LAWS(DLH)-2004-10-93

AVAL EXPORTS Vs. UNION OF INDIA

Decided On October 13, 2004
AVAL EXPORTS Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) The short question that arises for consideration is whether the petitioner is entitled to value based licences or quantity based licences. The petitioner prays that the decision of the respondents contained in the letter dated 4.1.1995 be quashed.

(2.) Petitioner No.1 is engaged in the export of 100% Mulbury raw silk garments fitted with seq. beads. The handbook of procedure 1992-1997 provides for a scheme wherein an obligation is cast on the exporters to make exports with entitlement to have the import of raw material without payment of duty. The petitioner was entitled to value based licences in lieu of the exports made. The policy was issued by the Government to promote exports to earn more foreign exchange. The incentives were given to the exporters in the form of duty free licences entitling the exporter to import raw material against the said exports. The scheme entitlement worked in the following manner. An exporter on having a confirmed export order intending to take benefit under the Scheme was required to make application for grant of duty free licences before the Advance Licensing Committee and becomes entitled to duty free licences in terms of the norms laid down in Volume II of the Hand Book of Imports & Exports Procedure. The exporter was required to carry out export obligations to procure raw material indigenously and without waiting for the grant of the duty free licence, he would become entitle to the duty free licence in pursuance of the said application. The second method was that the exporter was to make import of raw materials in advance after having been granted a licence and execute necessary legal undertakings supported by bank guarantees to get the imported goods cleared without payment of duty and put to use the said raw materials in producing the said exports and meeting the export obligations as per the conditions of a licence.

(3.) The petitioners procured large number of export orders from different parts of the world and in particular from Europe and USA for export of mulbury silk garments. During the period 29.6.1992 to 12.8.1993, petitioner No.1 moved 26 applications for grant of value based licences of the total value of US$ 15.65 lakhs for import of raw material, i.e., Mulbury Raw Silk. At the relevant point of time when the applications were made, the petitioner's entitlement was to duty free licences on value based. The concept of value based licences is set out in the policy. If an exporter makes exports of the goods of certain amount, it would be entitled to import the raw materials like silk, sequence and beads without payment of duty of particular amount irrespective of the quantity/weight thereto as per the endorsement of licence. The relevant provisions in the handbook of procedures laying down the norms with regard to petitioner's entitlement were as under :-