TaxTMI 
TaxTMI 
2016 (7) TMI 628
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....he said Notifications/Public Notice/Circular, as to be applicable to licences issued under the Duty Free Import Authorization (DFIA) Scheme contained in Para 4 of the Foreign Trade Policy (FTP) 2009-14, after 01.08.2013. Consequent prayers, in the form of revalidation of the DFIAs No. 0310688209, dated 28.03.2012 and 0310690633 dated 13.04.2012, issued and subsequently transferred to the petitioner, and for reassessing the ex-bond Bill of Entry (hereinafter referred to as "B/E") filed by the petitioner, under the said DFIAs, in respect of soda ash imported by it thereunder, have also been made. 4. In view of the fact that the goods imported under the above mentioned B/E are pending clearance at ICD Ludhiana, with the petitioner unwilling to clear the goods without being extended the benefit of the DFIA scheme and the Customs authorities and the authorities under the Directorate General of Foreign Trade (DGFT) (Respondents 1 to 3 in the writ petition) unwilling to extend, to the petitioner, the benefit of the said Scheme, the writ petition has been treated as urgent and heard finally, with the consent of all parties. 5. The DFIA scheme is one of the export promotion schemes co....
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....thout conversion into ARO INVALIDATION letter. Transferee of DFIA shall also be eligible for ARO/invalidation letter facility. Validity period of ARO shall be as prescribed in HBP v1. 4.1.12 Holder of Advance Authorisation, Advance Authorisation for Annual Requirement and DFIA may, instead of applying for an ARO or Invalidation letter, availed of the facility of Back-to-Back Inland Letter of Credit in accordance with the procedure specified in HBP v1. 4.1.13 Prohibited items of imports mentioned in ITC (HS) shall not be imported under Advance Authorisation/DFIA. Further items reserved for imports by STEs cannot be imported against Advance Authorisation/DFIA. However those items can be procured from STEs against ARO or Invalidation letter. STEs are also allowed to sell goods on High Sea Sale basis to holders of Advance Authorisation/DFIA holder. In addition, STEs are permitted to issue "No Objection Certificate (NOC)" for import by advance Authorisation/DFIA holder. Authorisation Holder would be required to file Quarterly Returns of imports effected against such NOC to concerned STE and STE would submit half-yearly import figures of such imports t....
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....position, in the present case, that the DGFT endorsed both the DFIAs transferable, in the case of DFIA dated 28.03.2011 on 10.07.2013 and in the case of DFIA dated 13.04.2012 on 28.09.2015. 7. The two DFIA Licenses,dated 28.03.2012 and 13.04.2012, involved in the present case, were originally issued to the Exporter. The DFIAs were duly transferable in terms of para 7.2 of Handbook of Procedure [HoP] issued under the Foreign Trade Policy, 2009-14 [FTP].The said DFIAs were issued on post-export basis, i.e. exports, in fulfilment of the Export Obligation cast by the said DFIAs, were made in advance of issuance thereof. Details of the said exports and Export Obligation Discharge Certificates (EODCs) issued by the DGFT in acknowledgment of the said exports having been made and of export obligation having been completed thereby, are not disputed either in the counter-affidavit filed by the respondents, or during the course of oral submissions made before this Court. 8. The list of items permitted to be imported, duty free, under the said DFIAs, included Soda Ash, as per the amendment sheets, attached to the said licence. There is also no dispute on the fact that the Standard Input ....
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....the DGFT which have substantially altered the benefits available to the petitioner, as transferee for value, of the DFIA and seeks, by the present writ petition, quashing thereof and, consequently extension to the petitioner of the benefit of the DFIA scheme. 17. Whereas para 4.2.3 of FTP made paras 4.1.11, 4.1.12, 4.1.13 and 4.1.14 of the FTP applicable to DFIA holders, the impugned Notification dated 01.08.2013 supra amended para 4.2.3, by making DFIAs also subject to para 4.1.15 of the FTP, which itself was inserted only by the said Notification dated 01.08.2013. The said para 4.1.15 stipulated that, wherever the SION permitted use of generic input or alternative inputs, unless the name of the specific inputs got indicated/endorsed in the relevant Shipping Bills [S/Bs], and these inputs, so endorsed, matched the description in the relevant S/Bs, the DFIA would not be redeemed. The said clause further stipulated that, at the time of EODC or redemption thereof, the DGFT would allow only those inputs which have been specifically indicated in the S/Bs. Para 4 of the said Notification was even more injurious to the petitioner, inasmuch as it stipulated that "inputs actually used i....
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....of Export Obligation, are made and, further, imports, only of such items, to be effected, as were used in the manufacture of the export product, irrespective of the SION norms. He submits that, where the exports were made prior to issuance of the DFIAs themselves, it is obviously impossible for the importer, importing goods thereafter, to limit the imports to the goods used in the product already exported, or to use the same in export goods, and stresses the absurdity of such a stipulation. In fine, the learned Senior Counsel re-emphasises that the DFIAs originally issued to the Exporter and subsequently transferred to the petitioner, could only be subjected to the conditions existing in the FTP, HOP and in the instructions issued by the DGFT in this regard, on or before the date of issuance of the DFIAs. DFIAs issued prior to 01/08/2013, in other words, could not, according to the learned Senior Counsel, be subjected to conditions and limitations which came into being thereafter, in the impugned Notifications/Circular/Public Notice. The doctrine of promissory estoppel is also pressed into service, in this regard. 22. While learned Counsel appearing for Respondent No 4 does not ....
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....in fulfilment of the Export Obligation thereunder were effected by the Exporter / Licence holder prior to issuance of the said DFIAs. It would be impossible, therefore, for any additional indication/endorsement to be entered in the Shipping Bills whereunder the exports had already been effected. Clearly, therefore, requiring the holder or the transferee of the DFIA, which was issued on post-export bases, to comply with para-4.1.15 as inserted by the above-mentioned impugned Notification dated 01/08/2013, would amount to insisting on an impossibility. On the face of it, therefore, insistence on the said requirement would be hit by the well-established principle that no person could be required, by the law, to perform the impossible (lex non cogit ad impossibilia). [Refer State of Rajasthan v Shamsher Singh, 1985 Supp SCC 416] 26. Para-4 of the impugned Notification dated 01/08/2013 reads as under: "4. Effect of this Notification: Inputs actually used in manufacture of the export product only be imported under the authorisation. Similarly inputs actually imported must be used in the export product. This has to be established in respect of every Advance Authorisation/DFIA.....
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....ases of post-export DFIA or transferees of such DFIAs. Else, the DFIAs would be rendered worthless for all such holders/transferees of the DFIAs. This, in our view, could never have been the intention of a beneficial schemes such as the DFIA Scheme. It is trite that beneficial schemes had to be so interpreted as to extend the availability of the benefit thereof, rather than accorded any restrictive interpretation, which would render the schemes worthless to the persons who seek to avail the promised benefit. 30. Even on first principles, we find that neither Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, nor para 1.2 of the FTP, whereunder the impugned Notifications dated 01/08/2013 and 21.08.2014 purport to have been issued, allow retrospective divesting, by any newly added provision, of the rights already available to the Licence holder /subsequent transferee, of the DFIA. It is well settled that the power to legislate retrospectively is not inherent, and has to be specifically conferred by statute no such power seems to emanate, either from Section 5 of the Foreign Trade (Development and regulation) Act, 1992, or from para- 1.2 of the FTP. The followin....
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....ative inputs / products mentioned in the SION. This guideline, therefore, would govern the availability of import benefits under the subject DFIA during their lifetime. 34. Details of exports made in respect of subject DFIAs make it clear that even prior to issuance of the DFIAs exports had already taken place. Export Obligation Discharge Certificates (EODCs) in respect of the said DFIAs were also issued by the DGFT. This fact of discharge of Export Obligation also stands acknowledged by the DGFT by making endorsement of transferability on the body of the subject DFIAs which, as per para-4.2.6 of the FTP and para-4.3.6 of the HOP, could only be after fulfilment of Export Obligation. 35. For all the above reasons we are convinced that the various restrictions introduced by the impugned Notification No 31 dated 01.08.2013, DGFT Circular dated 02.08.2013, Public Notice No 35 dated 30.10.2013 and DGFT Notification dated 21.08.2014, could not be made applicable to imports effected under the subject DFIAs. 36. This would also flow from the principle of promissory estoppel, inasmuch as, at the time of issuance of the DFIAs, it was held out by the respondent to the DFIA holders as....
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....s or instructions would, therefore, be inapplicable or liable to be struck down. 41. The judgement of the Bombay High Court inSevantilal (supra), on which the respondents place pointed reliance, is clearly distinguishable. That was a case in which the issue involved related to exemption from antidumping duty, and the amendment in this regard by Notification 24/2013 dated 18.04.2013, which limited the exemption earlier available under Notification 98/2009-Cus, dated 11.09.2009. These were, in turn, provoked by the amendment of the FTP, by introducing a provision to the effect that exemption from anti-dumping duty would be available on actual user basis only, before endorsement of transferability. It was in this context that the petitioner, in that case, contested its right to avail the benefit of exemption from anti-dumping duty. It specifically recorded in para 38 as follows- "38. Equally, we are not required to consider whether any subordinate legislation is being amended retrospectively." Unlike Sevantilal (supra), we are in the present case not only concerned with retrospective amendment of the FTP, and issuance of Notifications, Public notice and Circular which r....