LEATHER INDIA Vs. UNION OF INDIA

JUDGEMENT

(1.) Both the writ petitions raise a common question with regard to the validity of Export Trade Control Order No. E(C)/0.88/AM(91) dated 5-8-1991.

(2.) W.P. No. 15560 of 1991 is filed by the manufacturers of leather who manufacture the same for the purpose of export to foreign countries. W.P. No. 1312 of 1992 is filed by an Association comprising of members in the business of leather as leather tanners, manufacturers and exporters. Insofar as the facts are common in both these writ petitions and the question raised in both the writ petitions is also based purely on the point of law, I think suffice it to refer to the pleadings in the writ petition No. 15560 of 1991.

(3.) The petitioners are the manufacturers of leather for the purpose of export to foreign countries and they are manufacturers of leather in small scale and are also tanners. They export finished leather to foreign countries, particularly to United States of America, United Kingdom, and certain other European countries. It is stated in the affidavit that guidelines have been laid down from time to time for the purpose of helping the customs authorities and that the first of such guidelines for identification of finished leather were made in the year 1960. It is also stated that subsequently guidelines were streamlined based on report of a committee headed by one Dr. Seetharamiah in the year 1972, and that it was necessitated because of a great demand for leather in foreign countries resulting [in] great demand for exports from India of finished leather. It seems the Government of India constituted Leather Sectional Committee, Indian Standards Institution (hereinafter referred to as "I.S.I.") consisting of experts in the field of leather industry, particularly scientists from the Central Leather Research Institute (hereinafter referred to [as] "C.L.R.I.n) Customs representatives under the I.S.I. which was fixing the guidelines for the purpose of determining the finished leather for export. The I.S.I. Leather Sectional Committee, appointed by the Government of India in the year 1976 evolved certain guidelines for determination and identification of finished leather. The Government of India, thereafter circulated the recommendations widely to all concerned for over a period of three months and received comments, objections and suggestions and that after the receipt of objections and suggestions from interested parties including the industry and with the help of the Indian Standard Institution, the guidelines were approved in the year 1976. Consequent on the reformulation of guidelines, the guidelines for identification of finished leather were published in the year 1976 by the Indian Standard Institution for the first time bringing within its fold large varieties of finished leather which are entitled to be classified as finished leather and that in the year 1977, the Government of India received various representations, the Indian Standards Institution reconsidered and revised and made its first revision of guidelines for identification of finished leather, for the purpose of export. It is alleged in the affidavit that consequent upon the first revision made by the Indian Standards Institution in the year 1979, when few monopolistic forces which are mainly manufacturing leather on finished goods made representations to the Government of India, considering the fact that small scale sector also grew well to which class the petitions belong. It is also alleged in the writ petition that this resulted in the second revision which was made without publicity and in a totally unscientific manner. Representations were made and on that basis, a third revision was issued with reference to definition of dyeing, finishing operations for suede leather, maximum permissible thickness for cow lining leather and minimum run for dress glove leathers. It is stated in the affidavit that the said third revision was undertaken after consultation with the trade and industry and also with experts including scientists from Central Leather Research Institute. It was widely welcomed by the Industry and it was represented by the I.S.I. that the said revision will be in force upto 1989. A revenue Notification No. 197 of 1981--customs was issued under which exemption was granted in terms of Section 25 of the Customs Act determined under the third revision. It is also alleged that the third revision resulted in more profit to the small scale sector and considerable increase in the Cow of foreign exchange into the country. However, is the year 1985, a communication from the Under Secretary, Government of India, Ministry of Commerce was issued on 30.7.1985 which was affirmed by means of an Executive Order No. 14/002/085 dt. 2.8.1985 setting at naught the third revision made is the year 1981. On the basis of deliberation and inoperative with effect front 1.9.1985, the second revision which was made in the year 1979 has been brought back. It is also alleged in the affidavit that in effect, in the year 1985, the Government of India wanted to resurrect the 1979 guidelines which had inherent defects against, the interests of the public and against the interests of the country.