1996 (1) TMI 125 - SC - Customs

Supreme Court: Value Addition Norm for Licences Governed by Date of Grant, Not Application Date

The Supreme Court held that the appellant is not entitled to advance licences based on the value addition norm in force prior to September 25, 1992. The ... Whether a vested right accrued to the appellant for issuance of advance licences as per the value addition norm in vogue on the date of filing of the said applications the moment it made those applications? Whether any subsequent change in policy effected before the issuance of licences, is not applicable to such licences. Held that:- We are, therefore, of the opinion that the contention that a vested right accrues to an applicant for issuance of advance licence on the basis of the norm obtaining on the date of application is unacceptable. The Scheme and the context militate against the contention. The fact that the policy is statutory in nature (delegated legislation) has no relevance on the question at issue. It would be wrong to equate the filing of an application for advance licence with the filing of a suit where it is held that appeal being a substantive right, the right of appeal inhering in the party on the date of filing of the suit cannot be taken away by a subsequent change in law. So far as the argument of promissory estoppel is concerned, it is equally unsustainable in the facts and circumstances of the case. Having regard to the nature of the advance licence - import first and export later - there is no room for this argument. The discretion inhering in the authority to take into consideration the exports effected after the date of filing of the application for advance licence does not detract from its essential character, as explained hereinabove. We may also mention that no precise data has been furnished by the appellant in support of the said plea. In the absence of such data, the plea of promissory estoppel is misconceived. Appeal dismissed. Issues Involved:1. Whether the appellant is entitled to advance licences based on the value addition norm in force prior to September 25, 1992.2. Whether a vested right accrued to the appellant upon filing the applications for advance licences.3. Application of the rule of promissory estoppel.4. Whether the authorities can be accused of taking advantage of their own delay in issuing the licences.Detailed Analysis:Issue 1: Entitlement to Advance Licences Based on Pre-September 25, 1992 NormsThe appellant argued that since it had applied for advance licences before the change in value addition norms on September 25, 1992, the applications should be governed by the earlier norm of 1000 percent. The Division Bench of the High Court partially upheld this contention, allowing the pre-revised norm for exports effected before September 25, 1992, but not for those effected afterward. The Supreme Court, however, held that the relevant norm is the one in force on the date of the grant of the licence, not the date of the application. Thus, the appellant is not entitled to licences based on the pre-revised norm.Issue 2: Accrual of Vested Right Upon Filing ApplicationsThe appellant claimed a vested right to obtain licences based on the norms in force when the applications were filed. The Supreme Court rejected this argument, stating that the mere filing of an application does not create a vested right. The right to an advance licence arises only from the policy, which is subject to change. The Court emphasized that the policy's nature and context do not support the notion of a vested right accruing from the date of application.Issue 3: Application of Promissory EstoppelThe appellant argued that the government should be estopped from applying the revised norms because it had relied on the earlier policy while entering into export commitments. The Supreme Court found this argument unsustainable, noting that the nature of advance licences (import first, export later) leaves no room for promissory estoppel. The appellant did not provide precise data to support the plea, and the Court reiterated that promissory estoppel requires the establishment of specific ingredients, which were not met in this case.Issue 4: Authorities' Delay in Issuing LicencesThe appellant contended that the authorities delayed issuing the licences and should not benefit from their own wrong. The Supreme Court noted that there was no allegation or finding of deliberate delay by the authorities. The process of issuing licences involves verification and satisfaction of compliance with relevant provisions, and reasonable time must be afforded for this. In the absence of any plea of undue delay, the Court held that the authorities' actions were justified.Conclusion:The Supreme Court dismissed the appellant's appeal and allowed the appeal by the respondents, holding that the appellant is not entitled to advance licences based on the value addition norm in force prior to September 25, 1992. The Court emphasized that the policy in force on the date of the grant of the licence is applicable, and no vested right accrues from the date of application. The arguments of promissory estoppel and undue delay by the authorities were also rejected.