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2024 Supreme(Bom) 676
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
K. R. Shriram, Jitendra Jain, JJ.
Phoenix Industries Limited - Petitioner
Vs.
The Union of India Through the Secretary, Ministry of Commerce having its office at Udyog Bhavan, New Delhi - Respondent
WRIT PETITION NO.15057 OF 2023
Decided On : 16-08-2024
Advocate Appeared:
For the Petitioner: Mr. Prakash Shah a/w Mr. Jas Sanghavi i/b. PDS Legal
For the Respondent: Mr. D. P. Singh a/w Mr. Advait Sethna and Mr. Vikas Salgia, Mr. Saket R. Ketkar Advs.
IMPORTANT POINT
The court established that non-submission of 'Bill of Export' does not equate to non-discharge of export obligations if sufficient alternative evidence is provided.
Headnote:
Export - Advance Authorisation - Foreign Trade Policy Sections - The court interpreted the Foreign Trade Policy provisions regarding the necessity of 'Bill of Export' for fulfilling export obligations, concluding that other documents could suffice, thus influencing the decision to quash the impugned minutes of the Policy Relaxation Committee.
Fact of the Case:
The petitioner challenged the decisions of the Policy Relaxation Committee, which rejected their request for not submitting 'Bills of Export' for supplies made to SEZ units under Advance Authorisation, despite other evidence of export being provided.
Finding of the Court:
The court found that the refusal to accept alternative evidence of export was arbitrary and unreasonable, as the petitioner had provided sufficient documentation to prove compliance with export obligations.
Issues: Whether the absence of 'Bill of Export' can be deemed a failure to discharge export obligations when other evidence is available.
Ratio Decidendi: The court held that proof of supply to SEZ units can substitute for 'Bill of Export' in demonstrating fulfillment of export obligations under the Foreign Trade Policy.
Result: The court quashed the impugned minutes of the Policy Relaxation Committee and directed the issuance of Export Obligation Discharge Certificates.
JUDGMENT :
K. R. Shriram, J.
1. Rule. Rule made returnable forthwith. By consent of the parties, heard finally.
2. Petitioner has approached this Court challenging the legality and validity of decisions taken by the Policy Relaxation Committee (“PRC”) in meeting No.07/AM23 held on 21st June 2022 and meeting No.08/AM24 held on 26th June 2023, interalia, rejecting request of Petitioner by holding that “Bill of Export” is a mandatory document in terms of Foreign Trade Policy (“FTP”) for discharge of Export Obligation (“EO”) of Advance Authorisation (“AA”) even in case of supplies to Special Economic Zone Unit (“SEZ”). According to Petitioner the action on part of Respondents in not accepting the supplies made by Petitioner to units located in the SEZ in discharge of EO against AA issued to Petitioner solely on the ground of non-submission of “Bills of Export”, notwithstanding other evidence on record substantiating Petitioner’s claim of export, is bad in law.
3. Petitioner is engaged in the business of manufacturing, refining and export of Non-Ferrous Metal Alloys from its units situated in Dadra-Nagar Haveli, Silvassa. Petitioner had received purchase orders from one Ideal Fasteners (India) Pvt. Ltd. located in SEZ for manufacture and supply of Zinc Alloy Ingots Zamak-5. Accordingly, Petitioner obtained an AA for the purpose of duty-free import of goods stated therein to be used in export of final products Zinc Alloy Ingots Zamak-5 to its customers located in the SEZ. Petitioner was permitted to import goods of CIF value of Rs.3,73,79,160/- against which export obligation of FOB value of Rs.4,36,25,000/- was under the AA. According to Petitioner, and admittedly so, supply of goods to units located in SEZ is deemed export and treated to be valid discharge of export obligation for the purpose of the aforesaid AA in terms of FTP. Undisputedly, the final products of Petitioner were exported / supplied to its customer within the SEZ, but due to an inadvertent error while supplying the goods neither Petitioner nor the buyers on behalf of Petitioner prepared and filed the “Bills of Export” corresponding to the said supplies made by Petitioner under the said licenses. It is not disputed that other than the Bill of Export, Petitioner had supplied all other documents including the application in ARE-1 duly assessed by proper officer having jurisdiction over the factory of Petitioner and authorised officer having jurisdiction over the units located in SEZ have been submitted. As the export obligation period expired, Petitioner sought an extension to Respondent No.3 which was granted and the license validity date was amended from 24th June 2017 to 23rd December 2017.
4. By a letter dated 26th November 2018, Petitioner submitted an application for redemption of the AA in Form ANF-4f alongwith all documents mentioned therein. Petitioner was issued a deficiency letter by Respondents which was cured by Petitioner vide its letter dated 21st February 2019. Petitioner states that it informed Respondent that the “Bill of Export” was already submitted as invoice which contained all the relevant details and the same was endorsed by the Excise/Customs Department. Petitioner received another deficiency letter dated 13th May 2019 and was also called upon to attend a personal hearing, if deficiency was not cured. Petitioner attended the personal hearing given by Respondent No.3 on 12th June 2019 and submitted that the supply to the SEZ unit was under the invoices and the said invoices alongwith ARE-1 be considered as evidence of export in lieu of “Bills of Export” and Export Obligation Discharge Certificate (“EODC”) be issued.
5. This request of Petitioner was not accepted and after few personal hearings and few deficiency letters, Petitioner received the impugned order by way of minutes of the meetings dated 21st June 2022 and 26th June 2023 issued by Respondent No.2. By the said minutes, the Committee decided to reject Petitioner’s request to condone the pro
