TOSHNIWAL EXPORTS Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners are export house carrying on business of exports, inter alia video cassettes. In 1988 the petitioners secured from their customers order for supply of 10,000 blank video cassettes. The cassettes were to be exported by the customers. In terms of the Import and Export policy 1988-91 a party manufacturing an item for 100% export becomes entitled to an Imprest licence in terms of which the party is permitted to make import into India free of customs duty, the raw material required for manufacture of the said item. In accordance with the Policy, on august 26, 1988 the petitioners applied for issue of Special Imprest Licence under the Duty exemption Entitlements Scheme. Respondent No. 2 issued the Imprest Licence on December 18, 1988. The petitioners submitted on March 1, 1989 another application for issue of Special imprest Licence, but on this occasion the respondents claimed that licence will be issued only after intimation is received from the concerned authorities. The petitioners also discovered that the said Imprest Licence issued in accordance with the first application was defective as the said licence referred to the expressed 'advance licence' instead of 'special Imprest Licence'. The petitioners accordingly returned the licence to the respondents for carrying out the correction. The respondents assured to do so, but failed to do the needful. The refusal to correct the first licence and failure is issue second licence has given rise to this petition.

(2.) SHRI Devdhar, learned counsel appearing on behalf of the respondents, stated at the outset that the respondents have no objection to issue Special Imprest Licence in accordance with the second application filed by the petitioners. Shri Devdhar had objection to correction of the licence granted in accordance with the first application on the ground that the petitioners were not entitled to Special Imprest Licence. Shri Devdhar submitted that as per para 220 (iii) of import-Export Policy 1988-91 Special Imprest Licence could be issued to the registered exporter for the duty free import of raw materials and components required for manufacture and supply of products to free trade zone/export processing zones etc. Shri Devdhar did not dispute that the petitioners complied with this requirement. The learned counsel urged that paragraph 220 also refers to exemption notification issued under the Customs Act and set out in Appendix 13-B of the Policy. Shri Devdhar submits that exemption is not granted in respect of import of raw materials which are required for manufacture and supply of products to free trade zones/export processing zones in accordance with the customs notification. This is the only reason why Shri devdhar claims that Special Imprest Licence in accordance with the first application is not permissible. The submission is devoid of any merit. It is difficult to appreciate how the respondents can deprive the petitioners of Special Imprest Licence when the conditions in paragraph 220 of the Policy are satisfied. The import authorities have nothing to do with the exemption notification issued under the Customs Act. The respondents are bound to issue special Imprest Licence and are not required to examine the effect of exemption notification under the Customs Act. In my judgment, the action of the respondents in not correcting licence initially issued is wholly unsustainable and the respondents are bound to issue the two Special imprest Licence as demanded by the petitioners.

(3.) ACCORDINGLY, rule is made absolute and the respondents are directed to issue to the petitioners two Special Imprest Licence as claimed within period of six weeks from to-day. There will be no order is costs.