the provisions of the Industries (Development and Regulation) Act, 1951 and to include the activity "Slitting/Confectioning of photo sensitized material from Jumbo Rolls" in the Ministry of Industry exemption notification dated 16th February, 1973. A separate notification is being issued in this regard. Consequently, all industrial undertakings, inc., including2. those in the small scale, intending to taking up the above-mentioned activity will require an Industrial Licence under the provisions of the Industries (Development and Regulation) Act, 1951. The existing industrial undertakings which are not having3. Industrial Licence but have taken the effective steps prior to the date of notification are required to obtain a C.O.B. Licence within a period of 6 months from the date of issue of the notification. All others will have to obtain an Industrial Licence for the purpose." The notification proposed to be made in the Press Note was actually made on 18-7-1986. But, before the notification was issued on 18-7-1986, the writ petitioner applied on 12-7-1986, for Small Scale Industries Registration to the Department of Indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es thereof are not applicable. That column requires the applicant to give certain particulars if sub-section (2) of Section 29B or the Act applies to the applicant. Under sub-section (2) of Section 29B of the Act, where any notification under sub-section (1), granting any exemption is cancelled, no owner of any industrial undertaking to which the provisions of Section 10, Section 11, Section 11A or clause (d) of sub-section (1) of Section 1 would have applied, if the notification under sub-section (1) had not been issued, shall carry on the business of the undertaking after the expiry of such period as may be specified in the notification cancelling the exemption except under and in accordance with a licence issued in that behalf by the Central Government and, in the case of a State Government, except under and in accordance with the previous permission of the Central Government. By stating in the application form that sub-section (2) of Section 29B of the Act was not applicable to the petitioner, the provision relating to C.O.B. licence could not be invoked by the petitioner and inasmuch as the application was for issue of C.O.B. licence, it was not a valid one. I do not propose t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Licence or permissions shall be in Form F appended to these rules." 13.According to the writ petitioner, after his application for issue of C.O.B. licence reached the Ministry, the latter called for certain information by letter dated 1st May, 1987. During the course of arguments, learned Counsel for the writ petitioner produced a xerox copy of the said letter. It is signed by K.C. Kapoor, Desk Officer. The body of the letter is as follows :- "Subject :- C.O.B. Licence - Slitting/confectioning of Photo Sensitized material from Jumbo Rolls. Sir, I am directed to refer to your application mentioned above and to say that you may please let us know the date of opening irrevocable letter of credit by you and also documentary evidence in this regard. This may be treated as immediate." I have to point out an unusual feature in this letter. In an official correspondence if it is necessary to make a reference to any prior document, it will be either mentioned under the Heading `reference' at the top of the letter or the details of the said prior document would be mentioned in the body of the letter. In this letter dated 1st May, 1987, the subject alone is mentioned at the top. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... photographs of the factory and photographs of slitting machine. Thereafter, the crucial letter dated 3rd June, 1987, was written by the Desk Officer, Mr. K.C. Kapoor, to the petitioner. The letter reads as follows :- "Subject :- Your C.O.B. application for slitting/confectioning of photo-sensitized goods. Sir, I am directed to refer to your letter dated the 9th May, 1987, on the subject mentioned above and to say that, your application for grant of a C.O.B. licence for manufacture of slitting/confectioning of photo-sensitized materials is under consideration in this Ministry. You can carry-on your business with Small Scale Registration2. till a regular C.O.B. licence is issued to you and this Ministry have no objection to Customs clearing your consignment of jumbo rolls as per prescribed rules." 14.It is the contention of the petitioner that the said letter dated 3rd June, 1987, tantamount to an industrial licence under the Act for slitting and confectioning of photo-sensitized materials from jumbo rolls as required by the Customs notification dated 7th July, 1988. I do not agree with this contention. The letter itself expressly refers to the pendency of the application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any provision of law to grant permission to the petitioner to carry on business as he has done. My attention is also drawn to the difference in the terminology between the first paragraph and the second paragraph of the letter. While the first paragraph refers to a direction supposed to have been given by somebody else to the signatory of the latter, the second paragraph does not make any such reference and it proceeds as if the permission to carry on business is being given by the signatory himself on his own. Detailed arguments were advanced to the effect that the rules of business should be strictly adhered to and the Desk Officer is not one of the officials entitled to grant such permission. I do not think it necessary to consider the said contention as I have taken the view that the latter does not tantamount to an industrial licence contemplated by the Customs notification dated 7-7-1988. 17.There is yet another reason as to why the letter dated 3-6-1987 cannot help the writ petitioner to get the benefits of the Customs notification. It is very clearly stated in the letter that the Ministry have no objection to customs clearing the petitioner's consignment of jumbo rolls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f refusal of the application for licence or permission. Sub-rule (3) thereof in to the effect that reasons for refusal shall be communicated to the applicant. The petitioner's Counsel contends that if the Ministry does not convey any information to the applicant for licence or permission, it must be deemed to have granted the application. I do not agree with this contention. Unless there is an express provision to that effects in any rule, no such presumption or legal fiction can be raised by a Court of law. The Court cannot add to the rules. 20.This contention of the petitioner that the licence or permission is deemed to have been granted is unsustainable on the facts of this case. Even the petitioner never thought so. The petitioner has written several letters to the Ministry after the issue of the Customs notification dated 7-7-1988 requesting the Ministry to grant C.O.B. licence immediately or alternatively issue a provisional C.O.B. licence. One such letter is dated July 18, 1988, in which a specific reference is made to the Customs Notification dated 7-7-1988. The relevant portions of the letter read as follows :- "We have applied for the above C.O.B. licence in January ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted with reference to the other two items and in particular with reference to graphic art film, with which this writ petition is concerned. 23.It is next contended that the Ministry of Industry, which has been impleaded as the fifth respondent, is estopped from contending that the petitioner has no industrial licence under the Act. In support of this argument it is submitted that letters similar to the one issued on 3-6-1987 to the petitioner have been issued to other manufacturers enabling them to clear imported goods from customs. It is also submitted that the licensing authority has kept quiet knowing fully well that the petitioner is carrying on business by importing jumbo rolls and manufacturing the products mentioned in the application and allowed the petitioner to clear the goods from the Customs. According to learned Counsel, the entire correspondence between the writ petitioner and the Ministry should be considered in this context and if the matter is viewed in the background of the said correspondence, it will be clear that a promise has been made by the Ministry that the licence would be granted to the writ petitioner as applied for and based on that promise, the writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the application for grant of C.O.B. licence is still pending with the Ministry of Industry. The fact that the application has been granted on 7-12-1988 with reference to only one of the items mentioned in the application proves clearly that the application is rejected with regard to the other items. The stand taken by the fifth respondent that there is no application of the petitioner pending with the Ministry for issue of C.O.B. licence is correct. 25.It is then contended that Rule 15 of the Registration and Licensing of Industrial Undertaking Rules should be construed in favour of the subject and inasmuch as the Ministry and failed to take action from 3-6-1987 to 7-12-1988 and the petitioner was allowed to carry on business, there should be a presumption that the licence has been granted. Learned Counsel also contends that the subsequent letters written by the petitioner to the Ministry for grant of licence was only for issue of a regular licence as indicated in the letter dated 3-6-1987. I do not find any substance in any of the contentions. I have already expressed the view that there can be no presumption in favour of the grant of licence in the absence of any rule. 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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