Ajay Industrial Corporation & ... vs Director General, Foreign Trade & ...
2009 Latest Caselaw 2661 Del

R-20
*    IN    THE    HIGH       COURT    OF    DELHI   AT   NEW      DELHI

+     W.P.(C) No. 4428/1994

      AJAY INDUSTRIAL. CORPN & ANR.           ..... Petitioners
                      Through Mr.G.L. Rawal, Sr. Advocate with
                      Ms.Parveen Rawal, advocate.

                   versus

      DIR. GENERAL, FOREIGN TRADE & ANR. ..... Respondents
                      Through Ms. Barkha Babbar, advocate.

      CORAM:
      HON'BLE MR. JUSTICE SANJIV KHANNA

                                ORDER

% 16.07.2009

1. M/s. Ajay Industrial Corporation, the petitioner exported hand-pumps to UNICEF and on the basis of the said exports was issued duty free advance licences along with Duty Exemption Entitled Certificate Books as per details given below:

S.         Lic.   No. & Date                    CLA's File Ref.
No

1. P/L/2051053 dt. 20.5.93 ADV Lic/UDES/851/AM-93/ALS1 CLA

2. P/L/2051054 dt. 20.5.93 ADV Lic/UDES/1185/AM-93/ALS1 CLA

3. P/L/2051674 dt. 06.7.93 ADV Lic/UDES/1490/AM-93/ALS1 CLA

4. P/L/2050763 dt. 14.5.93 ADV Lic/UDES/340/AM-93/ALS1 CLA

5. P/L/2051511 dt. 30.6.93 ADV Lic/UDES/294/AM-94/ALS1 CLA

6. P/L/2051545 dt. 15.7.93 ADV Lic/UDES/59/AM-94/ALS1 CLA

2. The petitioner made a request for endorsement of transferability of four licences namely, P/L/2051053 dt. 20.5.93, P/L/2051054 dt. 20.5.93, P/L/2051674 dt. 06.7.93 and P/L/2050763 dt. 14.5.93. Transferability of four licences was under para 127 of the Handbook 1992-1997. The request for transferability was examined and was found to be in order and an endorsement to the same effect was made. The said endorsements were made on 1st November, 1993, 9th September, 1993, 27th September, 1993 and 25th August, 1993 respectively.

3. Subsequently, the petitioner applied for revalidation of the licences for an extended period. The request was rejected by the respondents inter alia on the ground that "there is no such provision contained in EXIM Policy 1992-97 for revalidation of advance licences for which transferability has already been ordered."

4. Similar stand has been taken by the respondents in the counter affidavit and reliance is placed upon para 127(v) of the Handbook of Procedure 1992-97. Learned counsel for the petitioner on the other hand relies upon para 125 of the said Handbook.

5. Para 125 and 127(v) of the Handbook of Procedure 1992-97 read as under:-

"Para 125. Revalidation of licence. The regional licensing authority may consider the request on merits and grant one or more revalidations but not exceeding a period of one year from the date of expiry of the original licence. No further revalidation will normally be entertained. However, in exceptional cases the request(s) may be considered on merits by the Advance Licensing Committee. The request(s) for revalidation of licence shall be made in the form given in Appendix V within one month of the expiry of the licence.

127. (i)After export obligation has been fulfilled, export proceeds realized and the BG/LUT redeemed and subject to fulfillment of other conditions as laid down in parasgraph 67 of the Policy and Paragraph 126 of the Handbook of Procedures, the value based/quantity based licence holder may transfer:-

(a) The licence in full if no imports have been made;

(b) The licence in part excluding the quantity and valud of imports already made; and

(c) The materials or the balance thereof already imported.

(ii) x x x x x

(iii) x x x x x

(iv) x x x x x

(v) Duty free licences on the date of transfer shall be valid for the balance period of their validity of six months, whichever is more, provided no revalidation has been availed; and

(vi) x x x x x "

7. Para 125 of the Handbook of Procedure grants discretion to the Regional Licencing Authority to consider a request for revalidation on merits and one or more revalidation can be granted but the same cannot exceed period of one year from the date of expiry of the original licence. Thereafter, normally no further request for revalidation is to be entertained except in exceptional cases. The aforesaid provision does not make any difference between transferable licence and a non-transferable licence. All import licences whether endorsed as transferable or non-transferable are treated alike in para 125. A transferable or a non-transferable licence can be revalidated in terms of the said para.

8. Para 127 of the Handbook deals with transferability of licences/material quoted against the said licences. Para 127 (i) permits and grants discretion to the licence holder to transfer the licence to a third party subject to conditions mentioned in the said Para. We are not concerned with sub-paras ii, iii, iv and vi in the present case. Sub-para v prescribes and fixes the validity period in case a licence is transferred. It stipulates that a duty free license on the date of transfer shall be valid for period of their validity or six months, whichever is longer. Thus when a duty free licence is transferred, the validity of that licence is the balance period mentioned in the licence or six months, whichever is more. The words „date of transfer‟ in sub-para v is the „date of transfer‟ by the original holder of the licence to a third party. Sub para (v) fixes and prescribes the validity period on the basis of date of transfer of the duty free licence to a third party. On transfer a duty free licence in the hands of the third party is valid for the balance period mentioned in the licence or six months from the date of transfer, whichever is later. It further provides that in such cases no revalidation should have been availed of. In other words, where revalidation has been availed of benefit of six months will not be applicable. The benefit of extended validity of six months will not be applicable. Revalidated licences will be confined to the period mentioned in the licence itself. In view of the aforesaid position, the stand of the respondents that para 125 of the Handbook of Procedure is not applicable in view of para 127(v) of the Handbook of Procedure 1992-97 is incorrect.

9. Accordingly, the impugned orders are quashed and set aside. The matter is remanded back to the respondents to consider the request of the petitioner for revalidation of the licence in terms of para 125 of the Handbook of Procedure. Fresh orders will be passed within three months from the day copy of this order is received in the office of the respondents. Before deciding the question of revalidation notice will be given to the petitioner to make his submissions. It is clarified that the Court has not expressed any opinion whether request for extension is justified and has merit. The Writ Petition is accordingly disposed of. No costs.

SANJIV KHANNA, J.

JULY 16, 2009.

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