Export-control saving clause cannot create new export rights; licensing conditions, excise duty, and interest were upheld.

A saving clause in an export-control order preserved only pre-existing, approved export rights and did not create a new entitlement to export unapproved goods; export of non-basmati rice therefore remained subject to the regulatory regime and related licensing conditions. The licensing authority could validly impose a minimum export price and registration-cum-allocation requirement for such exports. An amended industrial licence could also require export of edible rice bran oil, and domestic clearances by a 100% export oriented unit attracted excise duty and interest under the statute, notwithstanding interim orders. The unit was also held liable for the price differential on rice exported under conditional relief.

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Issues: Whether Clause 15(j) of the Export (Control) Order, 1988 saved the export of non-basmati rice by a 100% export oriented unit; whether the Government could impose a minimum export price and registration-cum-allocation requirement for non-basmati rice; whether the industrial licence amendment obligated export of edible rice bran oil and whether its sale in the domestic tariff area could be permitted without excise duty; and whether the unit was liable to pay the price difference, excise duty and interest.

Issue (i): Whether Clause 15(j) of the Export (Control) Order, 1988 saved the export of non-basmati rice by a 100% export oriented unit.

Analysis: Clause 15(j) was a saving provision and could not enlarge the pre-existing rights of an export oriented unit. Read with Clauses 3 and 4, it preserved only those products whose manufacture and export had been approved under the industrial licence or export scheme. The approved project for the unit was for Furfural and the connected products covered by the licence, not for unrestricted export of any item manufactured in the factory. The subsequent inclusion of non-basmati rice in the export control schedule therefore did not exempt the unit from the regulatory regime.

Conclusion: The saving clause did not permit export of non-basmati rice without compliance with the Export (Control) Order.

Issue (ii): Whether the Government could impose a minimum export price and registration-cum-allocation requirement for non-basmati rice.

Analysis: Once non-basmati rice was placed in the relevant schedule, export could be permitted only in accordance with the licence conditions imposed under the order. The licensing authority was competent to prescribe conditions not inconsistent with the Act or the Order, including a minimum export price, and the requirement of registration-cum-allocation by APEDA was valid. A unit could not claim a vested right to export below the prescribed price merely because it was an export oriented unit.

Conclusion: The minimum export price and registration-cum-allocation condition were valid and enforceable.

Issue (iii): Whether the industrial licence amendment obligated export of edible rice bran oil and whether its sale in the domestic tariff area could be permitted without excise duty.

Analysis: The amendment to the industrial licence was supported by the unit's own earlier undertaking to export edible rice bran oil if permitted, and Rule 16 of the 1952 Rules empowered amendment of licences by adding conditions. The amended condition therefore validly required export of edible rice bran oil. Further, goods manufactured by a 100% export oriented undertaking and cleared into the domestic market were subject to excise duty under the Central Excises and Salt Act, 1944, and the interim orders permitting clearance could not override the statute. Since the unit obtained the benefit of interim relief, it could not resist duty liability or interest on the statutory dues withheld from the revenue.

Conclusion: The unit was bound to export edible rice bran oil and was liable to pay excise duty and interest on its domestic clearances.

Issue (iv): Whether the unit was liable to pay the price difference on the non-basmati rice exported under interim orders and the consequential duty and interest on the edible rice bran oil clearances.

Analysis: The exports of non-basmati rice and the domestic clearances of rice bran oil were made only because of conditional interim orders that expressly preserved the revenue's claim if the unit ultimately failed. Having accepted those benefits, the unit could not disown the conditions attached to them. The Court therefore enforced the differential amount for rice exports and the excise duty together with interest for oil clearances.

Conclusion: The unit was liable to pay the quantified differential amount, duty and interest.

Final Conclusion: The regulatory restrictions on export were upheld, the challenge to the licence condition failed, and the monetary liabilities arising from the conditional interim reliefs were enforced against the unit.

Ratio Decidendi: A saving clause in an export-control order preserves only pre-existing, approved rights and cannot be used to claim a new right to export unapproved goods; goods of a 100% export oriented unit cleared into the domestic market remain subject to the applicable excise levy and interest unless a valid statutory exemption exists.

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