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IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22-12-2021 CORAM THE HONOURABLE MR. JUSTICE S.M.SUBRAMANIAM WP Nos.14307 to 14309, 12212
22315 and 22316 of 2015 And MP Nos.1, 1, 1, 1, 1 and 1 of 2015 M/s.Intimate Fashions (India) Private Limited, Represented by its Deputy General Manager-Finance, Mr.David Robert Samuel Ponraj, Thirupporur – Kottamedu High Road, Nandhivaram, Guduvancheri – 603 202. .. Petitioner in WPs 14307 to 14309 and 12212 of 2015 M/s.ABI SHOWATECH (India) Ltd., Represented by its Deputy General Manager-Finance, Mr.M.Ramachandran, Stone Acre, No.67, Chamiers Road, Chennai – 600 028. .. Petitioner in WPs 22315 and
22316 of 2015 vs.
The Additional Director General of Foreign Trade, Ministry of Commerce and Industry, No.26, Shastri Bhavan, Annexe Building, Haddows Road, 4th and 5th Floor, Chennai – 600 006. .. Respondent in WPs 14307 to 14309 and 12212 of 2015 Director General of Foreign Trade, Ministry of Commerce, Udyog Bhavan, New Delhi. .. R-1 in WPs 22315 and 22316 of 2015 Assistant Director General of Foreign Trade, Ministry of Commerce and Industry, No.26, Shastri Bhavan, Annexe Building, Haddows Road, 4th and 5th Floor, Chennai – 600 006. .. R-2 in WPs 22315 and 22316 of 2015 WP 14307 of 2015 is filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records comprised in File No.04/21/88/00148/AM13/17 dated 31.03.2015 on the file of the respondent to permit transferability and utilisation of the said license and extend the validity period of the license as may be felt necessary by this Court in light of the fact that the petitioner has been put to undue hardship on account of the recovery proceedings during which could not transfer/utilise the said license.
WP 14308 of 2015 is filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records comprised in File No.04/21/88/00151/AM13/17 dated 31.03.2015 on the file of the respondent to permit transferability and utilisation of the said license and extend the validity period of the license as may be felt necessary by this Court in light of the fact that the petitioner has been put to undue hardship on account of the recovery proceedings during which could not transfer/utilise the said license.
WP 14309 of 2015 is filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records comprised in File No.04/21/88/00167/AM13/14 dated 31.03.2015 on the file of the respondent to permit transferability and utilisation of the said license and extend the validity period of the license as may be felt necessary by this Court in light of the fact that the petitioner has been put to undue hardship on account of the recovery proceedings during which could not transfer/utilise the said license.
WP 12212 of 2015 is filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorarified Mandamus, calling for the records comprised in File No.04/21/88/00143/AM14 dated 09.02.2015 on the file of the respondent to permit transferability and utilisation of the said license and extend the validity period of the license as may be felt necessary by this Court in light of the fact that the petitioner has been put to undue hardship on account of the recovery proceedings during which could not transfer/utilise the said license.
WP 22315 of 2015 is filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorari, calling for the records of the second respondent viz., F.No.04/66/88/00022/AM14 culminating in the letter F.No.04/66/88/00022/AM14 dated 13.02.2015 and quash the order No.F.No.04/66/88/00022/AM14 dated 13.02.2015.
WP 22316 of 2015 is filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorari, calling for the records of the second respondent viz., F.No.04/66/88/00039/AM14 culminating in the letter F.No.04/66/88/00039/AM14 dated 16.02.2015 and quash the order No.F.No.04/66/88/00039/AM14 dated 16.02.2015.
For Petitioner in WPs 14307 to
14309 and 12212 of 2015 : Mr.S.Muthuvenkataraman For Petitioner in WPs 22315 and 22316 of 2015 : Mr.S.Muurugappan For Respondent WPs 14307 to
14309 and 12212 of 2015 : Mr.B.Sudhir Kumar, Senior Panel Counsel.
For Respondents in WPs 22315 and 22316 of 2015 : Mr.A.Murughan, Central Government Standing Counsel.
C O M M O N O R D E R
These writ petitions on hand are instituted questioning the order passed for recovery of excess due credit issued from Status Holder Incentive Scrip (SHIS) Scheme.
2. All the petitioners are Export Oriented Units and under the Scheme, they have availed certain benefits. It is a policy decision, which was being implemented.
3. The respective learned counsels appearing on behalf of the petitioners importantly raised that the order impugned is hit by the Rule of Limitation and thus, the Authorities have no jurisdiction to issue the order impugned. It is passed beyond the period of two years. Thus, liable to be set aside.
4. It is contended that the policy benefit availed are sought to be recovered merely based on the audit objection raised. Audit objections are raised based on the erroneous interpretation of the terms of the Scheme and beyond the scope of the Scheme and thus, the very initiation of recovery proceedings are in violation of the Scheme benefits as promised by the respondents.
5. Even on merits, the petitioners have raised several grounds.
The extent of the Scheme benefits conferred and utilisation etc., which all are stated by the petitioners in their affidavits and during submissions.
6. This Court raised a question that an order impugned is the order admittedly passed pursuant to the audit objection raised by the Department of Audit. Thus, in the absence of any adjudication whether the High Court would be in a position to form an opinion with reference to various disputes raised on merits, including the point of limitation.
7. The respective learned counsels for the petitioners contended that they have raised all grounds on merits and as far as the limitation is concerned, it is sufficient, if it is established that the order impugned has been passed beyond the period of two years and similar point was considered by various Hon'ble High Courts and the Hon'ble Supreme Court of India and therefore, the point of limitation is to be considered in these cases and accordingly, the orders impugned are liable to be set aside.
8. It is contended that once the benefits of the Scheme are utilised, then the Authorities have no power to cancel or impose recovery.
9. The learned Central Government Standing Counsel and the Senior Panel Counsel raised an objection by stating that the audit objection raised by the CRA Audit was taken into consideration by the Authorities Competent for the purpose of issuing the order impugned.
10. In January 2015, the CAG Audit (CRA – Customs Revenue Audit), Chennai, which audited the file, observed that in terms of para 3.16.1 (b) of FTP, Status Holders shall be entitled to a duty credit scrip @ 1% of FOB value of Exports. In terms of para 3.10.3 (b) of the Handbook of Procedures (Volume-I) 2009-2014, an applicant who has availed zero duty EPCG authorisation during the year 2010-2011 or 2011-2012 or 2012-2013 shall not be entitled to SHIS for that year i.e., for exports made during the respective previous years 2009-2010, 2010-2011, 2011-2012. Such SHIS applications will be summarily rejected.
11. It was pointed out by the Audit that the provisions of this para was not extended to 100% Export Oriented Units (EOUs), where the EOUs enjoy the benefit of duty free import/indigenous procurement of goods including capital goods in terms of para 6.2 (b) of the FTP 2009-2014 for the entire period of their status of EOU.
12. Admittedly, the petitioners fell under the category of EOUs. The audit pointed out this provisions for regulating the SHIS duty credit in respect of EOUs has put them in an advantageous position as compared to other Status Holder Exporters, who are denied the SHIS benefit if they avail zero duty EPCG.
13. This Court is of the considered opinion that audit objection raised on the one end and the order impugned based on the other end must be looked into for the purpose of considering the importance involved for adjudication of the disputed issues.
14. Let us look into the order
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