2019 (8) TMI 919 - HC - Customs

Court validates retrospective extension of Export Obligation Period under EPCG Authorization

M/s RAJKALP MUDRANALAYA PVT. LTD Versus UNION OF INDIA

M/s RAJKALP MUDRANALAYA PVT. LTD Versus UNION OF INDIA - 2019 (368) E.L.T. 485 (Guj.) Issues Involved:1. Extension of Export Obligation Period (EOP) under the EPCG Authorization.2. Legality of the retrospective application of the EOP extension.3. Compliance with the terms of the EPCG scheme.4. Petitioners' failure to fulfill export obligations and subsequent actions by authorities.5. Availability of alternative remedies for the petitioners.Detailed Analysis:1. Extension of Export Obligation Period (EOP) under the EPCG Authorization:The petitioners sought an extension of the EOP under the EPCG Authorization, which expired on 27.03.2015. They approached the respondent authorities for an extension, paid the requisite fees, and were granted a two-year extension. However, this extension was applied retrospectively from the original expiry date, leaving the petitioners with insufficient time to fulfill their obligations effectively.2. Legality of the Retrospective Application of the EOP Extension:The petitioners argued that the extension should have been granted prospectively from the date of the extension order, not retrospectively from the original expiry date. They contended that the retrospective extension effectively provided only 2-3 months to fulfill their obligations, which was inadequate. The court noted that the extension was granted from the original expiry date, and even if it had been prospective, it would have expired by the time of the court's decision.3. Compliance with the Terms of the EPCG Scheme:The petitioners failed to fulfill their export obligations within the stipulated timeframe and did not regularize their position within the required period. Despite multiple notices and opportunities provided by the respondent authorities, the petitioners did not comply with the conditions of the EPCG scheme. The respondent authorities argued that the petitioners had scant regard for complying with the scheme's terms and only approached for an extension after significant delays.4. Petitioners' Failure to Fulfill Export Obligations and Subsequent Actions by Authorities:Due to the petitioners' failure to fulfill their export obligations, the respondent authorities took action under Section 110(1) of the Customs Act, seizing the petitioners' machines. The petitioners sought the removal of the seal and provisional release of the goods, which was granted subject to certain conditions, including executing a bond and furnishing a bank guarantee.5. Availability of Alternative Remedies for the Petitioners:The court noted that the petitioners had not exhausted all available departmental grievance redressal options, such as approaching the Grievance Redressal Committee under the Foreign Trade Policy. The court emphasized that the petitioners should have availed these alternative remedies before seeking relief through a writ petition.Conclusion:The court found no merit in the petitioners' arguments and upheld the respondent authorities' actions. The extension granted was within the authorities' power and was correctly applied from the original expiry date. The petitioners' failure to fulfill their obligations and their delay in seeking extensions were significant factors in the court's decision. Consequently, the court rejected the petition and discharged the notice.