TaxTMI 
TaxTMI 
2018 (7) TMI 1760
X X X X Extracts X X X X
X X X X Extracts X X X X
....utput Norms ("SION" for short) published by the Director General of Foreign Trade, 227 kgs of Vitamin Mixes was permitted to be imported against export of one Metric Tonne of Fish products. The exporter in this case Suryo Udyog Limited (Exporter), exported Fish product prior to March 1997. This export was to take place from 17th October 1996 to 19th November 1996 and the exporter applied for issuance of Quantity Based Advance Licence under Foreign Trade Policy 1997-2002 (for short "FTP"). The Office of the Director General of Foreign Trade (for short "DGFT") issued deficiency letter to the exporter on 8th November 1996 seeking certain declarations. On 4th February 1997 the DGFT claimed that the exporter did not reply and the case was closed by the DGFT. On 1st April 1997, the SION published by the DGFT were revised and total quantity of 0.227 metric tonnes of the goods allowed to be imported was bifurcated into 0.027 Metric Tonnes for Vitamin Mixes and 0.200 Metric Tonnes for Mineral Mixes. In other words, against export of one Metric Tonne of Fish products 27 kg of Vitamin Mixes were allowed as against 0.227 of Vitamin Mix allowed before the revised norms. In other words the no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mport items. The exporter justified the issuance of licence based on the norms prevailing at the time of export by referring to paragraph 66 of the Export Import Policy for the year 1996-1997. This was done on 14th February 1998 (Exhibit E-4 page Nos. 8687). On 24th February 1998 the Director General of Foreign Trade, with the approval of the Additional Director General of Foreign Trade, allowed amendment in licence No.0013882 by way of inclusion of additional items of imports. On 25th May 1998 subsequent to the transfer of the licence, the DGFT issued impugned instructions restricting the quantity of Vitamin Mixes to the extent of 27 kg against export of one Metric Tone of Fish products until further orders. On 28th September 1998 by (Exhibit C1 to C3 page Nos.5358) the petitioner had imported two consignments of 750 kgs of Vitamin Mixes which was allowed to be cleared by debiting the said license. On 23rd November 1998 (ExhibitC4 page No.59) the petitioner imported 500 kgs of Vitamin Mixes and filed Bill of Entry seeking clearance against the said licence. Since, the respondent No.4 was not allowing clearance relying on the instructions dated 25th May 1998, the petitioner cleared....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cense be issued based on the norms prevailing at the time of export of goods having regard to paragraph 66 of the policy. It is claimed that the DGFT issued advance license in question in or around 27th November 1997 by accepting the interpretation/representation of the exporter. 11. After this Writ Petition was filed, an affidavit has been filed by the Commissioner of Customs and it is stated that the main allegations in the Writ Petition are directed against the DGFT, Additional DGFT and the Joint DGFT, as far as the customs are concerned the facts as narrated above are more or less admitted but the stand is that based on the circular and revised policy the customs have dealt with these imports. This affidavit is filed on 25th June 1999. There is an affidavit in reply filed on 22nd January 2015 and in that affidavit it is asserted by the respondent Nos.1 and 2 that the firm was required to export 1,40,000 kgs of Headless Shrimps of species Black Tiger/Penaeus Monodon/and White Shrimps/Penaeus indicus for FOB value of US$ 11,98,000/to GCA countries. It is then stated that the DGFT was justified in issuing deficiency letters. It is also claimed that there were amendments ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssue of Show cause notice dated 14th/15th June, 1999, where the subject matter is this particular advance licence, vide O.I.C. No.7612 of 1999, which is pending before the Hon'ble Cuttack High Court. The Petitioner could have preferred appeal before the Additional Director General of Foreign Trade, New Delhi (Appellate Authority), as per Section 15 of the Foreign Trade Development Regulation Act, 1992." 13. On these materials, we have heard the learned counsel appearing for the parties and with their assistance we have perused the Writ Petitions, the affidavits placed on record and their exhibits. We have also perused the relevant statutory provisions and terms and conditions of the policy. 14. In Writ Petition No.1868 of 1998, which is the prior petition and as stated above the facts being identical except the details of the licences etc, affidavits and additional affidavits have been filed by the parties. Suffice to say that in this writ petition two Notice of Motions were taken out seeking stay of the order dated 30th June 1999. The earlier Motion was to allow the petitioners, by staying operation of the letter dated 25th May 1998, import and clearance of full quantiti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rts were not disputed by the Customs Department at any point of time. The goods were allowed to be cleared duty free, without any objection. However, the Custom Department had disputed part quantity of one consignment of Vitamin Mix of 125 kgs imported vide Bill of Entry No.10597 dated 23rd November 1998, even though this quantity was well within reduced quantity norms and issued on 01st April 1997. The petitioner obtained clearance of this consignment covered by the said Bill of Entry on payment of applicable custom duties without availing benefit of the Advance licence. The petitioner submits that there were no proceedings pending with the Customs Department in relation to either the duty free clearance or the duty paid clearance of 125 kg of the subject goods. Further, the petitioner is not interested in claiming refund of the duty paid on such consignment of 125 kg. Mr. Sridharan submits that all the imports made by the petitioner were/are within reduced entitlement based on revised norms published by DGFT, effective from 01st April 1997. He also lays special emphasis on the fact that Vitamin Mixes falling under Exim Code 230990 are freely importable under the ITC HS of Export ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....petitioner cannot be held guilty of abetment in issuing the licence with the old norms in October, 1997. Indeed, there is no material on record to show that the Petitioner was involved in the original licence holder applying for the licence. In fact, the Petitioner has no direct dealing with the original licence holder. The Petitioner purchased the licence from the first transferee and hence charge of abetting in issuance of the license with old norms cannot be sustained. 18. Without prejudice, show cause notice called upon the original licence holder and its Directors to show cause against the proposed cancellation or licence and imposition of penalty. The show cause never required the Petitioner to show cause against the cancellation of license and imposition of penalty. The imposition of the penalty is beyond the proposal in the show cause notice." 20. Mrs. Bharucha appearing on behalf of respondent Nos.1 and 2 however submitted that the view taken by the adjudicating authority is correct and requires no interference. She justifies the fact that this was a case of a clear violation of the law justifying the imposition of penalty. She therefore, submits that the petition be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uty free shipping bills to drawback shipping bill may also be permitted by the Customs authorities in case the application is rejected or modified by the licensing authority. The exports/supplies made in anticipation of the grant of a duty free licence shall be entirely on the risk and responsibility of the exporter." 23. Reliance is also placed on the ITC(HS) Classifications of Export and Import Items prevalent from April 1997 to March 2002 and the Handbook of Procedure Volume-II referring to the Duty Exemption Scheme and Standard Input Output Norms. It is in this background and in the light of the undisputed factual position that we must see the show cause notice. The show cause notice refers to the acts of the exporter and thereafter says that the noticee firm was required to export 1.40,000 kgs of Headless Shrimps and in view thereof letter dated 25th May 1997 the license was amended on 27th November 1997. The exporter transfers the license to M/s.Praful G. Kamdar and Sons referred as transferee No.1 by letter dated 28th November 1997 and the petitioner Dilipkumar and Company was the second transferee from 30th December 1997. All the allegations in the show cause notice thus....