2017 (7) TMI 590 - HC - Customs

Court dismisses writ petition on clubbing of Advance Authorizations under Foreign Trade Policy.

The court dismissed the writ petition and pending application, with no orders as to costs. The Petitioner's request for clubbing of three Advance ... Advance Authorisation Scheme - clubbing of three schemes - As a consequence of the Petitioner's noncompliance of the conditions imposed by the PRC, the Petitioner was placed in a DEL list on the websites of the authorities - Whether the Petitioner is entitled to invoke Public Notice No. 79 dated 13th October, 2011 on 29th August, 2012 and seek clubbing of the three AAs? - Held that: - The Petitioner’s contention that it has a legitimate expectation for its request to be considered under Public Notice No. 79 is belied by the fact that its request for clubbing itself was after the supersession of the said Public Notice. The HBP had stood amended and hence, there cannot be a legitimate expectation for continuation of a relaxation policy, which is non-existent on the date it is invoked - The Petitioner having filed its application for clubbing on 29th August, 2012 cannot, therefore, legitimately expect that its application would be considered under Public Notice No. 79 which already stood amended and superseded. The authorities, therefore, rightly rejected the application for clubbing of the three AAs which were not as per the Notification dated 5th June, 2012. Whether the Policy Relaxation Committee (PRC) has the power to impose conditions, while allowing clubbing of the 3 AAs? - Held that: - the powers of the PRC, while making its recommendations are wide and are purely discretionary. The PRC, in its order dated 24th April, 2015 has considered the relevant facts and permitted the clubbing of the three Advanced Authorizations and while permitting the said clubbing, conditions ‘as it deemed fit’ have been imposed by it which cannot be said to be perverse or arbitrary. The review order of the PRC dated 26th April, 2016 also clearly shows that the case of the Petitioner was discussed at length and it is only thereafter, that the decision dated 24th April, 2015 was reiterated. The submission of the Petitioner that the PRC does not have the power to impose such conditions does not appear to be correct inasmuch as the order of clubbing is by itself an exercise of power for granting an exemption - The exercise of discretion to grant exemption is a delicate balance between balancing the hardship of the Petitioner and the adverse impact on trade. The PRC, in the background of the Petitioner's case, has imposed conditions which are neither illegal nor arbitrary. The earliest AAs which were issued, dated back to 21st November, 2007 with an export obligation period of 24 months. The Petitioner has had sufficient time to discharge the said obligations. In fact, even the Public Notice No. 79 which permitted clubbing of the three AAs with a time span of 36 months was a relaxation. The invocation of the said relaxation after the same was superseded and amended cannot be claimed as a matter of right. On the date when the application was filed by the Petitioner, the said Public Notice No. 79 had already lapsed. The relaxation by the PRC allowing clubbing of the three AAs being an exercise of discretionary power and the conditions imposed thereon, being in furtherance of the exercise of that discretion for granting exemption from applicable policy and procedure, this Court does not deem it a fit case for interference under Articles 226/227 of the Constitution of India. Petition dismissed - decided against petitioner. Issues Involved:1. Entitlement to invoke Public Notice No. 79 dated 13th October, 2011.2. Power of the Policy Relaxation Committee (PRC) to impose conditions while allowing clubbing of Advance Authorizations (AAs).Detailed Analysis:Issue No. 1: Entitlement to invoke Public Notice No. 79 dated 13th October, 2011 on 29th August, 2012 and seek clubbing of the three AAsThe Petitioner filed an application for clubbing of three AAs on 29th August, 2012. On this date, the policy in effect was the one dated 5th June, 2012, not the policy under Public Notice No. 79. Therefore, the Petitioner could only seek clubbing as per the policy effective on the date of filing the application. The subsequent Notification dated 18th April, 2013 clarified that applications filed till 4th June, 2012 would be considered under Public Notice No. 79, which was logical since the new policy came into effect from 5th June, 2012. Thus, the cut-off date of 4th June, 2012 was not arbitrary but logical.Policies that allow exemptions and benefits are dynamic, not static. The Petitioner cannot claim a vested right to a particular notification indefinitely. The Petitioner’s legitimate expectation for consideration under Public Notice No. 79 is invalid as the request for clubbing was made after the supersession of the said Public Notice. The authorities correctly rejected the application for clubbing of the three AAs as per the Notification dated 5th June, 2012.Issue No. 2: Power of the PRC to impose conditions while allowing clubbing of the three AAsThe Petitioner approached the PRC for an exemption. The powers of the PRC are outlined in Para 2.5 of the Foreign Trade Policy 2009-14, which allows the PRC to grant exemptions and impose conditions as deemed fit. The PRC, in its order dated 24th April, 2015, considered the relevant facts and permitted clubbing of the three AAs with conditions. This decision was reiterated on 26th April, 2016. The PRC’s power to impose conditions is within its discretionary authority and not arbitrary.Exemptions are discretionary and not a right. The PRC’s conditions, imposed in public interest, are not perverse or arbitrary. The Bombay High Court in Kim Chemicals Limited v. Union of India supported the PRC’s power to impose such conditions. The principle of legitimate expectation does not override public interest. The Supreme Court in Reliance Telecom Ltd. v. Union of India stated that legitimate expectation cannot override public interest.The Petitioner had sufficient time to discharge the obligations under the earliest AAs issued on 21st November, 2007. Public Notice No. 79 was a relaxation, and its invocation after being superseded cannot be claimed as a right. The PRC’s discretionary power to allow clubbing and impose conditions does not warrant interference under Articles 226/227 of the Constitution of India.Conclusion:The writ petition and pending application were dismissed with no orders as to costs.