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2003 Supreme(P&H) 87
PUNJAB & HARYANA HIGH COURT
N.K.Sodhi and M.M.Kumar JJ.
Malwa Cotton Spinning Mills Ltd.
Versus
Joint D.G.F.T., Ludhiana
Civil Writ Petition No. 4614 of 2002,
Decided On : JANUARY 20, 2003
The Department is bound to issue the redemption certificate if the petitioner has complied with its obligations under the licence, and the Department's initial communication regarding the product's coverage by SIONs is binding.
Headnote:
Export - Foreign Trade - SIONs for textiles - J-50 - 1, 2, 3, 4, 5
Fact of the Case:
The petitioner, an exporter, applied for an Annual Advance Licence to export cotton nylon blended yarn. The Department initially informed the petitioner that the product was covered by item at serial No. J-50 of SIONs for textiles. However, later the Department refused to issue the redemption certificate, claiming that the item was not covered by SIONs.
Finding of the Court:
The court found that the petitioner had disclosed the intention to export cotton nylon blended yarn in its application for the fixation of Standard Input Output Norms. The court held that the petitioner had complied with its obligations under the licence and that the Department was bound to issue the redemption certificate.
Issues: The issues revolved around the Department's refusal to issue the redemption certificate and the petitioner's compliance with its obligations under the licence.
Ratio Decidendi: The court held that the Department's action in not issuing the redemption certificate, despite initially informing the petitioner that the product was covered by SIONs, could not be sustained. The court also emphasized that the petitioner had disclosed its intention to export the product in its application, and therefore, had complied with its obligations under the licence.
Final Decision: The writ petition was allowed, and the respondents were directed to issue the redemption certificate asked for by the petitioner. No order as to costs was made.
N.K.Sodhi, J.
1. Petitioner before us is an exporter of different kinds of yarns including cotton nylon yarn. The Joint Director General of Foreign Trade, Ludhiana issued an Annual Advance Licence dated 5-10- 1999 to the petitioner on the basis of which it could export material worth Rs. 3,90,74,750/- (F.O.B. value) and was entitled to import inputs worth Rs. 2,93,79,510/-. The material could be imported and exported in accordance with the input-output norms as fixed by the Department. The imports against such a licence are exempt from payment of additional customs duty, special additional duty, anti dumping duty, safeguard duty, if any, in addition to Basic Customs duty and surcharge thereon. The aforesaid licence could be obtained only in respect of those items for which standard input-output norms have been declared and in case such norms are not declared the exporter has to approach the Director General of Foreign Trade, New Delhi for getting those norms declared. The petitioner wanted to export cotton nylon blended yarn (75% cotton - 25% nylon) and approached the Special Advance Licensing Committee in the office of the Director General of Foreign Trade, Ministry of Commerce, New Delhi with an application dated 3-8-1998 for fixing standard input-output norms for this variety of cotton. The application was filed along with the requisite documents and on receipt thereof the Joint Director General of Foreign Trade, New Delhi as per communication dated 28-9-1998 informed the petitioner as under :
#28;With reference to your application No. Nil dated 3-8-98 on the subject mentioned above, I am directed to inform you that your request has been considered by SALC in its 20/99 meeting held on 24-9-98. The Committee observed that this item is covered under Sr. No. J-50 of SIONs for textiles and, therefore, it was decided to maintain status quo #29;.
2. Petitioner utilising the Annual Advance Licence held by it and after the receipt of the aforesaid communication from the Department imported 9045 Kg. of nylon fibre on 9-3-2000 and some quantity of raw cotton on 10-4- 2000. It also exported different kinds of yarns including 100 per cent cotton yarn, cotton/nylon yarn (85/15) and cotton/nylon yarn (75/25) during the period from December, 1999 to May, 2000. After importing the raw material and exporting different kinds of yarns, the petitioner applied to respondent No. 1 for redemption of obligation of the Annual Advance Licence. It may be mentioned that redemption of obligation is a kind of a certificate issued by the Department certifying that the licensee had fulfilled its obligations in terms of the licence. Respondent No. 1 has refused to issue the redemption certificate on the basis of a letter dated 19-10-2001 addressed to him by the Joint Director General of Foreign Trade, New Delhi whereby the Department has now taken the view that entry at serial No. J50 in the Standard Input-Output Norms (SION) does not cover cotton nylon blended yarn. Respondent No. 1 then communicated this decision to the petitioner and also called upon it to pay duty on the material imported along with interest thereon. It is this decision of the Department which is now under challenge in this petition filed under Article 226 of the Constitution. The deficiency letter dated 6-3-2002 issued by respondent No. 1 requiring the petitioner to deposit customs duty and interest on the imported material and remove the deficiencies in its Annual Advance Licence has also been impugned in this writ petition.
3. In response to the notice of motion, the respondents have filed their reply. It is pleaded that in case the petitioner had any grievance with the Department it should have approached the Grievance Committee constituted in the office of the Director General of Foreign Trade, New Delhi and that the present writ petition is not the appropriate remedy. It is also pleaded that the export product at serial No. J50 of the Textiles Product Group as contained i
