SURYOVONICS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner, an industrial concern, seeks writ for mandamus challenging the correctness of the orders passed initially by the first respondent dated 3.3.1998, as confirmed in Appeal by the second respondent dated 4.5.1999, arising out of the proceedings purported to have been issued under Section 4-1 of the Imports and Exports (Control) Act, 1947 (for short the Act, 1947).

(2.) The facts undisputed, are that the petitioner company has entered into a memorandum of understanding with 'Energy Conversion Devices Inc., of USA' (ECD) with mutual obligations, where under the said ECD has agreed to provide the technology and with buy-back 50% of the installed capacity. Accordingly, the petitioner company submitted an application-dated 20.8.1986 to the Secretariat of Industrial Approvals, Government of India for issuance of letter of intent or industrial licence as contemplated under the Rules. However, the said letter of intent was granted on 19.4.1988 i.e., after lapse of period of 20 months. Immediately, the petitioner applied for conversion of the letter of intent into industrial licence on 12.12.1988. The said licence was issued on 26.12.1999, again with a delay of 12 months. The petitioner states that normally such licence has to be issued within a period of six weeks only and in terms thereof the licence was granted as late as on 24.7.1991. Under the said licence, the petitioner is permitted to manufacture "Photovoltaic Cells, Modules and products/ systems based on Amorphous Ssilicon". The complaint of the petitioner is that having regard to such long delays, necessarily it lead to delayed commencement of actual activity. In spite of that, the petitioner was able to commence the commercial production on 1.4.1990. The said ECD agreed for an additional memorandum of understanding to buy-back 100% of the production for two years. Once again with further delay on the part of IDBI, ICIC and IFCI the approval for the project was granted on 20.2.199.1 for the further phase to be implemented, therefore according to the petitioner, having regard to the delay of almost 54 months i.e., from 20.8.1986 to 20.2.1991 resulted in increase of project cost from Rs.15 crore to about Rs.20.25 crore having an effect on the viability. Meanwhile, the said ECD sold itself to M/s. Cannon, a Japanese multinational company and a new company was formed under the name and style "United Solar Systems Corporation' in early 1991. The said new company M/s.Cannon with a view to avail the benefits of NAFTA and lower cost of labour in Maxico, decided to set up a plant similar to Phase-I of the petitioner at the border in Mexico. Further M/s. Cannon reneged on agreement complaining about the delays in implementation. Therefore, the petitioner had to seek for alternative market for exports or to make supplies to domestic markets. During the period 1989 to May 1991, the petitioner imported capital goods of Rs.54.57 lakhs and raw material of Rs.87.91 lakhs for implementation of the project and availed the exemption since it is 100% export oriented unit. With all the difficulties so faced, the petitioner could export to a rune of Rs.68.09 lakhs between 1.4.1991 to 31.3.1996. Further, in view of the encouragement by the Government of India for the development of application of use of solar power in the country, the petitioner made efforts to develop domestic market. Therefore, the petitioner had filed an application on 12.3.1992 for debonding to enable domestic sale. Thereupon the second respondent herein/ Appellate Committee, Government of India, as per their communications dated 4.6.1992, 29.12.1993 and 8.8.1995 permitted the petitioner to withdraw from 100% EOU scheme subject to following conditions:

(3.) On submission of 23 Ex-bond bills of entry for assessment of duties under the Customs Act and Rules thereunder on 29.12.1995, the Assistant Commissioner of Excise passed an order on 5.2.1996 assessing the duties and penalty at Rs.36,82,917/-. Aggrieved thereby, the petitioner has filed an appeal to the Commissioner (Appeals) Customs and Central Excise, Hyderabad, which was dismissed on a technical objection of non-compliance of pre-deposit for an appeal. Meanwhile, as per the letter dated 22.3.1996, the Development Commissioner, Visakapatnam Export Processing Zone, intimated the Excise Authorities and the petitioner that 10% penalty on CIF value of the imported capital goods for non fulfillment of export obligation was exempted and sought for necessary action for issue of final debonding letter after fulfilling the conditions.