BINDWALA ELECTRICAL INDUSTRIES Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) The Court : In the writ application the petitioners inter alia prayed for -

(2.) The fact of this case in short is as follows: The petitioner company is a registered manufacturer exporter engaged in manufacture of ACSR conductors for the use in distribution of electricity by State Electricity Board and for that purpose the petitioner inter alia import Aluminium Wire Rods and High Carbon Wire Rods which are used as raw material in the petitioners factory for manufacture of ACSR conductors. The petitioner, besides supplying the ACSR conductors in India also supply their finished products to the projects sponsored by IDA/IBRD etc. as per their orders. It is stated that the Union of India had from time to time in public interest offered various incentives to promote exports from the country. Until the early part of year 1982 such incentives included duty free imports which were available only to actual physical exports. However, in or about Sept. 1982 a new policy was introduced by the respondent No. 6 and the incentive of duty free import inter alia of raw materials was extended also to deemed exports viz. supplies of diverse products by Indian manufacturers to projects financed by International Development Association (IDA) or International Bank for Reconstruction and Development (IBRD) and bilateral or multi-lateral aided projects of the World Bank and other Governments amongst others. In accordance with para 190(b)(f) and (1) read with paras 2(3), 4(1) and (2) of the Appendix 19 of the Import Policy 1985-88 (referred to as the said Import Policy) manufacturers who either had confirmed export orders on hand or who had already supplied goods on deemed export basis also become eligible to import materials free of duty for use in the manufacture of products supplied by such manufacturer as deemed exports. A public notice being Notice No. 46-ITC(PN)/92 dated 8th September 1982 was issued in this behalf and express directions were issued therein and thus representations were made that for supplies to be made to the aforesaid projects by indigenous manufacturers. Special licences would be issued permitting duty free import of raw materials subject to fulfilment of certain prescribed conditions. The Government of India in exercise of powers conferred by Section 25(1) of the Customs Act, 1962 in public interest by Notification No. 210/82 dated 10-9-1982 exempted from payment of customs duty and additional duty of customs all raw materials and components imported for the manufacture of goods to be supplied to various organisations mentioned therein on the terms and conditions mentioned in the said notification.

(3.) The petitioner's case is that in view of para 190(b)(f) and (i) read with-Ap-pendix 19 of the said Import Policy, registered exporters are either entitled to import the raw materials against duty exemption scheme for which purpose they are issued advance import licences. However, in respect of deemed exports inter alia to IBRD/IDA aided projects the registered exporters are entitled to special impresent licences. Pursuant to para 4(1) and (3) of Appendix 9 of said Import Policy these licences are either issued for fulfilment of exports against confirmed valid export orders or they are issued to registered manufacturers exporters who are engaged in actual production of export during the preceding three financial years. The petitioners stated that in respect of such prior exports it is not required to execute bond/legal agreement as set out in para 24(4) of Appendix 19 of the said Import Policy. On or about 30th April 1985 the petitioner No. 1 received an order from the West Bengal State Electricity Board against Global Tender financed by IBRD, an,agency of the World Bank for supply of ACSR conductors. It is stated that as per Appendix 19 of the said Import Policy, of the Government of India, the petitioner No. 1 was entitled to receive import licence for importation of the raw materials required for the manufacture of the aforesaid ACSR conductors. In the premises, on or about July 10, 1985 the petitioner No. 1 applied to the licencing authorities of the Government of India for grant of an import licence for import of the necessary raw materials for manufacture of ACSR conductors in terms of the aforesaid contract of the said Electricity Board. It was specifically mentioned therein that the licensing authority should treat discharge of export obligations in terms of the said licence by the petitioner No. 1 right from the date of application, that is, on and from July 10,1985. In February 1986 after nearly seven months the licencing authority of the Government of India issued an Import licence bearing No. F/L/3142680/C/XX dated February 4, 1986 as well as a duty exemption entitlement certificate (DEEC) No. 009722/Cal allowing the petitioner No. 1 to import E.C. Grade Aluminium Rods of 99.5 per cent purity to the extent of 131.305 MT. high carbon steel wire rods diameter 5.5mm to the extent of 64.575 M.T. and zinc of 99.99 per cent purity in slab to the extent of 5.117 M.T. on 20th June 1986 another Import licence was issued, by Government of India the respondent No. 4 being the Import licence bearing No. P/K/3143453 dated 20th June 1986 allowing the petitioner No. 1 to import Aluminium Rods of 99.5 per cent purity to the extent of 19.77 M.T. high carbon steel wire Rods in diameter 5.5mm to the extent of 9.225 M.T. Zinc slab 99.9 per cent purity, to the extent of .767 MT. both the said licences and the DEEC book were issued stipulating condition of import of the said goods as per the aforesaid Notification No. 210/82-Cus. dated September 10,1982 issued by the Central Government. It was stated that as there was a considerable delay of about seven months in issuance of the said licence and as the project in question where the said raw materials were to be used was a time bound project for which funds came from the World Bank and would lapse if not completed within the period stipulated therefor, the petitioners had to complete supply of ACSR conductors in terms of the aforesaid contracts with the West Bengal State Electricity Board by procuring raw materials in-degenously. This the petitioner had to do as otherwise in terms of the contract it was liable to penalty for delivery beyond the prescribed period or date. It was stated that the licensing authorities in issuing the aforesaid import licence and DEEC book waived the condition of submission of bond while importing the said goods before the customs authorities. Pursuant to the said import licence the petitioners in or about December 1986 imported at the port of Calcutta, a portion of the said goods per vessel 'Jessnic'. The said portion of the said goods arrived at the port of Calcutta on or about first week of March 1987 when the petitioners filed a Bill of Entry for home consumption in respect thereof before the respondent customs authorities. In view of the imports being made under the special import licence under the Duty Exemption Scheme granted to the petitioner No. 1 the petitioners claimed clearance of the said portion of the said goods without payment of any customs duty thereon, in accordance with para 190 read with Appendix 19 of the said Import Policy and the aforesaid Notification No. 210/82-Cus-tom. It was stated that the respondent Custom Authority however refused to allow the clearance of the goods unless the petitioners paid duties of Customs thereon as and at rates specified therefor. According to this said respondents since the order of West Bengal State Electricity Board had already been executed and export obligation thus fulfilled, the said goods could be allowed to be cleared only upon payment of duty.