The main legal point established in the judgment is that the date of arrival of imported goods and the applicability of the relevant policy and customs notification are crucial in determining the entitlement to customs duty benefits.

JUDGMENT

Kausik Chanda, J. - These two appeals arise out of a common judgment and order dated August 25, 2009, passed by the learned Single Judge allowing the writ petition. Both the appeals are being disposed of by this co`mmon judgment.

2. The facts leading to filing of these appeals, in brief, are as under.

3. The writ petitioner No.1 is a company, registered under the Companies Act, 1956 (hereinafter referred to as the company ) and carries on business of dyeing, bleaching and finishing of cotton knitted fabrics.

4. The company, on January 14, 1999, applied before the Director General of Foreign Trade for grant of ten percent customs duty licence to import three textile machines which was approved by the said authority by a letter dated February 18, 1999. On the basis of the said import licence, the company imported three textile machines which arrived in Kolkata Port in the same month. The bills of entry for the same, however, were filed by the company only on August 20, 1999 and August 23, 1999 respectively.

5. At this juncture, it is necessary to notice that Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 empowers the Central Government to frame and amend export and import policy (EXIM Policy in short).

6. The Department of Revenue extends any benefit of exemption enunciated in the exempt policy by making a corresponding notification in the official gazette under Section 25 of the Customs Act, 1962.

7. In exercise of such power conferred under Section 5 of the said Act, the Ministry of Commerce, Central Government framed the export and import policy for the period 1997-2002. (hereinafter referred to as EXIM Policy 1997-2002).

8. The corresponding customs notification to such EXIM Policy 1997 - 2002 issued under Section 25 of the Customs Act, 1962 was published by a notification No. 29/97-Cus. dated 1st April, 1997.

9. As per the EXIM Policy 1997-2002 and the corresponding customs notification issued under Section 25 of the Customs Act, 1962, such licence attracted ad valorem customs duty @ 10% on the cost, insurance and freight (CIF) value of the imported capital goods.

10. The aforesaid EXIM Policy 1997-2002 was amended by the Ministry of Commerce, Government of India by a notification No. 1(RE-99)/1997- 2002 effective from 1st April, 1999 allowing importation of textile machinery as capital goods for zero customs duty, subject to export obligation.

11. Ministry of Finance (Department of Revenue) issued the corresponding notification No. 122/99-Cus. dated November 04, 1999. In other words, though the Ministry of Commerce allowed importation of textile machinery for zero customs duty with effect from 1st April, 1999, the Ministry of Finance issued the corresponding exemption notification under Section 25 of the Customs Act only on November 04, 1999.

12. In view of the amended EXIM Policy, the company made several representations before the Director General of Foreign Trade for converting the said ten per cent customs duty licence to zero duty licence. The Director General of Foreign Trade, however, turned down such prayers.

13. The company, under protest, paid ten per cent customs duty, and the said goods were released by the customs authorities in the port at Kolkata. The company, thereafter, claimed the benefit of the amended EXIM Policy and requested the customs authorities for refund of a sum of Rs.12,44,509.80/- which was paid as ten per cent of the CIF value of the goods.

14. The customs authorities refused to refund the duty. Such refusal was challenged by the company by way of filing a writ petition before this Court.

15. Following the direction dated September 13, 2002, passed in the said writ petition, the Director General of Foreign Trade by a reasoned order dated July 30, 2003, rejected the claim of the company.

16. In the said order, the Director General of Foreign Trade noted that the Policy Interpretation Committee of Director General Foreign Trade held a meeting on December 16, 2002,