IMPORTANT POINT
The theory of vested right is misconceived and out of place in introduction of "Duty Exemption Scheme" in the Export & Import Policy of Union of India.

Headnote:Constitution of India-Article 136-Two appeals by special leave-D.B. of High Court in LPA upheld decision of single Judge in W.P. but with a small alteration in the relief granted viz. the appellant shall be entitled to advance licences in "Duty Exemption Schemes" according to pre-revised value addition norm with respect to the actual exports effected by it before 25.9.92 but not for the exports affected thereafter-Whether the appellant is entitled to advance licences on the basis of the value addition norm obtaining prior to 25.9.92 on the ground that it had applied therefor prior to the said date? (No)-Appeal of appellant dismissed and that of respondent allowed. (Para 16)
       Held : 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. (Para 10)
       Held also : 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. (Para 11)
       Held further : Now, coming to the argument of the authorities taking advantage of their own wrong, viz., delay in issuing the advance licences, it may be noticed that there is no allegation/averment in the writ petition that the authorities have deliberately delayed the issuance of the advance licences. But in the absence of any plea in this behalf, it is not possible to hold that that there has been any undue delay, procrastination or deliberateness on the part of the authorities in issuing the licences. There is no finding either by the learned Single Judge or the Division Bench to this effect. In such a situation, the mere fact that the appellant is likely to suffer some loss or prejudice - assuming that the said plea is factually true - cannot be a ground either for invoking the rule of promissory estoppel or to otherwise bind the Government to apply and adopt the value addition norm in force on the date of application. (Para 12)

JUDGMENT

B.P. Jeevan Reddy, J.-Leave granted.

2. With a view to encourage exports, the Government of India issued the "Export and Import Policy (1st April, 1992 and 31st March, 1997)" introducing inter alia a scheme called "Duty Exemption Scheme" contained in Chapter-VII. Under this scheme, imports of duty free raw materials, components, intermediates, consumables, parts, spares including mandatory spares and packing materials required for the purpose of export production could be permitted subject to the fulfilment of a time bound export obligation and value addition as may be specified." Advance licences could be based on either value of quantity; it was for the exporter to apply either for a value based advance licence or a quantity-based advance licences [vide Clauses 47 and 48]. Clause 49 in Chapter-III sets out the particulars to be mentioned in the advance licence. One of the particulars to be mentioned is "(d) the value addition in accordance with the standard Input-Output norms published by means of a Public Notice or, in respect of items for which such norms have not been published, value addition as may be specified by the competent authoity." Clause 52 expressly provides that "the Chief Controller of Imports and Exports may, on the recommendation of the Advance Licencing Committee (ALC) modify the norms or prescribe additional norms." Clause 59 prescribes the eligibility for applying for an advance licence. It says, "any merchant exporter or manufacturer exporter who holds an Importer-Exporter Code number, a specific export order/letter of credit and is in a position to realise the export proceeds in his own name may apply for duty free licences." Clause 60 prescribes that "value addition norms, as specified by means of a Public Notice issued in this behalf, shall apply to duty free licences". Clause 63 provides that a licence issued under the said scheme shall specify the export obligation which has to be fulfilled within the period specified therein. Clause 66 provides that "Exports/supplies made from the date of receipt of an application under this scheme by the licensing authority may be accepted towards discharge of export obligation...". (Clause 66 has been amended later in 1993 and 1994. We are, however, concerned with the unamended Clause 66.)

3. On 31st March, 1992, a public notice was issued, as contemplated by Clause 49(d) and 60 specifying the value addition at 1000 percent in the case of "frozen marine products packed in polythene bags". On September 25, 1992, a change was effected in the value addition norm-instead of 1000 percent, it became 1900 percent.

4. The appellant (we shall be referring to S.B. International Limited as the appellant and the Assistant Director General of Foreign Trade and Union of India as respondents) is engaged in the export of marine products. It entered into six contracts with certain foreign buyers to supply marine products. These contracts were entered into on 27th May, 4th June, 10th June, 22nd June, 26th June and 27th June, 1992. In respect of these export commitments, the appellant made five applications for advance licences, i.e. on 29th May, 18th June, 24th June and 15th September, 1992. [The last mentioned application, we are told, was in respect of Contracts 5 and 6 mentioned above. We are also told that the value of the last two contracts is very substantial as compared to the value of the first four contracts.] The appellant says that by September 25, 1992, the export obligation concerned in the first three applications was fully discharged whereas in respect of the fourth application, it was fulfilled to the extent of 81% and in the case of the last mentioned application, it was fulfilled to the extent of 21%. The advance licences were not issued by September 25, 1992. On that date, a change was effected, as aforesaid, in the value addition norms, enhancing the value addition norm to 1990 percent from 1000 percent. Licences were issued according to this enha

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1996 Supreme(SC) 194

IMPORTANT POINTThe theory of vested right is misconceived and out of place in introduction of "Duty Exemption Scheme" in the Export & Import Policy of Union of India.

Cases Referred (7)

IMPORTANT POINT
The theory of vested right is misconceived and out of place in introduction of "Duty Exemption Scheme" in the Export & Import Policy of Union of India.