2007 (1) TMI 13 - SC - Customs

Supreme Court lifts ban on DTA sales by EOUs, issues new licensing policy

The Supreme Court addressed the challenge to the ban on DTA sales by 100% EOU under OGL license and the restriction on issuing licenses to those who ... EXIM – 100%EOU – Ban on DTA sales by 100% EOU under OGL licence – After considering all the fact, the high court order the ban on EOU Units undertaking DTA sales shall remain stayed Issues:Challenge to ban on DTA sales by 100% EOU under OGL license and limiting license issuance to those who imported crude marble between 1999-2001 under SIL scheme.Analysis:The Supreme Court addressed the challenge to the ban on DTA sales by 100% EOU under OGL license and the restriction on issuing licenses to those who imported crude marble between 1999-2001 under SIL scheme. The writ petitions from various High Courts were transferred to the Supreme Court for consideration. The Court noted that the entitlement of Domestic Users for the financial year 2005-06 was set to lapse on 31-3-2007, leading to the passing of an interim order. The DGFT was authorized to grant licenses to eligible applicants under policy Circular No. 24 dated 30-8-2005, thereby vacating the previous order.In a related petition by the Director General of Foreign Trade, it was mentioned that the impugned new policy was formulated based on representations from traders and material gathered by DGFT after discussions with the trade. However, affected 100% EOUs claimed they were not provided with the necessary material before the changes were made in the Foreign Trade Policy (FTP). The Solicitor General assured to disclose the material to the concerned EOUs, directing DGFT to provide the material to affected EOUs who had filed writ petitions by 15-1-2007. The EOUs were given an opportunity to make representations within 10 days from receiving the material, following which DGFT would decide the matter in accordance with the law, with the option to equitably resolve the issue.The Court also considered the question of whether the impugned circulars/notifications signified a policy change or a detail within the existing policy, which would be examined during the next hearing to determine the case's merits. Pending the report from DGFT, the ban on EOU Units conducting DTA sales would remain in effect, thereby staying the interim order of the Rajasthan High Court. The case was adjourned to 31-1-2007 for further proceedings.