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of <h1>Supreme Court directs release of Cash Compensatory Support claim with interest. Appellate forums to decide on remaining issues.</h1> The Supreme Court partly allowed the appeal, directing the respondents to release the Cash Compensatory Support (CCS) claim of Rs.4,19,916/- within four ... HC directed for conversion of Special Imprest Licence into Project Import Licence - It is trite that no man should suffer a wrong by technical procedure of irregularities - The Rules or procedures are the handmaids of justice and not the mistress of the justice - held that order of forfeiture against the appellant was uncalled for so there was no justifiable reason for the DGFT for not releasing CCS amount - release of the CCS claim which has been ordered alongwith interest @ 9% Issues Involved:1. Issuance of Special Imprest Licence (SIL) and its conditions.2. Fulfillment of export obligations.3. Forfeiture order and its implications.4. Claim for Cash Compensatory Support (CCS).5. Conversion of Special Imprest Licence into Project Import Licence.6. Payment of customs duty and interest.Detailed Analysis:1. Issuance of Special Imprest Licence (SIL) and its conditions:The appellant, a partnership firm, was issued a Special Imprest Licence (SIL) on 30th May, 1983, under AM 84 policy, permitting import of raw materials worth Rs.5,78,300/- without payment of customs duty, subject to certain conditions. These included supplying export items worth Rs.17,49,000/- to RCF within six months, executing a bond with 100% bank guarantee, utilizing imported goods as per customs notification, and paying customs duty on unfulfilled export obligations.2. Fulfillment of export obligations:The appellant fulfilled the export obligation by supplying goods valued at Rs.17,59,382/- to RCF. However, RCF initially declined to endorse the Duty Exemption Entitlement Certificate (DEEC) due to the project being financed by the Government of India and not by organizations like the World Bank. Eventually, RCF made the requisite endorsement on 2nd February, 1988.3. Forfeiture order and its implications:A show-cause notice was issued on 5/6th September, 1985, and a forfeiture order was passed on 4th December, 1985, by the Controller of Imports and Exports, citing failure to fulfill export obligations in time and furnish prescribed documents. This led to the appellant being declared a defaulter, denied cash assistance, and debarred from receiving any import licences. Appeals against the forfeiture order were rejected, with the second appeal partly allowing by reducing the debarment period up to 31st March, 1989.4. Claim for Cash Compensatory Support (CCS):The High Court declined the appellant's prayer for CCS, permissible under the Special Imprest Licence (SIL). However, during the appeal, the Foreign Trade Development Officer found the appellant eligible for a CCS claim of Rs.4,19,916/-, while disallowing Rs.1,31,953/- for lack of documentary evidence showing the project was funded by bilateral or multilateral external assistance.5. Conversion of Special Imprest Licence into Project Import Licence:The appellant sought conversion of the Special Imprest Licence into a Project Import Licence. The High Court directed JCCI, Bombay, to amend the SIL into a licence that may entitle the appellant to seek regularisation of imports at a concessional rate of duty. The representation for conversion was initially rejected but later granted by the High Court.6. Payment of customs duty and interest:During the pendency of the second appeal, customs authorities sought to recover customs duty amounting to Rs.3,71,614.82 from the appellant. The appellant volunteered to deposit the customs duty, leading to the disposal of the writ petition with directions for adjudication in accordance with law. The High Court ordered that the bond/bank guarantee executed by the appellant shall not be enforced.Conclusion:The Supreme Court partly allowed the appeal, directing the respondents to release the CCS claim of Rs.4,19,916/- within four weeks along with interest at 9% per annum from 7th April, 2006, till the date of actual payment. The Court did not express any opinion on the merits of the appellant's claim for CCS of Rs.14,478/- against export order KT-995 or the rate of customs duty payable, leaving these issues to be decided by the concerned appellate forums. The appellant was entitled to the costs of the appeal.
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