Madras High Court
M/S.Tatia Intimate Exports Limited vs The Director General on 8 December, 2023
Author: D.Bharatha Chakravarthy
Bench: Sanjay V.Gangapurwala, D.Bharatha Chakravarthy
W.A.No.1471 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 08.12.2023
CORAM
THE HON'BLE MR.SANJAY V.GANGAPURWALA, CHIEF JUSTICE
AND
THE HON'BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY
W.A.No.1471 of 2023
M/s.Tatia Intimate Exports Limited,
No.81-B, 2nd Main Road,
Ambattur Industrial Estate,
Chennai-600 058
(Now known as Tatia Global Venture Limited)
rep. by its Director Bharat Jain Tatia. .. Appellant
Vs.
1.The Director General,
Directorate General of Foreign Trade,
Ministry of Commerce and Industry,
Department of Commerce,
Udyog Bhavan,
New Delhi-110 001.
2.The Foreign Trade Development Officer,
O/o Directorate General of Foreign Trade,
Ministry of Commerce and Industry,
Department of Commerce,
Udyog Bhavan,
New Delhi-110 001.
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W.A.No.1471 of 2023
3.The Foreign Trade Development Officer,
O/o The Zonal Joint Director General of Foreign Trade,
Ministry of Commerce and Industry,
Department of Commerce,
Shastri Bhavan Annex,
4th and 5th Floor, No.26, Haddows Road,
Chennai-600 006. .. Respondents
Prayer : Appeal filed under Clause 15 of the Letters Patent against the
order of the learned Single Judge dated 10.03.2023 passed in
W.P.No.13281 of 2016.
For the Appellant : Mr.B.Satish Sundar
For the Respondents : Mr.A.R.Sakthivel
CGSC
JUDGMENT
(Delivered by the Hon'ble Chief Justice)
We have heard Mr.B.Satish Sundar, learned counsel for the
appellant and Mr.A.R.Sakthivel, learned Central Government Standing
Counsel for the respondents.
2. The appellant had filed a writ petition, bearing W.P.No.13281
of 2016, challenging the order passed by the first respondent dated
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14.12.2015. Under the said order, the request of the appellant to
relax the condition of mentioning the EPCG licence number, the date of
licence and the name of EPCG licence holder on the shipping bills
which have not been submitted is rejected. The RA Chennai was
directed to initiate necessary action, including action for recovery of
duty and interest under the Foreign Trade (Development and
Regulation) Act, 1992, as amended.
3. The learned Single Judge dismissed the writ petition.
Aggrieved thereby, the present writ appeal.
4. The appellant was issued with EPCG licence for import of
machineries and capital goods for its export unit. The CIF value of
capital goods allowed to be imported is USD 5,03,800.12. The export
obligation to be fulfilled is USD 18,75,383 within five years from the
date of utilization of the licence. The actual utilization of the licence
for import cost is USD 4,68,845.67. The appellant sought for
extension of time on 25.10.1999 for fulfillment of the export
obligation. A similar request was made on 27.9.2000 and 15.10.2001
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respectively. On or about, 11.7.2002, the DGFT issued a policy
Circular No.7/2002 stipulating certain conditions. A demand notice
was issued to the appellant by the second respondent directing the
appellant to pay customs duty forgone proportionately with respect to
the utilization of the licence on account of non-fulfillment of export
obligation.
5. Learned counsel for the appellant further submits that the
appellant had undertaken third party exports. The appellant had
complied with all conditions enumerated in the Circular No.7/2002
dated 11.7.2002, however, was not in a position to comply with
condition no.(v). Learned counsel for the appellant submits that
condition no.(v) is a procedural one and not substantive condition.
The procedural condition can be relaxed.
6. According to learned counsel, the appellant had submitted all
the documents required, such as no objection certificate from the third
party for accepting the subject exports for fulfillment of EO against the
EPCG licence obtained by the licence holder and an
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affidavit/undertaking in a stamp paper duly certified by an independent
Chartered Accountant declaring that neither the licence holder nor the
third party has counted/shall count in future, the exports shown
against a particular EPCG licence towards fulfillment of EO against any
other EPCG licence. The appellant had also provided list of EPCG
licences obtained by the licence holder as well as by the third party
and also a declaration from the third party in a stamp paper duly
certified by an independent Chartered Accountant declaring that the
products exported for fulfillment of EO by them on behalf of the licence
holder as per the details given.
7. According to learned counsel, the condition that the relevant
shipping bills shall contain both the names of the third parties and the
licence holder was not complied with. The documents submitted in
compliance with condition nos. (i) to (iv) of the said circular would be
sufficient to take care of condition no. (v). This aspect has not been
considered by the learned Single Judge.
8. According to learned counsel, the non-compliance of the
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procedural condition would not be fatal to the case of the appellant.
Reliance is placed on the judgment of the Apex Court in the case of
Mangalore Chemicals and Fertilizers Limited v. Deputy Commissioner,
reported in 1991 (55) E.L.T. 437 (S.C).
9. Learned Central Government Government Standing Counsel
for the respondents submits that the appellant even could not place
on record the shipping bills. The appellant admitted that the shipping
bills did not contain the names of third parties and licence holder and
that the EPCG licence number was not mentioned. The conditions in
the circular were not complied with. No error has been committed by
the learned Single Judge while dismissing the writ petition.
10. We have considered the submissions canvassed by learned
counsel for the parties.
11. The Circular No.7/2002 dated 11.7.2002 was issued by the
Ministry of Commerce and Industry, Directorate General of Foreign
Trade, New Delhi, on the basis of the representations given from
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various exporters for condonation of procedural lapse of not
mentioning the EPCG licence number and the date on the shipping bills
relating to the exports for fulfillment of EO under EPCG scheme. A
decision was taken under para 2.5 of the EXIM policy that such
procedural lapse may be condoned in relaxation of the existing policy
provisions subject to submission/verification of the documents as
enumerated therein.
12. It is the case of the appellant that the appellant had engaged
third party exports. The conditions, in case of third party exports as
per Circular No.7/2002, read thus:
“(i) No objection certificate from the 3rd party(s) for
accepting the subject exports for fulfillment of EO
against the EPCG licence obtained by the licence
holder.
(ii) An Affidavit/undertaking in a stamp paper, duly
certified by an independent CA, declaring that neither
the licence holder nor the 3rd party(s) has counted/shall
count in future, the exports shown against a particular
EPCG licence towards fulfillment of EO against any
other EPCG licence.
(iii) List of EPCG licences obtained by the licence holder
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as well as by the 3rd party(s).
(iv) A declaration from the 3rd party(s) in a stamp
paper, duly certified by an independent CA, declaring
that the products exported for fulfillment of EO by
them on behalf of the licence holder as per details
given in the statement of exports, were manufactured
by the licence holder.
(v) This would be subject the condition that the
relevant shipping bills contain both the names of the 3rd
party(s) and the licence holder.”
13. In the present case, we need not consider the contention of
the respondents that the appellant had not fulfilled the export
obligation within the stipulated period. The same was not the ground
in denying the benefit to the appellant.
14. It is worth noting that the appellant even failed to place on
record the shipping bills. Moreover, the appellant admitted that it did
not mention the names of third parties and the licence holder on the
shipping bills. It would be difficult for the respondents to verify the
genuineness of the claim in the absence of the names of third parties
on the shipping bills so also the names of the licence holder.
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Paragraph 5.7.1 of the Hand Book of Procedures prescribes that EPCG
licence number and date shall be endorsed on the shipping bills which
are proposed to be presented towards discharge of export obligation.
The appellant did not comply with the same. Moreover, the shipping
bills were not placed before the respondents so as to enable the
respondents to verify the same. We do not find any error in the order
passed by the respondents negativing the claim of the appellant.
15. In the light of the above, the writ appeal stands dismissed.
There will be no order as to costs.
(S.V.G., CJ.) (D.B.C., J.)
08.12.2023
Index : Yes/No
Neutral Citation : Yes/No
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To
1.The Director General,
Directorate General of Foreign Trade,
Ministry of Commerce and Industry,
Department of Commerce,
Udyog Bhavan,
New Delhi-110 001.
2.The Foreign Trade Development Officer,
O/o Directorate General of Foreign Trade,
Ministry of Commerce and Industry,
Department of Commerce,
Udyog Bhavan,
New Delhi-110 001.
3.The Foreign Trade Development Officer,
O/o The Zonal Joint Director General of Foreign Trade,
Ministry of Commerce and Industry,
Department of Commerce,
Shastri Bhavan Annex,
4th and 5th Floor, No.26, Haddows Road,
Chennai-600 006.
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THE HON'BLE CHIEF JUSTICE
AND
D.BHARATHA CHAKRAVARTHY, J.
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08.12.2023
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