SCA/12368/2000 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 12368 of 2000 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MR.JUSTICE H.B.ANTANI ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= NULUX ENGINEERS & ANOTHER Versus UNION OF INDIA & OTHERS ========================================================= Appearance : MR PARESH M DAVE for Petitioners. MR HRIDAY BUCH for Respondents. ========================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE H.B.ANTANI Date : 20/06/2008 SCA/12368/2000 2/5 JUDGMENT ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE H.B.ANTANI) The petitioner No.1, which is a partnership firm, has filed the present petition challenging Order in Original No. KDL/Dy. Commr/GR-VII/25/2000 dated 10.11.2000 passed by by Deputy Commissioner of Customs (Gr. VII), Kandla [Annexure “F”]. The petitioner Company is engaged in the business of export of engineering goods like Crankshafts, Cam-shafts, Ball/roller/thust/clutch release iron casting etc. The petitioner firm has exported eight consignments of above referred type of engineering products from Kandla Port under eight different shipping bills. The Central Government has framed an Act known as the Foreign Trade (Development & Regulation) Act, 1992. Section 9 of the said Act empowers the Director General or an officer authorised by him to grant, renew or refuse to grant or renew a licence. Sections 3 and 5 of the said Act confers power upon the central government to make provisions for development and regulation of foreign trade and in exercise of this power, the Central Government has been announcing / declaring Export-Import Police [Exim Policy] from time to time. The Central Government has declared Exim Policy for the period 1997-2002. It is submitted that in chapter 7 of the Hand Book of Procedure (Volume I), the policy contains Duty Exemption / Remission Scheme. It is further submitted that paragraph 7.32 of the policy provided for Duty Entitlement Passbook Scheme (DEPB). It is submitted that Chapter 7 of the Exim Policy deals with the DEPB Scheme. It is submitted that under SCA/12368/2000 3/5 JUDGMENT the DEPB Scheme, different credit rates are prescribed for various goods and credit for each export of the goods is to be given by the licensing authority to the exporter in accordance with the rates so prescribed. It is submitted that under the provisions of paragraph 7.43, after the licencing authority has issued the DEPB licence, the customs has to verify the details of the export as given on the DEPB with a view to ensure whether the details of the exports as given on the DEPB were as per Customs records or not. Save and except this verification before allowing the imports against DEPB, the Customs Department has no other jurisdiction in the matter. The petitioner firm exported various engineering goods under eight different shipping bills. All the exports were made from Kandla Port. All the eight shipping bills were scrutinized and finally assessed by the Customers Officer at Kandla Port. After the shipping bills were so finally assessed, the petitioner firm applied for DEPB licence before the Director General of Foreign Trade [DGFT] at Mumbai. The DGFT issued six DEPB licences as detailed in paragraph 3.11 of the petition. After the above licences were issued in favour of the petitioner firm, they were produced before the 3rd respondent herein for verification, as contemplated under paragraph 7.43 of the ITC policy. It is submitted that though the customs authorities have no jurisdiction, the customs authorities issued show cause notice to the petitioner proposing therein to deny the DEPB benefit under serial Nos. 78 and 461. The petitioner firm filed a reply to the show cause notice. A notice was also issued to the petitioner firm fixing a personal hearing in this case before the 2nd respondent. Petitioner filed an application requesting the Commissioner of Customs for SCA/12368/2000 4/5 JUDGMENT an adjournment. However, the 2nd respondent passed an Order and held that DEPB benefit of exports covered under the show cause notice was not applicable and, therefore, DEPB credit of Rs.6,23,080/- was denied. The said order is impugned in the present petition. It is submitted that the action of the 2nd respondent defeats the Exim policy and also the Government's objective to boost up exports for earning foreign exchange. Heard the learned counsel for the respective parties and as the parties are at ad-idem with the contentions raised in the petition and since question involved in the present petition is covered by the decision dated 21.12.2005 rendered by this Court, to which one of us was a party] [Coram: D.A. Mehta & H.N. Devani, JJ.] in Special Civil Applications No. 1327/01, 2380/01 and 1326/01 in the case of Economic Traders (Guj) Ltd. & Another vs. Union of India & Others, it is not necessary to enter into discussion on merits of the controversy between the parties and hence neither detailed facts nor submissions of the respective sides are required to be recorded. In view of the ratio laid down in the judgment of this Court in the case of Economic Traders (Guj) Ltd., [supra], where reliance was also placed on the judgment rendered by the Bombay High Court in the case of Pradip Polyfils Pvt. Ltd.,v/s Union of India, 2004 (173) E.L.T. 3 (Bom), the question is squarely covered and, therefore, the present petition, on this short ground, is required to be allowed. In the result, the petition is allowed. Impugned OIO SCA/12368/2000 5/5 JUDGMENT No. KDL/Dy. Commr/GR-VII/25/2000 dated 10.11.2000 is quashed and set aside. Resultantly, the petitioner is held entitled to all consequential benefits. In Civil Application No. 12365 of 2001, by order dated 04.12.2001 passed by this Court [Coram: D.M. Dharmadhikari, CJ and K.A. Puj, J] this Court directed that the petitioners be granted requisite benefit of DEPB on their furnishing bank guarantee in the sum of Rs.6,23,080/-. In compliance with the said order, the petitioner has furnished Bank Guarantee for the aforesaid amount. In view of the fact that the present petition is allowed, the said bank guarantee furnished by the petitioner is required to be released and returned to the petitioner. The respondent authorities are, therefore, directed to release the bank guarantee to the petitioner within a period of six weeks from today. Rule made absolute accordingly. There shall be no orders as to costs. [D.A.MEHTA, J.] mathew [H.B.ANTANI, J.]