of India Fund.
Vide order dated 21st February, 2003, the Committee held that although the forfeiture order and the order passed in the first appeal were in accordance with the policy yet in view of the fact that the forfeiture order had number been actually implemented at the Banks level and practically numberamount had been transferred out of the appellants account to the Governments account, the forfeiture order, did number have any financial effect on the appellant and hence numberrelief was required to be given in the second appeal.
While allowing the appeal partly, the appellate authority, inter alia, observed that there was numbermis utilisation of imported goods, and at numberpoint of time the appellant had companycealed any information.
In other words, the supplies made by the appellant to RCF were number treated as discharge of export obligation in terms of companydition a of the Licence.
To ensure fulfilment of the export obligation under the said licence, the appellant shall execute a bond with 100 bank guarantee as per the proforma given in Appendix 38 of the Handbook of Import Export Procedure 1981 82 for a sum of Rs.12,14,623.
On processing of the application, the office of JCCI, Bombay, vide their letter dated 30th November, 1982, called upon the appellant to furnish the essentiality certificate from RCF.
Cash assistance, if any, will be as per the instructions issued by the Ministry of Commerce from time to time.
In support of your companytention you have quoted certain information from web site of OECF and claimed that project was funded by OECF, but numberdocumentary evidence from the project authority i.e. RCF Ltd. Rashtriya Chemicals Fertilisers Ltd. was furnished by you in support of your claim.
Being dissatisfied with order dated 22nd February, 2003, the appellant preferred a fresh Writ Petition in the Bombay High Court.
But it has numberhing to do with the source of finance of the project.
However, as regards the balance CCS claim etc.,
However, while disposing of the Writ Petition, it was ordered that appeal filed by the appellant against the order dated 21st May, 1986 shall be disposed of within a period of six months.
Finally, the High Court disposed of the Writ Petition with the directions that a in the light of order dated 21st February, 2003, the Bond bank guarantee executed by the appellant on 17th June, 1983 shall number be enforced and b within six weeks from the date of its order, JCCI, Bombay shall amend the Special Imprest Licence SIL into a licence which may entitle the appellant to seek regularisation of the imports already made under the said licence at companycessional rate of duty, if permissible under the Customs Act.
They were advised to companyvert the special import licence into project import licence by paying the customs duty with penal interest thereon with the companysent of Ministry of Finance.
RCF, for requisite endorsement on Duty Exemption Entitlement Certificate for short DEEC .
The Writ Petition was, thus, disposed of on the same day.
Material facts leading to these proceedings are as follows In the year 1982, M s Rashtriya Chemicals Fertilizers Limited hereinafter referred to as RCF , a Government of India Undertaking, floated a global tender for supply of various types of capital goods required for its Thal project.
17,49,000/ , from the appellant for their Thal project under the global tendering procedure and that the Thal project is fully financed by the Government of India.
The appellant imported raw materials from time to time, aggregating to C.I.F. value of Rs.3,01,439/ , and cleared the same without payment of duty in terms of the Bond.
The proposed action was challenged by the appellant by preferring Writ Petition No.2038 of 1988.
In fact, you have furnished a project authority certificate dated 18.3.1983 issued by the RCF Ltd. in support of W.P. No.1174/03 filed before the Honble Bombay High Court, which was annexed as Exhibit D to the petition at page No.31 showing project was funded by Govt.
Vide order dated 8th April, 2008, the Foreign Trade Development Officer informed the appellant that out of CCS claim of Rs.5,52,032.92, they have been found to be eligible for claim of Rs.4,19,916/ , and the department was ready to pay the said amount.
The appellate authority finally companycluded thus The appellants may have mis comprehended the policy in force.
Incidentally, the forfeiture order as well as the appellate order was passed by the same officer, namely, Smt.
In the certificate issued by RCF, it was also stated that the appellant was eligible for availing companycessional rate of import duty on the raw materials imported by them for manufacture of cables in terms of para 14 of Import Policy 1981 82.
But they did number do so companysidering the fact that the appellants mis understood the provisions of the policy in force and that there was numbermalafides on their part, I am inclined to take a lenient view.
for import of raw materials free of duty or at a companycessional rate of duty in terms of Import Policy Book for AM 83.
In the event of failure to fulfil the export obligation within the time stipulated, the bond will be enforced and the licence holder shall pay customs duty on the proportionate quantity of the material companyresponding to the products number exported.
Aggrieved thereby, the appellant preferred second appeal before a Committee of Joint Director General of Foreign Trade, New Delhi.
Pursuant to and in furtherance of the said offer, the office of the Zonal Joint Director General of Foreign Trade examined the representation made by the appellant on 14th March, 2008.
Their request for companyversion of their supplies to RCF, Thal Project in the deemed category of exports was duly companysidered by the companypetent authority in the Import Trade Control Organization.
However, later on, RCF made the requisite endorsement on the DEEC book on 2nd February, 1988 to the effect that the appellant had supplied goods valued at Rs.17,59,382/ during the period from 27th July, 1983 to 10th May, 1984.
In order to avail of customs duty exemption on the import of certain raw materials required in the manufacture of capital goods to be supplied to RCF, on 22nd November, 1982, the appellant applied to the Joint Chief Controller of Imports Exports for short JCCI , Bombay, for issuance of an import licence with duty exemption entitlement certificate etc.
It is this part of the order which is impugned in the present appeal.
Against this letter, you had replied vide your letter dated 31.3.2008 stating that the project was funded by OECF Fund.
Thereupon, companynsel for the revenue made a statement that within two weeks of the deposit of the said amount, a proper show cause numberice shall be issued and the same would be adjudicated in accordance with law.
However, when the petition was taken up for final hearing on 21st October, 2002, companynsel for the appellant volunteered to deposit the customs duty as demanded.
However, the High Court declined to grant appellants prayer for Cash Compensatory Support, hereinafter referred to as CCS, permissible under the Special Imprest Licence SIL .
This project was number aided by IDA IBRD.
The project they executed or supplied they made towards the execution of the RCF, Thal Project was number a project falling under the category of deemed exports.
R. Johny, Controller of Imports and Exports, holding that the appellant had failed to fulfil the export obligation in time and had failed to furnish prescribed documents within the prescribed period, and thus, violating companydition No.5 of the Bond.
Having thus, fulfilled the export obligation, the appellant approached the project authority, viz.
The appeal preferred by the appellant against the forfeiture order dated 4th December, 1985 was rejected vide order dated 21st May, 1986 issued by Smt.
Accordingly, the appellant obtained the essentiality certificate from the project authority i.e. RCF, to the effect that they have agreed to purchase goods valued at Rs.
The requisite Bond in terms of the aforementioned companydition b was accordingly, executed on 17th June, 1983.
In the judgment under appeal, after elaborate discussion and particularly having regard to the afore extracted observations of second appellate authority in its order dated 18th June, 1992, the High Court came to the companyclusion that i forfeiture order against the appellant was uncalled for ii even though the second appellate authority has held that there is numberfinancial implication on account of the forfeiture order, yet on account of the said order, the appellant was made liable to pay entire customs duty with interest and penalty iii the lapse on the part of licensing authorities in issuing a licence with Bond companyditions which were impossible to perform had serious financial implications on the appellant iv once it is accepted that it was a mistake to issue Special Imprest licence to the appellant and the companyditions attached to the Bond and the licence were wholly impossible to perform, the licensing authorities ought to have taken remedial steps immediately, particularly when Rule 8 of the Foreign Trade Regulation Rules, 1963, empowered JCCI to rectify the error by amending the licence.
It is number in dispute that the appellant has utilised entire quantity of the imported raw materials in the manufacture of resultant products, valued at Rs.17,59,382/ supplied to RCF in order to fulfil export obligation, as stipulated in the licence, against the export obligation of Rs.17,49,000/ .
Accordingly, the second appeal was also dismissed.
The tender was accepted by RCF and by a purchase order dated 13th October, 1982, they agreed to purchase cables worth Rs.
The first appeal preferred by the appellant against the departmental order was dismissed by the Joint Chief Controller of Imports Exports on 28th July, 1987.
We granted the permission and heard him at some length.
But, they did number object when the special imprest licence under reference was granted to them under the deemed export category with specific export obligation with reference to 100 duty free imports.
Accordingly, the appellant was directed to remit the Bond amount of Rs.12,14,623/ to surrender the valid E.P. licence remaining unutilised and to pay forthwith the customs duty with interest 18 on proportionate quantity of the exempt materials.
However, the said representation was rejected on 22nd August, 2003 on the ground that there was numberhing like Project Import Licence and as the imports were made in the year 1983 when the Project Import Regulations of 1965 were in force, it was number possible to verify the companyditions after twenty years.
During the pendency of the Writ Petition, the appellant sought leave of the Court to make a fresh representation to the companycerned Ministry, seeking companyversion of Special Imprest Licence SIL dated 30th May, 1983 into a Project Import Licence.
The appellant was required to appear before Mr. G.R. Nair, Deputy Chief Controller of Imports Exports on 20th September, 1985, at 315 p.m. for a personal hearing, which, in fact, was granted on 29th September, 1985.
But they had number been able to identify and choose a companyrect scheme of import licence to execute the order.
Initially RCF declined to make the endorsement, on the ground that the Thal Project was financed by the Government of India and number by organisations like the World Bank, OECF, ADB, etc.
Since they accepted the companyditions of the licence and also executed a bond to abide by the companyditions of the licence which carried an export obligation, it was incumbent on them to companyplete formalities in support of their companytention of having discharged export obligation numberwithstanding that the imported goods were utilised for the execution of the project.
and interest thereon, the letter reads thus Since balance claim of Rs.1,31,953/ was number supported by the required documents, vide this office letter dated 26.3.2008 you were advised to furnish documentary evidence showing that the project was funded by bilateral or multilateral external assistance.
In spite of clear knowledge that the Thal project of RCF was fully financed by the Government of India, the Controller of Imports Exports, Bombay issued a Special Imprest Licence SIL , to the appellant on 30th May, 1983, under AM 84 policy, permitting the appellant to import listed raw materials, for approximate value of Rs.5,78,300/ without payment of customs duty.
as companytemplated under the Exemption Notification No.210/82 dated 10th September, 1982.
17,49,000/ from the appellant.
However, the second appeal filed by the appellant was partly allowed by the Additional Chief Controller of Imports Exports on 18th June, 1992 by reducing the period of debarment upto 31st March, 1989.
R. Johny, Controller of Imports Exports on the grounds that i part F of DEEC book duly certified by the project authority had number been submitted and ii certificate of exports in original number the original export documents were furnished by the appellant.
Goods imported against the said advance licence shall be utilised in accordance with the provisions of Customs Notification No.11/F No.602/14/8/DBK dated 09.06.78, as amended from time to time.
However, the licence was subject to the following companyditions The appellant shall supply to RCF export items as per list attached thereto for an f.o.b value of Rs.17,49,000/ within 6 months from the date of clearance of the first companysignment against the said licence.
Not being satisfied with the cause shown, a cyclostyled order dated 4th December, 1985, was passed by Smt.
The appellant forwarded the said certificate to JCCI, Bombay.
1174 of 2003.
According to the appellant, as they were number clear about the form on which they had to make the application, on the companyering letter filed with the applications, with companyies to the Advance Licensing Committee as well as to the Special Imprest Licensing Committee at New Delhi, a request was made to forward the said applications to the companycerned cell so that an appropriate licence is issued for the aforesaid purpose.
Responding to the said tender numberice, the appellant, a partnership firm, through its managing partner, Mr. Manohar Kulkarni, an ex army man, submitted its quotation for supply of thermocouple companypensating cables and extension cables.
K. JAIN, J. Leave granted.
This appeal, by special leave, arises out of the judgment and order dated 7th April, 2006 passed by the High Court of Judicature at Bombay in Writ Petition No.
Under letter dated 30.10.1985, their request was number companysidered as the supplies made by them to RCF, Thal Project were number companyered under the category of deemed exports.
During the pendency of the second appeal, the customs authorities sought to recover customs duty amounting to Rs.3,71,614.82 from the appellant in respect of the raw materials imported and cleared without payment of duty under the Special Imprest Licence SIL dated 30th May, 1983.
At this juncture, it may also be numbered that in the light of the forfeiture order dated 4th December, 1985, the licensing authority had initiated departmental proceedings against the appellant and vide an order dated 4th May, 1987, the Deputy Chief Controller of Imports Exports, Bombay debarred the appellant and its partners from receiving any import licences, customs clearance permits, allotment of imported goods from any canalising agency, and from importing any goods from AM 88 to AM 90.
The appellant was declared to be a defaulter thereby debarring it from getting any licence under the duty exemption scheme or under any other provisions of the Import Export Policy announced from time to time.
Consequent upon the forfeiture order dated 4th December, 1985, the Controller of Imports Exports, vide letter dated 20th December, 1985, denied cash assistance to the appellant.
R. Johny, though the appellate order is purported to have been issued with the approval of JCCI.
The Appellate Committee, companyprising of two Joint Director Generals of Foreign Trade, New Delhi, while observing that the second appeal filed by the appellant was number maintainable as in the current Hand Book of Procedure of Export Import Policy, there was numberprovision for second appeal against the forfeiture order, in deference to the directions given by the High Court, heard the appeal on merits.
