CWP No.5995 of 2008 1 In the High Court for the States of Punjab and Haryana at Chandigarh … CWP No.5995 of 2008 Date of decision: 9.4.2008 M/s Tara Feed Limited Petitioner Versus Union of India and others Respondents Coram: Hon’ble Mr.Justice Satish Kumar Mittal Hon'ble Mr.Justice Rakesh Kumar Garg Present: Mr.Jagmohan Bansal,Advocate for the petitioner. .. Rakesh Kumar Garg,J The petitioner is a public limited company having its office at Ludhiana and factory premises at Jitwal Kalan. The petitioner has installed a refinery for refining of crude edible oil into finished edible oil. The petitioner is also registered under Vegetable Oil Products (Regulation)Order, 1998 with the Directorate of Vanaspati, Vegetable Oils and Fats for manufacturing of refined vegetable oils with annual installed capacity of 23,040 Metric Tonnes. The import and Export is governed and controlled by Foreign Trade(Development & Regulation) Act, 1992. The Central Government in terms of provisions of Section 3 of the Act has power to make provisions relating to import and export. The Government has power to prohibit, CWP No.5995 of 2008 2 restrict or regulate the import or export of any goods. The Government under Section 5 of the Act has also power to issue policy to achieve the objectives of the said Act. Sections 3 and 5 of the Act are reproduced as under:- “Section 3. Power to make provisions relating to imports and exports:- (1) The Central Government may, by Order published in the official Gazette, make provision for the development and regulation and foreign trade by facilitating imports and increasing exports. (2) The Central Government may also, by Order published in the official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the import or export of goods. (3) All goods to which any Order under sub section (2) applies shall be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly. Section 5. Export and Import Policy: The Central Government may from time to time, formulate and announce by notification in the Official Gazette, the export and import policy and may also, in CWP No.5995 of 2008 3 like manner, amend that policy.” In terms of the provisions of Foreign Trade Policy import and export of all goods have been classified into three categories,i.e., free, restricted and prohibited. The prohibited goods cannot be imported at all, however, restricted goods can be imported and exported subject to compliance of restriction. Any body on payment of duty, if leviable can import freely importable goods. With the intention to promote export, Government has declared different incentive schemes under Custom Act and Foreign Trade Policy Advance authorization is one of the policies declared under Foreign Trade Policy and duty drawback is under the Customs Act, 1962. As per advance authorization, goods can be imported without payment of duty and as per drawback scheme, refund of duties paid at the time of import is granted to the exporter. Section 75 of the Customs Act, 1962 dealing with drawback is reproduced as under:- “Drawback on imported materials used in the manufacture of goods which are exported. Section 75- (1) Where it appears to the Central Government that in respect of goods of any class or description, (manufactured or processed or on which any operation has been carried out in India)(being goods which have been entered for export and in respect of which an order permitting the clearance and loading thereof for CWP No.5995 of 2008 4 exportation has been made under section 51 by the proper officer,) (or being goods entered for export by post under Section 82 and in respect of which an order permitting clearance for exportation has been made by the proper officer), a drawback should be allowed of duties of customs chargeable under this act on any imported materials of a class or description used in the (manufacture or processing of such goods or carrying out any operation on such goods), the Central Government, may, by notification in the Official Gazette, direct that drawback shall be allowed in respect of such goods in accordance with, and subject to the rules made under sub-section (2). Provided that no drawback shall be allowed under this sub-section in respect of any of the aforesaid goods which the Central Government may, by rules made under sub-section (2), specify, if the export value of such goods or class of goods is less than the value of the imported materials used in the manufacture or processing of such goods or carrying out any operation on such goods or class of goods, or is not more than such percentage of the value of the imported materials used in the manufacture or processing of such goods or carrying out any operation on such goods or class of goods as the Central Government may, by notification in CWP No.5995 of 2008 5 the Official Gazette, specify in this behalf: Provided further that where any drawback has been allowed on any goods under this sub section and the sale proceeds in respect of such goods are not received by or on behalf of the exporter in India within the time allowed under the Foreign Exchange Management Act, 1999(42 of 1999), such drawback shall be deemed never to have been allowed and the Central Government may, by rules made under sub section (2), specify the procedure for the recovery or adjustment of the amount of such drawback. (1A) Where it appears to the Central Government that the quantity of a particular material imported into India is more than the total quantity of like material that has been used in the goods manufactured, processed or on which any operation has been carried out in India and exported outside India, then, the Central Government may, by notification in the Official Gazette, declare that so much of the material as is contained in the goods exported shall, for the purpose of sub section (1), be deemed to be imported material. (2) The Central Government may make rules for the purpose of carrying out the provisions of sub section(1) and, in particular, such rules may provide- (a) for the payment of drawback equal to the amount of CWP No.5995 of 2008 6 duty actually paid on the imported materials used in the manufacture or processing of the goods or carrying out any operation on the goods or as is specified in the rules as the average amount of duty paid on the materials of that class or description used in the manufacture or processing of export goods or carrying out any operation on export goods of that class or description either by manufacturers generally or by persons processing or carrying on any operation generally or by any particular manufacturer or particular person carrying on any process or other operation, and interest if any payable thereon; (aa) for specifying the goods in respect of whichno drawback shall be allowed; (ab) for specifying the procedure for recovery or adjustment of the amount of any drawback which had been allowed under sub section (1) or interest chargeable thereon; (b) for the production of such certificates, documents and other evidence in support of each claim of drawback as may be necessary; © for requiring the manufacturer or the person carrying on any process or other operation to give access to every part of his manufactory to any officer of customs specially authorized in this behalf by the Assistant CWP No.5995 of 2008 7 Commissioner of Customs or Deputy Commissioner of Customs to enable such authorized officer to inspect the processes of manufacture, process or any other operation carried out and to verify by actual check or otherwise the statements made in support of the claim for drawback. (d) for the manner and the time within which the claim for payment of drawback may be filed; (3) The power to make rules conferred by sub section (2) shall include the power to give drawback with retrospective effect from a date not earlier than the date of changes in the rates of duty on inputs used in the export goods.” The rate of duty and value of goods is determined for the purpose of levy of Customs duty in terms of Section 15 of the Customs Act, 1962, which is reproduced as under:- Section 15: Date for determination of rate of duty and tariff valuation of imported goods: (1) The rate of duty and tariff valuation, if any applicable to any imported goods, shall be the rate and valuation in force,- “(a) In the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such goods is presented under that section; CWP No.5995 of 2008 8 (b) In the case of goods cleared from a warehouse under Section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section; (c) In the case of any other goods, on the date of payment of duty; Provided that if a bill of entry has been presented before the date of entry inwards of the vessel or the arrival of the aircraft by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be; (2) The provisions of this section shall not apply to baggage and goods imported by post.” As per the averments made in the writ petition, the petitioner wanted to export his refined oil and import crude oil against advance authorization scheme of Foreign Trade Policy. As per Advance authorization Scheme, raw material can be imported without payment of duty with a condition to export the finished goods. As per the averments in the writ petition, the petitioner applied for advance authorization, however, respondent No.3 insisted the petitioner to bring permission to export the refined oil from the Directorate of Vanaspati. It is further the case of the petitioner that he got an export order on 12.2.2008 and on the basis of said order on CWP No.5995 of 2008 9 15.2.2008 applied to the Directorate of Vanaspati for permission to import and re-export 150 MT refined pomace olive oil and the said Directorate vide its letter dated 20.2.2008 issued “No Due Certificate” to the petitioner to import crude pomace olive oil with the condition to export 150 MT refined pomace olive oil vide Annexure P-3. It is further the case of the petitioner that on the basis of “No Due Certificate” issued by the Directorate of Vanaspati, the petitioner placed a purchased order with a company from Italy for the supply of 219.232 MT, crude kernel olive oil. The petitioner filled bill of entry in EDI system on 14.3.2008 through a Custom House Agent. The Customs Officers physically examined the material and drawn the required samples. According to the petitioner, the value of the material lying at the port is more than 1.5 crores and the respondent has assessed duty about Rs.79 lacs and it is also subject to container detention and demurrage charges amounting to Rs.20,000/- per day. As per the grievance of the petitioner, the respondent- department has issued a notification No.85(RE-2007)/2004-09 dated 17.3.2008, whereby a ban has been imposed for one year from the date of the notification not permitting the export of edible oil. It is also the case of the petitioner that on 1.4.2008, respondent No.1 had issued notification No.42/2008-Customs dated 1.4.2008 and as per notification all goods, crude and edible grade oil falling under chapter 15 of Schedule 1 of the Act are either fully or partially exempted from custom duty. Thus, according to the petitioner, the action of the CWP No.5995 of 2008 10 respondents by issuing these notifications amounts to infringing the fundamental rights of the petitioner of carrying business and trade as enshrined under Article 19(1)(g)of the Constitution of India, as the export of refined oil has been banned and the raw material has been exempted from duty. However, respondent No.2 is not ready to permit the clearance of crude oil without payment of duty and since as per the notification dated 17.3.2008, the petitioner cannot export refined oil, therefore, he is bound to suffer irreparable heavy loss and cannot survive. Thus, the petitioner has prayed either to allow him to clear crude olive oil without payment of duty or export refined oil under drawback scheme. We have heard Shri Jagmohan Bansal, Advocate, learned counsel for the petitioner, and find no force in the contentions raised by him. From the perusal of the averments made in the writ petition, it is crystal clear that under the provisions of the Act, the Government is competent to issue the notifications dated 17.3.2008 and 1.4.2008. It is further clear that these notifications have been admittedly issued to check the increase in prices of oil in India. The only objection raised by the petitioner in the writ petition is that he was given No Objection Certificate for refining imported crude oil for the purpose of re-exporting 150 MT refined pomace olive oil from the Directorate of Vanaspati, Vegetable Oils & Fats. On the basis of this No Due Certificate, he placed an order to import the crude oil which is lying at the Ludhiana Port and for which he has filled a bill of entry on 14.3.2008 and in case the said import is not CWP No.5995 of 2008 11 allowed without payment of duty or he is not allowed to export the refined pomace olive oil, he will suffer heavy loss. The contention raised by the counsel for the petitioner is without any force. It is clear from the certificate Annexure P-3 that the Directorate of Vanaspati, Vegetable Oils & Fats had given No Objection Certificate to the petitioner for refining the imported crude oil for the purpose of re- export subject to compliance of formalities by the petitioner under any Central Government Regulations/Act/Order etc. Therefore, it cannot be said that the petitioner had changed his position to his detriment on the principle of promissory estoppel. Even otherwise, there cannot be any estoppel against law. The petitioner cannot be given the benefit of exemption from payment of custom duty for import of the crude oil in terms of exemption Notification No.42/2008- Cus dated 1.4.2008, as the said policy has come into existence with effect from 1.4.2008, whereas the petitioner has also filled his bill of entry for import of the goods with the respondents authorities on 14.3.2008. Therefore, no benefit of the said notification which was not in existence on the date the bill of entry was filled by the petitioner can be given to him. Similarly, there is no ground to quash the notification No.85 dated 17.3.2008 whereby a ban has been imposed for export of edible oil as the authority of the respondent has not been challenged by the petitioner on any ground to issue such notification. Even otherwise, the writ petition lacks material facts as the petitioner has not placed on record the alleged bill of entry filled by him in EDI system importing the crude oil. The petitioner has CWP No.5995 of 2008 12 averred in the writ petition that the value of the material is more than 1.5 crores and the respondents have assessed duty of about 79 lacs. However, no such assessment order has been placed on record of the case. The petitioner has also averred in the writ petition that he wanted to import crude oil against advance authorization scheme of Foreign Trade Policy relating to export of refined oil under duty drawback scheme. However, no such application filed by the petitioner for advance authorization has been placed on record of the case. Thus, in view of this non-availability of material facts on record of the writ petition, it cannot be made out that the petitioner shall suffer any irreparable loss or injury, which amounts to infringement of his fundamental right of carrying on free trade and business under Article 19(1)(g) of the Constitution of India. It is also relevant to mention that under Section 15 of the Customs Act, 1962, the relevant date for determination of rate of duty and tariff valuation of imported goods is the date of bill of entry and in case if a bill has been presented before the date of entry inwards of the vessels or the arrival of the aircraft by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival as the case may be. In this case the petitioner has conveniently not mentioned the date of such entry inwards or the arrival of his goods. Thus, the petitioner is guilty of withholding material facts from the knowledge of this Court and therefore, is not entitled to invoke the extra ordinary writ jurisdiction of this Court under Article 226/227 of the Constitution of India. CWP No.5995 of 2008 13 Thus, finding no merit in the writ petition, the same is dismissed in limine. (RAKESH KUMAR GARG) JUDGE April 9,2008 (SATISH KUMAR MITTAL) nk JUDGE