Champagne Indage Limited vs Union Of India And Ors.
2001 Latest Caselaw 1695 Del

JUDGMENT

Mukul Mudgal, J.

1. Rule.

2. Since the pleadings are complete, with the consent of the parties, the petition is taken up today for final hearing.

3. The petitioner secured a license for the manufacture of Sparkling Wine (Champagne) on 29th of July, 1985 from the Central Government, subject to certain conditions, attached to export oriented units (hereinafter referred to as 'the EOU'). By its communication dated 27th of May, 1996, the Central Government permitted the petitioner to withdraw from the 100% EOU Scheme subject to complying with certain conditions. The conditions which were required to be complied with as annexed to the letter dated 27th May, 1996 were as follows:

"STANDARD CONDITIONS GOVERNING WITHDRAWAL FROM 100% EOU SCHEME

a. Application customs and excise duties shall be paid, on the imported and indigenous capital goods, raw materials, components, consumables, spares and finished goods in stock.

b. The Penalty, imposed by the appropriate Authority under the Foreign Trade (Development and Regulation) Act, 1992 for non-fulfilment of the conditions of approval, shall be paid. In case an appeal against an order imposing penalty is pending or proceedings under the Act have not been finalised, a legal undertaking for payment of penalties, that may be imposed, would be executed with the JDG (FT) concerned.

c. In case the EOU unit wishes to continue its operations as a DTA unit, it shall obtain necessary industrial approval in accordance with the Industrial Licensing provisions, in force, and it will be required to comply with location, environmental, and other rules and regulations in force, as applicable to DTA units."

4. The plea of the learned Senior Counsel for the petition, Shri P. Chidambaram, is that in so far as Condition (a) and (b) extracted above are concerned, the petition has complied with them. He submitted that in so far as condition (a) was concerned, a sum of Rs. 18,50,359.00 accruing as per that condition has been paid and in so far as condition (b) is concerned, a legal undertaking as stipulated has been filed.

5. The dispute raised in the writ petition pertains to Condition (c). The contention of the learned counsel for respondent No.1-Union of India is that unless and until the aforesaid condition (c) is complied with, the latter of debonding cannot be issued whereas Mr. Chidambarm, the learned Senior Counsel, appearing for the petitioner submits that unless and until the letter of debonding is issued, the said condition stipulated by clause (c) cannot be complied with. He further submits that the petitioner has the option whether or not to continue its operations as a DTA unit and further conditions specified in clause (c) cannot, therefore, came into force unless and until the petitioner wishes to continue as a DTA unit and in such a situation it cannot do so unless all conditions stipulated in clause (c) are complied with.

6. Considering the rival submissions and perusing the contents of the conditions contained in the annexure to the Letter dated 27th of May, 1996 and in particular those of clause (c) extracted above, it is clear that in order to continue as a DTA unit the petitioner is required to comply with Industrial Licensing and other legal provisions in force and indeed this is the plea of the learned counsel for the petitioner. Thus the precondition of compliance of condition (c) for issuance of a final debonding order is not justified. In that view of the matter, I am satisfied that the petitioner's plea for the issuance of the final letter of debonding is justified, particularly, in view of the statement made by the learned counsel for the respondents that the Industrial Licensing and other provisions in force, if applicable, shall be fully complied with if the petitioner wishes to continue as a DTA unit. The learned counsel for the respondents has brought to my notice that Press Note No. 3 (1991 Series) dated 15th of February, 1991 which according to him is applicable and which proposition is disputed by the learned Senior Counsel for the petitioner.

7. Accordingly, the writ petition is allowed and a writ of mandamus is issued, directing the respondents to issue a final debonding letter to the petitioner in accordance with the para 2 of the Letter dated 27th May, 1996, issued by the Ministry of Industry, Government of India, respondent No. 1 herein within eight weeks from today.

8. In view of the above, the writ petition stands allowed with no orders as to costs.

9. List for reporting compliance on 15.1.2002.