SARDAR GURCHARAN SINGH Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) This case arises out of the Duty Entitlement Scheme evolved by the Government of India as part of its Import and Export Policy. These policies are formulated periodically. The policy which this case relates to is the Import and Export Policy 1988-91. The provisions relating to the Duty Exemption Scheme are contained in Appendix 19 of the policy printed for the period in question.

(2.) The Duty Entitlement Scheme essentially was formulated as an impetus for exports. An exporter is entitled to import duty free material subject to terms and conditions specified in the relevant policy. The conditions relevant for this case include the obtaining of an appropriate licence. One of the kinds of licences is an advance licence. Such advance licences are granted to manufacturer exporters, inter alia, holding valid export orders in their names. The Advance Licence allows such exporter-manufacturers to import duty free material which are utilised for the manufacture of the proposed export items or to replenish the materials which have gone into the production of the resultant products already exported in anticipation of the grant of the Advance Licence [vide paragraphs 220(1) and 224(1) of the Policy]. In other words a licensee can import material by way of replenishment of the indigenous material used for exporting products. The licensing authority also issues a Duty Exemption Entitlement Certificate which has to be endorsed by the Customs Authorities with audited entries of Imports and Exports. After all the entries have been made the DEEC has to be returned to the licensing Authority to show that the licensee has complied with the condition stipulated in the Advance Licence.

(3.) The question at issue in this case is whether the Customs Authorities are bound to endorse the DEEC certificate with the exports made by the petitioner and release goods imported by the petitioner under the Duty Exemption Scheme. The facts are as follows: