RAJ EXPORTS Vs. NATIONAL ALUMINIUM CO LTD

JUDGEMENT

(1.) BOTH O.J.Cs 2022/95 and 3586/95, as suggested and agreed by the learned lawyers for the respective parties, have been considered together, O.J.C. No. 2022/95 is at the instance of Fair Exports Private Ltd. and its Director and Shareholder Mr. Sunil Maheshwari against the National Aluminium Co. Ltd., Assistant Collector of Customs, D. D. Foreign Trade and M/s. Hindustan Lever Ltd. praying, inter alia : To admit the writ petition and issue a RULE NISI calling upon opposite parties to show cause as to why the goods imported against the licences bearing Nos. 3390229 dated 30 -6 -1993 and 3390244 dated 8 -7 -1993 or to be imported against licences Nos. 3390218, 3390216 and 3390214 shall not be given duty free clearance forthwith and if opposite parties fail to show cause or show insufficient cause make the said Rule absolute; And Issue a writ in the nature of mandamus or any other appropriate writ, order or direction directing the opposite party No, 2 to give duty free clearance of the goods imported against the value based advance licence Nos. 3390229 dt. 30 -6 -1993 and 3390244 dated 8 -7 -1993 or to be imported against licence Nos. 3390218, 3390216 and 3390214; And In the alternative issue an appropriate writ, order of direction to opposite party No. 1 to forthwith transfer valid transferable licence to the petitioner acceptable to opposite party No. 2 in lieu of the licence bearing Nos. 3390216, 3390244, 3390214 and 3390229 transferred earlier; And In the alternative issue writ in the nature of mandamus and/or any other appropriate writ, order or direction commanding the opposite party No. I to make payment of any duty that is liable to be paid by the petitioners and/or their agents under the aforesaid five licences towards the goods imported; And Issue a writ in the nature of mandamus or any other appropriate writ, order or direction commanding opposite party No. 3 to extend the validity of the licences bearing Nos. 3390218, 3390216, 3390244, 3390214 and 3390229; And Issue a writ in the nature of certiorari or any other appropriate writ, order or direction quashing the letter issued by opposite party No. 2 dated 20th March, [1995] bearing No. F. No. S.16 -DESC/6724 (Imp)/95 GR; And Order exemplary cost against the opposite parties and in favour of the petitioner; And Grant such further relief/reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case. O.J.C. No. 3586/95 is at the instance of M/s. Raj Exports, a partnership firm represented by its Partner Jaspal Singh against National Aluminium Co. Ltd., Assistant Collector of Customs, Kandla Port, D.C. Foreign Trade, Assistant Collector of Customs (A), Vishakapatnam and Fair Exports Private Ltd. seeking the reliefs as follows : - To admit the present writ petition and issue a RULE NISI calling upon opposite parties to show cause as to why the goods imported against the licence bearing Nos. 33902.18, 3390216 and 3390214 shall not be given duty free clearance forthwith and if opposite parties fail to show cause or show insufficient cause make the said rule absolute; And In the alternative issue an appropriate writ, order or direction to opposite party No. 1 to forthwith transfer valid transferable licence to the petitioner acceptable to opposite party Nos. 2 and 4 in lieu of the licence bearing Nos. 3390218, 3390216 and 3390244 transferred earlier; And In the alternative issue writ in the nature of mandamus and/or any other appropriate writ, order or direction commanding the opposite party No. 1 to make payment of any duty that is liable to be paid by the petitioner and/or their agents under the aforesaid licence towards the goods imported; And Order exemplary cost against the opposite party and in favour of the . petitioner; And Grant such further relief/reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.

(2.) IT is stated in details by Fair Exports Private Ltd. that it has purchased licences bearing Nos. 3390218, 3390216, 3390244, 3390214 and 3390229 from opposite party No. 1, National Aluminium Company Ltd. (hereinafter referred to 'NALCO' for the sake of brevity) in order to import caustic soda lye, duty free to the extent of Rs. 7,40,67,482. The said licences were alleged to be endorsed as transferable by opposite party No. 3, D.G., Foreign Trade, who is the licensing authority empowered under the Import Export Policy to endorse the licence. Duty -free clearance of goods against such advance licences are stated to be in the nature of export incentives granted to an exporter, instead of giving cash incentives or any other duty/excise exemption or any concessions of import duty on imported raw materials. Under the scheme of the policy such advance licence represents a benefit to an exporter which can be translated in tangible terms. In the present case licence was granted to opposite party No. 1 who in turn by selling the same and having it endorsed by opposite party No. 3 D.G., Foreign Trade, has received its value and thus availed for itself the export benefit. In the given circumstances, the remedy for any defect in the procurement of any licences and/or transfer thereof, is that the duty ought to be strictly recovered from NALCO. As far as the petitioners are concerned, they are bona fide purchaser of the said licences and have purchased the same on the representation of opposite party No. 1 (NALCO) and opposite party No. 3 (D.G., Foreign Trade) and as such, goods imported against the said licences cannot be withheld by the Custom authorities. There are allegations that the clearance of goods have been withheld purportedly on the ground that opposite party No. 1, NALCO has availed of Modvat concessions under the excise rules and thus could not transfer the said licences in terms of para 67 of the import export policy. It is placed on record that admittedly the entry of the said concessions have been reversed and duly accounted for. In the said circumstances, there is no subsisting defect in the transfer of the licences and as such, goods imported against the same ought to be cleared.

(3.) THE aforesaid writ petition is seriously opposed by opposite party No. 2, Assistant Collector of Customs, Apprising Group -VII, by filing a comprehensive affidavit. NALCO has filed its own affidavit. It is the case of the Custom authorities that M/s. Fair Exports Private Ltd., petitioner, is not the importer, nor the Department had demanded any duty from it. It is contended that M/s. Fair Exports has no locus standi to file this writ petition challenging the leviability of duty for which the liability is on the importer (Hindustan Lever Ltd.). The petitioner purchased the licence from NALCO and transferred to M/s. Indocon Finance, New Delhi on 30 -5 -1994 by receiving full and final consideration and in turn this licence was transferred to M/s. Metec Asia, Bombay, on 29 -11 -1994 by M/s. Indocon Finance, New Delhi and finally to Hindustan Lever Ltd. (the Importer) on 7 -2 -1995 by M/s. Metec Asia, Bombay. These transfers were by payment of full and final consideration and the last transferee, i.e., Hindustan Lever Ltd. is the Importer. Neither Hindustan Lever Ltd. is the petitioner nor the Hindustan Lever Ltd. has asked for any relief and as such, the petitioner has no locus standi to challenge the same. Besides, it is asserted that the petitioner having availed the benefit under the said five import licences by way of transferring the same to Hindustan Lever Ltd., and. Raj Exports Khari Baoli for consideration and the validity of the said transferred import licences having expired after six months of the dates of transfer the petitioner has no cause of action in the manner as alleged. It is contended that from the Departmental clarification issued by Nagpur Collectorate of Excise and Customs Department, published in ELT -Volume 72, NALCO came to learn that input stage credit under Rule 57A of the Central Excise Rules should not be availed in respect of 'any of the inputs' used in the manufacture of exported goods to make import licences under the said Rule eligible for transfer.