JUDGMENT
B.C. Patel, J.
1. Special Civil Application No. 3282 of 1999 is preferred by Adani Exports Ltd., a company incorporated under the Companies Act, 1956, which is engaged in the business of Frozen Shrimps and is also exporting Shrimps. In view of the EXIM Policy, the Company is recognized as a “Super Star Trading House” in the State of Gujarat. The Government of India announced Export Import Policy for the period from April 1992 to March 1997 (hereinafter referred to as the Policy) wherein a Scheme known as “Pass Book Scheme” was introduced with a view to grant benefits to real exporters. The respondents took a decision later on not to extend the benefit as mentioned in the Policy as regards Duty Exemption Scheme and restricted the benefits with regard to allowable quantity of vitamin mixes and, therefore, the petition has been filed. Similarly, Inter Continental India, engaged in the same business as referred to hereinabove, the benefits were similarly restricted and hence it has also filed the petition. The facts in both the petitions are common and, therefore, both the petitions are disposed of by a common judgment.
2. From the petition it appears that the initial dispute raised by the Customs Department was with regard to rate of credit and not the allowable quantity against the export. Petitioners were claiming credit at the rate of USD 36/- per kg for Vitamin Mixes while Revenue was of the view that the credit to be given for Vitamin Mixes in any case cannot exceed USD 8/- per kg. In view of the order passed by the Revenue entitling the petitioner at the rate of USD 8/- per kg for Vitamin Mixes, appeal was preferred before the Commissioner of Customs (Appeal), who by order dated 15-4-1998 allowed the appeal and accepted the contention of the petitioners claiming USD 36/- per kg. for Vitamin Mixes. Revenue carried the matter before the Customs, Excise, Gold (Control) Appellate Tribunal (for short Tribunal) but failed to get the relief. The appeal of the Department was rejected. Even before the Tribunal, an application was filed for stay of the order of the appellate officer. On 23-9-1999, vide an interim order, credit was given to the petitioners as per scheme i.e. 227 kgs. of Vitamin Mixes against export of 1 MT Frozen Headon/Headless Shrimps. The credit was given at the higher rate as claimed by the petitioners subject to furnishing Bank Guarantee of 10% of the value and Bond for the full value of the credit amount. The petitioners were given credit in the pass book at USD 36/- per kg. of Vitamin mixes on the basis of 227 kgs. of Vitamin Mixes against export of 1 MT Frozen Headon/Headless Shrimps. After final decision of the Tribunal, petitioners approached the respondents for giving credit for all the exports made. However, respondents have denied the benefit on the ground that against the export of 1 MT of Headon/Headless shrimps, only 0.027 kgs Vitamin Mixes is allowable and not 227 kgs. even for period prior to 1-4-1997. The date 1-4-1997 is required to be kept in mind as there is change thereafter in the schedule to the duty exemption scheme with regard to quantity allowable against export of Headon/Headless shrimps.
3. Reading the preface to the revised edition of policy, it appears that the Export Import Policy has provided stability within a dynamic framework enabling periodic harmonisation of national priorities with global changes. With the long term Exim Policy providing a stable policy matrix, the annual reviews take into account the advances made in restructuring the economy and the consequent changes that are possible and desirable towards the objective of trade liberalisation. As mentioned in Para 4 of the Preface, a new Pass Book Scheme was introduced. Para 4 reads as under :
“4. The procedural difficulties faced by value based Advance Licence holders with reference to Modvat will be minimised by enabling such licence holders to claim Modvat or Drawback, as the case may be, in most cases. The new Pass Book scheme will allow certain categories of exporters to avail of all the facilities of a value based Advance Licence with greater flexibility and without actually going through all the procedural formalities of obtaining a licence. The Pass Book will be issued by the officers designated by the Director General of Foreign Trade who will sit in the Customs Houses at Calcutta, Delhi, Bombay and Madras to ensure prompt service to the exporters through close interaction with the Customs authorities.”
4. It is necessary to refer to certain other paragraphs of the Policy. Chapter VII refers to Duty Exemption Scheme. Clause 47 of the said chapter refers to uses of inputs for production of export goods. Clause 54 refers to Pass Book Scheme, the relevant portion of which reads as under :
“54. Upon the export of goods by a Pass Book holder, the designated authority shall calculate, on the basis of the standard input/output norms, the import content of the said exports and determine the basic customs duty payable on such imports. He shall credit the said amount in the Pass Book. Upon imports being made by the Pass Book holder, the credits may be utilised to pay the basic and additional customs duties on the imported goods. Payment shall be by a debit entry to be made in the Pass Book by the designated authority. The export goods shall not be eligible for drawback on the inputs for which credit in the Pass Book is taken. The import and export shall be made through the same port. Any goods which are not included in the Negative List of imports or in the list of Sensitive Items may be imported under this scheme. The Pass Book shall be valid for a period of two years from the date of issue and may be renewed from time to time.”
5. So far as Duty Exemption Scheme is concerned, the relevant paragraph No. 114 is reproduced hereunder :
“114. An application may be made by a Super Star Trading House, Star Trading House, Trading House or Export House and manufacturer exporter in Appendix XVII-A to the Designated Authority attached to the Custom House at Bombay, Calcutta, Delhi and Madras. The Designated Authority will issue a pass-book to such exporter in Appendix XVII-C. As and when export is made, the ex-porter will file a declaration along with Export Promotion copy of the Shipping Bill in Appendix XVII-B to the Designated Authority along with the relevant documents. The Pass Book holder should specify in the export documents including the shipping bill that the export is under the Pass Book Scheme in terms of Paragraph 54 of the Policy. Based on the standard input output and value addition norms (referred to in Paragraphs 51 and 60 of the Policy), the Designated Authority will determine the basic customs duty deemed to have been paid by such an exporter and the said amount will be credited in the Pass Book. The exporter can utilise the credit so given for import of permissible items.”
6. Our attention was drawn by the learned counsel appearing for the respondents that declarations were required to be filed, two in numbers, which are at Appendix XVII-A and XVII-B. Clause 1 of declaration at Appendix XVII-B reads as under :
“1. I/We hereby declare that all the details furnished in the Pass Book against the above exports including the technical characteristics of the inputs which have gone into the exported product are true and correct to the best of my/our knowledge and the CIF value given against the items of import are prevailing international values.”
7. The format of Pass Book is found at Appendix XVII-C. It is in four parts, namely, A, B, C & D. Part-A refers to details of exports made; Part-B refers to inputs used in the exported product as per I-O Norms (to arrive at the basic duty). Part-C refers to imports/debits to be made and Part-D refers to credit/debit/balance of duty. The Pass Book is to be certified by the Designated Authority. Later on, looking to the need of the day, in Chapter VII. Clause 54 was amended by inserting the word “deemed” which is found at two places. The relevant Clause 54 as amended reads as under :
“Upon the export of goods by a Pass Book holder, the designated authority shall calculate, on the basis of the standard input/output norms, including packing material as provided in General Note for packing Material in the Handbook of Procedures (Vol. 2), the deemed import content of the said exports and determine the basic customs duty payable on such deemed imports. He shall credit the said amount in the Pass Book. Upon imports being made by the Pass Book holder, the credits may be utilised to pay the basic customs duty on the imported goods. Payment shall be by a debit entry to be made in the Pass Book by the designated authority. In respect of additional customs duty, the Pass Book Holder will have an option to pay the same either by debit entry to be made in the Pass Book or in cash. The export goods shall not be eligible for drawback on the inputs for which credit in the Pass Book is taken. The import and export shall be made through the same port. Any goods which are not included in the Negative List of imports may be imported under this scheme. Besides, credit available under the Pass Book may also be utilised to pay customs duty while importing goods permitted against freely transferable Special Import Licences. The Pass Book shall be valid for a period of two years from the date of issue and may be renewed from time to time.”
8. Similarly, clause 114 has also been amended. That reads as under :
“114. An application may be made by a Super Star Trading House, Star Trading House, Trading House or Export House and manufacturer exporter in Appendix XVII-A to the Designated Authority attached to the Custom House at Bombay, Calcutta, Delhi and Madras. The Designated Authority will issue a pass-book to such exporter in Appendix XVII-C. As and when export is made, the ex-porter will file a declaration along with Export Promotion copy of the Shipping Bill in Appendix XVII-B to the Designated Authority along with the relevant documents. The Pass Book holder should specify in the export documents including the shipping bill that the export is under the Pass Book Scheme in terms of Paragraph 54 of the Policy. Based on the standard input output and value addition norms (referred to in Paragraphs 51 and 60 of the Policy), the Designated Authority will determine the basic customs duty deemed to have been paid by such an exporter and the said amount will be credited in the Pass Book. The exporter can utilise the credit so given for import of permissible items.”
9. Thus, in view of this Scheme, it is contended by the petitioners that the moment there is an export, the exporter is entitled to get the benefit, if he has chosen to accept the Scheme known as Pass Book Scheme.
10. The Designated Authority has to calculate the amount to be credited on the basis of the standard input/output norms and it is the duty of that authority to determine the basic customs duty payable on such imports. In view of the amendment, the Designated Authority has to calculate, as stated earlier, on the basis of the standard input/output norms including packing material. The deemed import content of the said export has to be taken into consideration and on that basis, the authority has to determine the amount to be credited in the pass book. In a given case, it may happen that the person exporting may not have used the imported material as it happens in the case of Advance Licence. But, in view of the Scheme, the moment there is an export, in view of the deeming clause, the party is required to be given the benefits, whether the material used was imported or not.
11. Fish products are found in the Duty Exemption Scheme at pages 675 & 676 of the Policy. So far as the present cases are concerned, export items shown at serial No. 7 are the items required to be considered, against which the import
items as well as quantity allowed are also mentioned. It reads as under :
Export Item Import Item Qnty Name
Qnty Name Allowed
---- ---- ---- --------
Frozen Headon/ 1 MT Prawn Feed Headless compri- sing of :
Shrimps a) Fish Meal)
b) Shrimp Shell)
Meal) 1.65 MT
c) Soya Meal) (cumulative)
d) Fish Oils/) 1.20 MT
Oil Mixes) (cumulative)
e) Fish Solubles/)
liquid fish) (None of
meal) these items
f) Squid Liver) should
Powder) exceed 0.25
g) Squid Liver) MT)
Oil)
h) Wheat Gluton)
i) Lecithin (Soya)
Bean))
j) Vitamin Mixes)
consisting of
Vitamin C,)
Vitamin E,) 0.227 MT
Vitamin A/AD3,)
Vitamin B1 HCL)
B1, Mono)
Nitrate)
Vitamin B2/B6)
k) Mineral Mixes)
12. If 1 MT of Frozen Headon/Headless Shrimps are exported, then in that case, Prawn Feed comprising of items (a) to (k) would be attracted. However, so far as items (a), (b) & (c) referred to above are concerned, it is bracketed in one against which it is stated ‘1.65 MT (cumulative)’. Items (d) to (i) are bracketed against which quantity allowed is mentioned as ‘1.20 MT (cumulative)’. However, it is specifically mentioned that none of these items should exceed 0.25 MT. So far as the items (j) & (k) are concerned, they are bracketed in a third group against which quantity allowed is mentioned as ‘0.227 MT’. In view of these three groups of bracketed items, it is suggested that so far as the items at (a) to (c) are concerned, import of all the three items upto 1.65 MT in cumulative is permitted. So far as the items (d) to (i) are concerned, it is suggested that the quantity allowed to be imported is 1.20 MT in cumulative. Thus, it can be imported totalling to 1.20 MT. However, individually, none of these items can exceed 0.25 MT. So far as the items at (j) & (k) are concerned, namely, Vitamin Mixes and Mineral Mixes, it is suggested by the learned counsel for the petitioners that they are entitled to import either 0.227 MT of Vitamin Mixes or 0.227 MT of Mineral Mixes, or both but total should not exceed 0.227 MT. Items at (j) & (k) are to be read independently and not necessarily in combination with each other. Learned counsel submitted that this allowable quantity is to be considered for credit.
13. As against this, it is submitted by the learned counsel for the respondents that, in view of the declaration and the policy, which is required to be read as a whole, it is not open for a party to claim as a matter of right to import material as mentioned in items (j) or (k). It is contended that in view of the Policy, a party will have to satisfy the actual use of input. The preface to the Handbook of Procedures Vol. 2 for the duty exemption scheme for the period 1-4-1992 to 31-3-1997 (incorporating amendments made upto 31-3-1995) is required to be seen as stated the learned counsel for the Union of India. Clause 4 of the said preface reads as under :
“4. To make this publication more user friendly, general explanatory notes have been incorporated at the beginning of each chapter. These notes explain the governing conditions, if any, placed on the norms. For uniform interpretation and application of the norms by the different Port Officers a new chapter entitled ‘General Conditions’ has been introduced. I am confident that these explanatory notes will bring about greater transparency of the interpretation of these norms.”
14. In view of this, it is submitted that there are general conditions and there are general explanatory notes. One should not forget, as submitted by the learned counsel for the Union of India, that there are general conditions for all explanations as mentioned in the aforesaid Hand Book. Clause (1) thereof reads as under :
“1. The norms have been published in this book with a view to facilitate determination of the proportion of various inputs used/required in the manufacture of different resultant products. In many cases, the resultant products and the inputs required have been described only in generic terms. The applicants shall, therefore, ensure that the relevant technical characteristics, grades, quality and specifications are indicated both for export products and the items sought for import appropriately in the applications for the grant of a duty free licence. These details shall also be indicated both in the duty free licence and the DEEC in accordance with the relevant provisions of the Export and Import Policy, Hand-book of Procedures, Volume 1 and relevant instructions issued from time to time.”
15. In view of the aforesaid clause, it is submitted before us that the norms have been published with a view to facilitate determination of the proportion of various inputs used/required in the manufacture of different resultant products. According to the learned counsel for the respondents, it was for the applicants to place relevant material before the authority to show that actual material was used and if the authority is satisfied with respect to the actual use of such input, then, for the particular product, the exporter would be entitled to get the benefit of the Scheme and not otherwise.
16. In Paragraph 7 of the petition the petitioner has averred that :-
During the pendency of the matter before the Commissioner (Appeals), credit was granted by the Respondents at the rate of 227 kgs. for every one metric tonne of export, but on the lower value”.
17. There were 117 shipping bills in one matter. In Spl. C.A. No. 3279/99, Deputy Director General of Foreign Trade, in his sworn testimony, in Paragraph 6, has stated as under :-
“…….. I say that it is admitted that Standard Input Output Norms for export of 1 MTs of Frozen Headon/Headless Shrimps incorporating amendments made upto 25th March 1996, besides other inputs, allowed import of a quantity of 0.227 MT of Vitamin Mixes and Mineral Mixes subject to the condition stipulated below the said norm.”
18. It is further stated in the same paragraph of the affidavit that :-
“It needs to be pointed out that 0.227 MT./MT of export product was the combined quantity allowed for Vitamin Mixes and Mineral Mixes. However, taking advantage of this group of quantities, some of the exporters/importers started claiming the duty free import/pass book credit benefit for the entire quantity of Vitamin Mixes. In order to prevent such practice the standard input output norms were subsequently revised/rectified w.e.f. 1-4-1997 allowing 0.027 MTs of Vitamin Mixes consisting of various Vitamins and 0.200 MTs of Mineral Mixes subject to conditions imposed on the note below the revised norm.
19. In Paragraph 9 of the affidavit, the Deputy Director General of Foreign Trade has stated as under :-
“…… I say that the averments made in this para need no comments as they pertain to customs department. It is further submitted that in the similar case of Advance Licences, the customs authorities were advised not to allow clearance of Vitamin Mixes beyond a quantity of 0.027 MT/MT of export to prevent some exporters claiming/importing only vitamin mixes for the entire quantity of 0.227 MT/MT without claiming or importing the Mineral Mixes.”
20. It is further stated in the same paragraph that :-
“….. It is most respectfully stated and submitted that taking note of the above fact, with effect from 1-4-1997, the quantify of 0.227 MT/MT as referred to above was bifurcated into two parts, viz. Vitamin Mixes 0,027 MT/MT and Mineral Mixes 0.200 MT/MT and the customs authorities were advised not to allow clearance of Vitamin Mixes beyond a quantity of 0.027 MT/MT of export vide instructions referred to above. The bifurcation of inputs as above would equally applicable for credits being allowed under Pass Book Scheme also.”
21. Learned counsel for the petitioner, on the other hand, on the basis of these very averments made in the affidavit as quoted above submitted that the respondents have committed grave error in accepting the procedure applicable to advance licence to the case of pass book. The method and manner and utilisation of advance licence on the one hand and pass book system on the other hand being quite different, the respondents have erred in applying the procedure in case of advance licence to the pass book system. It is further pointed out that the change has been brought into force only with effect from 1-4-1997. The deponent aforesaid, namely : Deputy Director General of Foreign Trade has stated on oath that at the relevant time mineral mixes carried no customs duty, and, therefore, the exporters were claiming entire quantity of 227 kgs of vitamin mixes only. It was known to the authority at the relevant time that mineral mixes carries no customs duty, and yet it was added in the list of goods importable against export of product, namely : shrimps, and looking to the three categories which we have indicated earlier, it cannot be said that in the absence of specific provisions, the petitioners were not allowed to import 0.227 MT/MT of vitamins only. Wherever it was necessary in the Rules, authority has specifically restricted or allowed another combination. At the cost of repetition, we may mention here that against the import of 1 MT frozen headon/headless shrimps, it was open for an exporter to import fish meal and shrimp shell meal and soya meal – all the three together, 1.65 MT (cumulative). As for items at (d) to (i) as mentioned in the handbook, it was open for the exporter to import total 1.20 MT (cumulative) but the same is with a condition that “none of these items should exceed 0.25 MT”. However, so far as item (j) i.e. Vitamin Mixes consisting of Vitamin C, Vitamin E, Vitamin A/ADs. Vitamin B-1, HCL/B-1 Mono Nitrate Vitamin B2/B6 is concerned, the quantity mentioned is 0.227 MT per 1 MT export of Frozen Headon/Headless Shrimps, without any stipulations such as ‘cumulative’ or ‘not exceeding’ as is seen in the other cases. It therefore clearly appears that it was left to the choice of the exporter, to import the items in the quantity which he chooses, subject to limitation of quantity mentioned above.
22. Learned counsel for the petitioner drew our attention to Page 61, which is a letter dated 25th May 1998, addressed by Additional Director General of Foreign Trade to all Commissioners of Customs and all Regional Licencing authorities. Reading the letter it becomes clear that the instructions were issued with regard to advance licenses based on pre-revised norms. Our attention was drawn to letter dated 21-1-1999 issued by Government of India, Ministry of Commerce to all Customs Authorities and Licencing Authorities drawing their attention that against the export of 1 MT of frozen Headon/Headless Shrimps, one of the inputs permitted for import was “vitamin Mixes/Mineral Mixes” to the extent of 0.227 MT/MT individually or collectively. Reports were received that some ex-porters were claiming/importing only “Vitamin Mixes” for the entire permissible quantity of 0.227 MT/MT without claiming/importing the “Mineral Mixes”. It is further specifically stated in the said letter that “taking note of this fact, with effect from 1-4-97, the quantity of 0.227 MT/MT as referred to above was bifurcated into two parts, namely, (i), Vitamin Mixes = 0.027 MT/MT and (ii), Mineral Mixes = 0,200 MT/MT”. Thus, it is very clear that the bifurcation has taken place only w.e.f. 1-4-1997. While writing this letter, Joint Director General of Foreign Trade has specifically stated that “all the Licencing Authorities are hereby advised that while considering the requests of revalidation of such advance licences issued prior to 1-4-1997, the consolidated quantity of Vitamin Mixes/Mineral Mixes of 0.227 MT/MT should be bifurcated into two parts, namely, (i). Vitamin Mixes = 0.027 MT/MT and (ii). Mineral Mixes = 0.200 Mt/MT”. At page 64 of the compilation, copy of letter dated 15-12-1998 addressed by Joint Director General of Foreign Trade to Additional Director General of Foreign Trade is produced on record. It is very interesting to note that in the letter dated 15-12-1998, a query is raised by the Joint Director General of Foreign Trade as under :
“May I also draw your attention to your recent instructions under which revalidation of advance licences for marine products did not meet with approval, in order to prevent import of such mixes under old norms. It is felt that since the Pass Book is only an extension of the advance licencing scheme, the same uniform approach needs to be adopted.
Therefore it is not clear to us whether when applicants approach us for extra credit for vitamin mixes it should be allowed to full extent of 227 kgs./MT which was the practice before, or restricted to 27 kgs. for vitamins and 200 kgs. for mineral mixes as per norms issued on 1-4-97.”
23. On 12-5-1999, Foreign Trade Development Officer for Director General of Foreign Trade addressed a letter to Joint Director General of Foreign Trade, copy of which is produced before us at page 63 of this compilation. It is pointed out therein that the matter has been examined in detail and it has been decided that in all the cases where exporters approach for extra credit for Vitamin Mixes etc. the same shall be granted as per revised/corrected Input-Output Norms, i.e. Credit shall be restricted to 27 kgs. for Vitamin Mixes and not to the extent of 227 kgs./MT for Vitamin Mixes.
24. Learned counsel for the Government of India drew our attention to the EXIM Policy changed subsequently (April 1997 – March 2002) wherein it has been clarified at item D3 that against export of 1 MT Frozen Headon/Headless Shrimps, 0.027 MT of Vitamin Mixes of various types (item ‘J’) and 0.200 MT of Mineral mixes (item “k”) would be allowed to be imported. Thus, it is very clear that subsequently, the Government has decided to bifurcate the allowable quantity of importable goods. It is also clear that earlier, that was not the case and it was left to the choice of importer, as the quantity of 0.227 MT/MT was mentioned against both these items together, without any stipulations.
25. Learned counsel for the Government of India drew our attention to Customs Notification No. 104/95 dated 30th May 1995, which reads as under :
“In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods imported into India from the whole of the duty of Customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act, subject to the following conditions, namely :-
(1) That the importer has been issued a Pass Book by the designated authority under Paragraph 54 of the Export and Import Policy (hereinafter referred to as the said Pass Book).
(2) The importer has been permitted credit entries of the amounts equal to basic/customs duties on the inputs used in the products exported by the importer as verified by an Assistant Commissioner of Customs :
Provided that credit shall not be allowed by the designated authority in respect of goods exported under a claim of drawback or in discharge of export obligation against a licence issued under Duty Exemption Scheme contained in Chapter M of the Export and Import Policy or where export was from a port other than the port of jurisdiction of the designated authority.
26. The explanation therein is also required to be noted, which reads as under :-
“Export and Import Policy” means the Export and Import Policy 1 April 1992 – 31 March 1997 (Revised Edition : March 1995) published vide notification of the Government of India to the Ministry of Commerce No. 1 (RE-95)/92-97 dated 31st March 1995″.
27. Learned counsel also drew our attention to Customs Notification No. 155/95 dated 27th October 1995.
28. It is also required to be noted that by Customs Notification No. 155/95 dated 27th October 1995, amendment is made in the earlier customs Notification No. 104/95, which we have referred to hereinabove. The relevant portion of Notification No. 155/95 reads as under :-
“In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the Notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 104/95-Customs dated the 30th May 1995 published in the Gazette vide GSR No. 458 (E) dated the 30th May 1995, namely :
In the said notification –
(A) In condition (2) (a). xxx xxx xxx xxx (b) After the existing proviso, the following proviso shall be added, namely : Provides further that such credit -
(1) shall be admissible only in respect of the import items (hereinafter referred to as the inputs) which are specified with quantity restrictions in the standard input output norms published in the Hand-book of Procedures, Vol. II by the Government of India in the Ministry of Commerce vide Public Notice No. 121 (PN)/92-97 dated the 31st March 1992, as amended from time to time (hereinafter referred to as the said norms) and which inputs are declared by the exporter to have been actually used in the product exported.
29. Earlier Notification No. 104/95, if read minutely, makes it clear that it refers to permissible credit to the extent equal to basic customs duties and inputs used in the products exported by the importer. The proviso which is inserted by notification No. 155/95 makes it clear that it refers to the standard input-output norms prescribed in the Handbook of Procedure Vol. II published by the Government of India. This proviso refers to the credit and it is admissible only in respect of the import items which are referred to as inputs and which are specified with quantity restrictions in the standard input-output norms published in the Handbook. Thus, reading the Handbook, and this part of the proviso, it becomes clear that irrespective of the fact whether the exporter has imported the material in question for production and has used such material; if he has exported the material, then against that material whatever quantity is indicated in the handbook, he would be entitled to import the same. Reading the proviso, it is very clear that the inputs which are specified in the sub-entry in the input-output norms shall be admissible subject to the quantity restrictions. Learned counsel for the Union further drew our attention to the later part of the proviso which has been added and emphasised that the input must have been declared by the exporter to have been actually used in the product exported. Relying on this part of the inserted proviso, it was contended that there must be a declaration that he has actually used the input and he must have declared the same before the authority. If it is not declared, then the exporter is not entitled to import material as indicated in the handbook against the item exported.
30. Learned counsel for the petitioner submitted that the policy came into force when there was acute shortage of foreign exchange, and with a view to promote the export, the Government of India decided to permit exporter to import particular quantity of material as mentioned in the policy, irrespective of the fact whether the material was actually imported or not. Chapter II of the EXIM Policy of 1st April 1992 – 31 March 1997 refers to the principal objectives of the policy. Clauses (d), (f) and (i) thereof read as under :-
“(d) To stimulate India’s exports by facilitating access to required raw materials, intermediates, components, consumable and capital goods from the inter-national market.
(f) To impart greater transparency in the export-import policies and eliminate or minimise quantitative restrictions, licensing and other discretionary controls.
(i) To simplify and streamline the procedures governing exports and imports,”
31. Learned counsel further stated that today, according to the new policy, against the export, an exporter is entitled to import a particular percentage of the export in value irrespective of actual import or use of any item. Learned counsel for the petitioner submitted that keeping in mind this policy, the Court has to consider the matter. As for the policy of 92-97, earlier the Department was clear in mind that it is with reference to advance licence. Even the Department, on behalf of the Union of India, stated that it was pertaining to advance licence. However, when the pass book was introduced, provisions pertaining to Advance Licence could not be applied in the same manner.
32. According to learned counsel, if the contention of the Government of India is accepted, then it would amount to punishing the efficient exporter. It is true that an efficient exporter would see that with minimum wastage, goods of best quality are produced. He would take care to see that he gets maximum benefit of the scheme. A person who is not efficient will waste more material in manufacturing and that would cause loss to the nation. Our attention was drawn to the items such as Sl. No. 1503 at page 188, Sl. No. 1640 at page 219, Sl. No. 13 at page 238, item No. 147 at page 288, item No. 1765 at page 729, item No. 3 at page 786/788 etc. Learned counsel drew our attention to these items with a view to show that it is not the policy that one must actually use the goods permitted to be imported against exports. It is submitted that what the policy states is that against a particular item exported in weight or in volume, the exporter would be entitled to import the quantity as allowed in the policy,
33. Learned counsel for the petitioner submitted that efficient exporter will be entitled to get the credit in the pass book of “deemed import” of allowable items as Indicated in the schedule against the item exported. The amount of “deemed import” must be as per the norms set out in the schedule, i.e. allowable quantity against the export. Considering the benefits of the policy, the exporter will enter into a competition. On the basis of credit entitlement in the pass book, the ex-porter has to adjust his entire business. Any change in the policy, without an advance notice, is not permissible. Even Customs Department in the instant cases, allowed the credit of “deemed import” items against the export as per policy. So far as actual use of commodity is concerned, the learned counsel submitted that it is not the intention of the policy maker to allow the quantity to the extent it is used in the item exported. Even if exporter has not used the item to the extent indicated in the schedule for allowable import of that item, exporter would be entitled to import the allowable quantity.
34. With a view to examine this submission, learned counsel for the petitioner drew our attention to item No. 13 at page 238, i.e. Blank Audio Cassettes. It is stated that against export of 1,00,000 Nos. of Blank Audio Cassettes, the exporter is allowed import of 1,01,000 Nos. of Audio Cassettes Housing or Pressure Pads, Liners etc. as stated therein. Thus, the exporter is permitted to import at least 1000 Nos. more than what he has exported. If the exporter is manufacturing the cassettes using machines of proved quality and with best skill, he might use only one lakh Housing for manufacturing one lakh cassettes. However, on export, he is permitted to import 1,01,000 pcs. i.e. 1000 Nos. more. It is submitted by the learned counsel for the petitioner that if the contention raised on behalf of the respondent is accepted, then such an exporter would be the sufferer because he has to indicate exactly as to what material he has used in manufacture of the product. When the policy itself provides permission to import 1,01,000 Nos. of Audio Cassettes Housing against export of 1,00,000 Blank Audio Cassettes, it cannot be said that credit will be restricted to the extent of material used. There are several such other items for which even no proper account can be maintained. Therefore, in the submission of learned counsel, one has to go by the policy and one is required to permit the import as per policy.
35. Learned counsel for the Union of India submitted that as far as the disputed items at (j) and (k) of Item No. 7 of EXIM policy, 1 April 1992-31st March 1997 is concerned, namely : Vitamin Mixes and Mineral Mixes, there is no question of flexibility in allowing the import. It is open for the exporter to show that particular quantity of vitamins was utilised while producing shrimps. Learned counsel submitted that in certain products, the policy is to be strictly applied. In his submission, if there is any material to show that the exporter has utilised the vitamins, then in view of the policy read with the notification issued by the Customs Department, the exporter will be allowed to import the quantity mentioned against the exported material. According to learned counsel, for production of 1 MT of Frozen Shrimps 227 kgs of Vitamin can never be utilised. The policy is meant for bona fide user of the material. The petitioner has not produced any record to show the consumption of vitamins, and, therefore, the petitioner is not entitled to import the quantity at 0.227 MT/MT of Vitamin Mixes. Inviting our attention to the General Conditions for all export products groups which we have referred to in earlier part of this judgment, learned counsel submitted that nexus must be established. It is required to be noted that reading. Clause (1) of General Conditions, it is very clear that it refers to grant of duty free Licence. That clause has no reference to pass book. In the case of pass book, as indicated earlier, the authority is required to calculate, on the basis of standard input output norms, the deemed import content of the export and has to determine the basic customs duty payable on such deemed imports.
36. Learned counsel for the petitioner submitted that in view of the passbook scheme, the moment exporter has exported the commodity, the designated authority is duty bound to calculate the deemed input contents of the said export on the basis of standard input-output norms and has to determine the basic customs duty payable on such deemed imports. Learned counsel submitted that in view of this clause, once it is established that 1 MT Frozen Headon/Headless Shrimps are exported, then the material input indicated is deemed to have been used by the producer, and against the quantity which he is allowed to import is indicated, although he might have used less quantity than what is mentioned. According to the learned counsel for the petitioner the quantity allowed has no relation with input used.
37. It is required to be noted here that shrimps are not “goods” as under-stood in common parlance. It is not a product manufactured in a factory on a machinery where it can be established that a particular quantity of input will produce a particular quantity of output. Shrimps are basically a marine fish, which these days are reared in Aquaculture Farms. If shrimps are farmed, even with the best technology and scientific knowledge, an exact input-output nexus cannot be arrived at. In the Hand Book, “raw material” is defined in Chapter III, vide Clause 34, which reads as under :-
“Raw material” means :
(i) basic materials which are needed for the manufacture of goods, but which are still in a raw, natural, unrefined or unmanufactured state, and,
(ii) for a manufacturer, any materials or goods which are required for his manufacturing process, whether they have, actually been previously manufactured or are processed or are still in a raw or natural state.
38. Reading the definition, it gives an impression that the raw material refers to “non-living, natural goods” which are to be used for “manufacture of goods”. There may be requirement of more living shrimps for total production of one Tonne shrimps and that may be the reason the policy makers thought it fit to allow 0.227 MT Vitamin Mixes and Mineral mixes as per requirement of the farmer, without specifying ‘cumulative’ as is done in other cases. This possibility cannot be ruled out. Further, so far as shrimps are concerned, it is required to be noted that it is not a man-made goods, but it is a natural, living creature. It would be necessary to refer to dictionary to get the real meaning of shrimps, as a person not residing near the sea-shore may not be aware about the shrimps. The New Webster Encyclopedic Dictionary of English Language gives the following meaning :-
“A small crustacean allied to the lobster and crayfish, which burrows in sand, and is esteemed as food, a dwarfish creature.”
39. The New International Webster’s Comprehensive Dictionary, at page 1165, gives the following meaning :
“Any of numerous diminutive, long tailed, principally marine crustaceans ……………”
40. Thus, shrimps are basically, marine, natural, living creature. However, realising the importance of shrimps as food, there are several shrimp-farms engaged in the activity of cultivation of shrimps. So far as other “goods” are concerned, such as fabrics, one can visualise that a particular quantity of yarn or cotton can produce a particular quantity of fabrics. A ratio between the “raw material” and “finished goods” is workable. However, in case of shrimps, it is very difficult to establish such a nexus as procreation and growth are too much dependent on various factors. Therefore, the strict principle of 1 + 1 = 2 cannot be applied in this case. Certain shrimps may die before attaining maturity; certain shrimps may not achieve the desired growth in size and weight. For exporting one MT shrimps, it is very difficult to say that one MT of shrimps grown in the aqua culture farm would be sufficient. We are certainly not examining the procreation or perishability aspects of shrimps grown in the aqua culture farm, but suffice it to say that shrimps are not “goods” or “materials” as is understood in common parlance, but shrimps are natural, marine creature and its procreation and growth depends on several factors and the policy makers, keeping this in mind, might have decided as to what quantity of vitamin mixes and mineral mixes should bel allowed to be imported against export. However, later on the policy makers might have made some changes and bifurcated the quantity, but in the instant case, the export took place before any such bifurcation was brought into existence. At the relevant time as there was no bifurcation, it was for the exporter to decide what quantity of vitamin mixes and what quantity of mineral mixes if any, he wanted to import against export of the shrimps.
41. Learned counsel for the petitioner drew our attention to the language used in Clause 55 of Chapter VII – Duty Exemption Scheme. Learned counsel for the petitioner also drew our attention to the deeming fiction as found in Clause 54 of the said Chapter, with regard to the pass book scheme. It states that “Based on the standing input-output and value addition norms (referred to in Paragraphs 51 and 60 of the policy), the Designated Authority will determine the basic customs duty deemed to have been paid by such an exporter and the said amount will be credited in the Pass Book. Thus, while producing the goods as stated in the policy, the producer is deemed to have imported the quantity as shown against the material exported and credit to that extent is to be given.
42. When there is a legal fiction, the Court has to ascertain for what purpose the fiction is created. In East End Dwelling Co. Ltd. v. Finsbury Borough Council, (1951) 2 All ER 587 at 589, Lord Asquith stated that :-
“If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequence and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it – The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs”.
43. Thus if ‘A’ is deemed to be ‘B’, compliance with ‘A’ is in law compliance with ‘B’ and contravention of ‘A’ is in law contravention of ‘B’.
44. Examining the provisions of fiction created by the Indian Income-tax Act, 1922, which by Section 43 provided that under certain circumstances an agent shall for all the purposes of the said Act be deemed to be such agent of a non-resident person and which by Section 42 further provided that such agent shall be deemed to be for all the purposes of this Act, the assessee, the Privy Council pointed out in the case of CIT Bombay v. Bombay Trust Corporation re-ported in AIR 1930 PC 54 that such agent was an assessee for all the purposes of the Act and hence chargeable to income tax, assessee being defined by Section 2(2) as the person by whom income tax is payable.
45. In this view of the matter, learned counsel for the petitioner submitted that when there is a deeming fiction, there is no question of examining whether the exporter had consumed particular quantity of input for producing particular quantity of goods. According to the learned counsel for the petitioner, in view of the policy, upon export being made, the exporter is to be rewarded by allowing him to import the material mentioned in the policy, and for that, credit is required to be given in the Pass Book.
46. Learned counsel emphasised Clause 114 of the passbook scheme, with a view to point out that the designated authority will have to determine the basic customs duty deemed to have been paid by such an exporter and the said amount will be credited in the pass book. In view of this deeming fiction, it was submitted that benefit cannot be denied to the petitioner. It is also clear that in case of advance licence, there is a physical import of raw material out of which goods are produced and are exported. So far as the pass book scheme is concerned, that is not the scheme and the words used “deemed import” clearly indicates that even without importing the material the exporter might have produced the goods and exported it, and that is sufficient compliance.
47. With regard to the Customs Notification, it has been pointed out by the learned counsel for the petitioners from copy of one export bill dated 15-1-1997 that what is exported is “Fresh Frozen Indian cultivated Black Tiger Shrimps Headless, “Akasaka Special” Brand”. As can be seen from the xerox copy, the said bill was cleared by the Custom House, Madras on 16-1-1997. The same has also been verified and signed by various authorities. It is also mentioned in the documents that “VALUE CHECKED”, “Pass for shipment after opening and inspection of selected 10 packages verify description also verify particulars with reference to the E.I.A. Certificate. Inspect the rest”. Accordingly, from other endorsements, it appears that concerned Departments inspected the contents and passed for shipment. Xerox copy of the application for passbook for this particular quantity of export is also produced before us wherein there is a reference to oil mixes, Lecithin, and vitamin mixes. In Part II for input as per the norms in respect of export product, the details were furnished, i.e. giving the pass book number, shipping bill number. quantity etc. Learned counsel submitted that against the export of 16.200 MT of shrimps, the petitioner was entitled to get 3.6774 MT of Vitamin Mixes. The details also indicate that Vitamin Mixes consist of Vitamin C. Vitamin E, Vitamin A/AD3, Vitamin B-1, HCL/B-1, Mono Nitrate Vitamin B2/B6. It is further stated in the said declaration that “on the basis of the declaration given by the exporter and the records available, the actual basic duty admissible is Rs. Six lac sixty thousand two hundred seventeen only”. This document has been signed by not one but number of officers, say not less than six officers including the Designated Authority. Learned counsel for the petitioner submitted that if as per submission of the learned counsel for the Union of India he was not entitled to credit as claimed, then the Customs Authority would not have signed these documents. Till today, the Customs Department has not issued any notice in this regard. Learned counsel submitted that in view of the policy, the country has gained valuable foreign exchange. He further submitted that in the two cases before us, the total export is to the tune of Rs. 650 Crores. He further submitted that in view of introduction of DEPP with effect from 1-4-1997, now only value of the export is to be seen. Insofar as the commodity in question is concerned, import licence equivalent to 20% of the value of goods exported would be straightway available on exporting the goods and the exporter would be entitled to import the material of his choice.
48. Learned counsel for the petitioner submitted that once a promise was given in the policy and keeping that promise in mind an exporter has exported certain goods, then the benefit cannot be withdrawn insofar as the goods ex-ported under that scheme are concerned. Learned counsel submitted that a businessman will consider the scheme and would try to take the best advantage available out of the scheme offered by the Government under a policy. It is submitted that in the instant case, what is done is nothing more than claiming benefit available under the policy, and nothing else is claimed by the petitioner. According to him, the petitioners were entitled to get the benefits.
49. It is further submitted by the learned counsel for the petitioners that the exports were made on or before 31-3-1997 and not thereafter. Learned counsel submitted that looking to the clarification issued by the Government, even with regard to advance licences also, policy has been revised w.e.f. 1-4-1997. In the earlier part of judgment, we have referred to letters written by the Government and it is an admitted position that only after 1-4-1997, the quantity of import available in items (j) and (k) against the export of 1 MT shrimps, has been bifurcated into 27 kgs of vitamin mixes and 200 kgs of mineral mixes. In this view of the matter, learned counsel for the petitioners submitted that the petitioners cannot be denied the benefit to which they were entitled prior to 1-4-1997. He further submitted that the respondents have wrongly withheld benefits which the petitioners were entitled. In ground ‘A’ in Special Civil Application No. 3279/99 it is specifically stated that :
“It is also admitted that all these exports were made on or before 31-3-1997”.
50. The Pass Book was issued on 24-11-1995 and throughout the relevant period, 227 kgs of vitamin mixes were permissible against export of 1 MT shrimps as per the norms indicated in the policy. Merely because the credit has not been utilised till 31-3-1997, the benefit cannot be denied. The petitioner is also claiming the credit of basic customs duty for the export of fish products made upto 31-3-1997 in respect of Vitamin Mixes in accordance with the standard input-output norms. The petitioner is not claiming any benefit for export made after 31-3-1997.
51. The Apex Court, in the case of Collector of Customs Bombay v. East Punjab Traders reported in 1997 (89) ELT 11 (SC) considered the import policy. In that case, the respondents imported 100% Polyester Lining Material of the width of 44 inches. The shipments arrived on 4-11-1983 and 2-12-1983. The Bills of Lading were dated 25-3-1983, 23-4-1983 and 20-4-1983. The total quantity was 3,01,393 yards and the value declared was Rs. 10,86,375/-. 29 Bills of Entry were filed. The Special Investigation and Intelligence Branch of Bombay Customs House suspected that these 20 Bills of Entry were fabricated insofar as the description of the goods, invoice values and the date of shipments were concerned. The Bills of Entry were, therefore, seized and taken over for investigation. One of the questions before the Honourable Supreme Court related to the classification of the goods in question. The issue was whether the imported goods fall within the description ‘lining material’ or ‘fabrics, made from man-made fibres/yarns” falling at Item 25 of the List of Non-permissible items for import under Appendix 4. If the goods are lining or inter-lining material excluding nylon taffeta coated fabrics (25%) there was no dispute that the said material could be imported under the REP licence held by the respondents. However, one of the grounds on which the Collector of Customs came to the conclusion that the material was not lining material was that the Import and Export Policy document of April 1984-April 1985 Entry (vi) in Column 4 of the Appendix 17 was changed, in that it mentioned lining and inter-lining materials of width not exceeding 87.5 cms. excluding nylon taffeta coated fabrics (10%). Two changes were made, the first related to the introduction of the prescription as to width and the second related to the percentage being reduced from 25% to 10%. The Collector of Customs relied on this change and concluded that it was only clarificatory in nature and, therefore, the Entry (vi) in Column 4 of Appendix 17 of the Import and Export Policy April 1982-March 1983 must also be read as limiting the width of 87.5 cms (approximately 35 inches). In this background, the Apex Court held as under, in Paragraph 9 :-
“The consequence of this interpretation would lead to certain penal liability in regard to payment of penalty etc., and, therefore, we find it difficult to hold that this Entry prescribing the limit of the width has to be read retrospectively. The majority was clearly of the opinion that such an interpretation would lead to unforeseen consequences so far as the importers are concerned, and many of them who imported lining material of the width exceeding the prescription would become liable to penalty etc. We think that this view taken by the majority is unassailable.”
52. Learned counsel appearing for the petitioner submitted that in the instant case, if the interpretation as suggested by the Revenue is accepted for the period prior to 1-4-1997, the result will be unforeseen and the importers would suffer because of change in policy and that view cannot be accepted. In view of the aforesaid principle laid down by the Apex Court, we have no hesitation in holding that the amendment in the policy will have only prospective effect.
53. A Division Bench of this Court (Coram : C. K. Thakkar & C. K. Buch, JJ.) on 29-6-1999, while issuing rule in these matters, heard the matters at length and considered the decision of the Apex Court in the case of S. B. International Ltd. v. ADG F.T. & Ors. reported in 1996 (8) EXLT (SC) MISC 1 : (AIR 1996 SC 2921) and the decision of the High Court of Bombay in Sonia Fisheries v. Union of India, reported in 1997 (68) ECR 796 (Bombay) in which the Advance Licence issued to Sonia Fisheries was with conditions, one of which read as under :-
“This Licence shall be subject to the conditions in force relating to the goods covered by the licence as described in the relevant import Trade Control Policy Book, or any amendment thereof made up to and including the date of issue of the licence, unless otherwise specified”.
54. The Bombay High Court pointed out that norms cannot have any retrospective effect so as to adversely affect the rights granted to the exporter under the licence. The Court further held that :
“The norms prescribed will take effect only from the date of its publication i.e. from 20th January 1995 and not from the earlier date”.
55. “The facts of the case were as under :-
Sonia Fisheries was granted advance licence for import of 5 items as mentioned in Paragraph 1 of the judgment in accordance with and on the basis of the Export Import Policy for April 1992-March 1997. Advance Licence was given to the petitioners on 14th September 1993 on the basis of Export and Import Policy in force from April 1992 to March 1997. As there were no norms fixed at the relevant time for the said items of import, an application was made for issuance of advance licence as considered by the Advance Licencing Committee for fixation of norms as per the Import Export policy. The Advance licencing committee consisted of technical persons, customs officer and 10 other persons which considered the application for the said advance licence and as per the advance licence the petitioner was required to export sea food worth USD.28,10,000/- equivalent to Rs. 8,99,22,000/-. Sonia Fisheries was also granted the requisite Duty Exemption Entitlement Certificate in that behalf which mentioned the details of the items to be imported under the said Licence. On the basis of the said licence, Sonia Fisheries carried out export and submitted Bank Certificates in support thereof to the authorities concerned showing the export and the amount of foreign exchange earned by it. The exports were completed before April 1994. On 30th May 1994, the petitioners filed an application for endorsement of the advance licence for transferability as per Import Export Policy along with the original papers. Instead of endorsing the licence, by letter dated 27-6-1994, Sonia Fisheries were directed to surrender the Original Advance Licence, which action was challenged before the Bombay High Court. The Revenue contended that the Government of India has laid down the norms for which public notice dated 20-1-1995 was issued and under the said norms, the petitioners were not entitled to import commodities as mentioned in the advance licence given to them. Thus, the Revenue’s contention was that before the petitioners could import the commodity, the new norms were laid down fixing the quantity of the raw materials to be imported by the importers, and as per the new modified norms, petitioner was not entitled to import the quantity even though the same was mentioned in the Advance Licence. The Court, after considering in detail the Import & Export Policy, held, in paragraph 9 of the order as under :-
“It cannot be said by any stretch of imagination that the norms published on 20th January 1995 would have retrospective effect so as to permit the authorities to cancel or modify the Advance Licence granted prior to the said date, and that too in cases where the petitioners have fulfilled their export obligations ……… That licence could not be modified on the basis of the norms fixed on 20th January 1995. This would be totally arbitrary action. That norms cannot have any retrospective effects so as to adversely affect the rights granted to the petitioners under licence. The norms prescribed will take effect only from the date of its publication, i.e. from 20th January 1995 and not from the earlier date.”
56. In the aforesaid case of Sonia Fisheries, (1997 (68) ECR 796) on behalf of the petitioners, with regard to the contention of vested right of the petitioners, reliance was placed on the observations made by the Supreme Court in the case of S. B. International Limited v. Asstt. Director General of FT reported in 1996 (8) CXLT (sic) (SC) MISC-1 : (AIR 1996 SC 2921), and in that case the Apex Court observed that it is the date of licence that is relevant and not the date of application therefor. It is obvious that the norms (value addition norm) in vogue on the date of grant of licence shall govern the licence.
57. It was in view of the policy which was in force up to 31-3-1997 that the petitioners claimed the benefit. The Division Bench has, in this case, also considered the decision of the Honourable Supreme Court in the case of Union of India v. M/s. Anglo Afghan Agencies reported in AIR 1968 SC 718 and Union of India v. Kanunga Industries reported in AIR 1990 SC 2190. The Division Bench has, earlier granted reliefs in terms of para 18 (c) of the petitions, which read as under :-
(c) that pending the hearing and final disposal of this petition, this Honourable Court be pleased (i), to forthwith grant credit to the petitioners in respect of the exports listed in Exhibit-B hereto effected against the said Pass Book dated 24-11-1995 (Exhibit ‘A’ hereto) for the amount calculated with reference to 227 kgs of Vitamin Mixes against one metric tonne of export of frozen head-on/ head-less shrimps on the value as per the Order dated 22-12-1998 by the Tribunal (Exhibit ‘D’ hereto) and (ii), to forthwith extend the time for granting credit to the petitioners in the said Pass Book dated 24-11-1995 (Exhibit ‘A’ hereto) and further time for utilizing the amount of credit by a period of three months from the date on which credit is so granted to the petitioners in the said Pass Book (Exhibit ‘A’ hereto) on such terms and conditions as this Honourable Court may deem fit.”
58. The learned counsel has again placed reliance on the aforesaid decision of the Apex Court. The said decision is also considered by the Division Bench of the Bombay High Court. Thus, it is very clear that policy provides that a person exporting goods of a particular value shall be entitled to an import licence of a particular value, and in such a case, export of goods creates a right in favour of the exporter to get an import licence of the specified value. As per the policy, the petitioner obtained passbook and against the export they were entitled to get the benefits under the policy. Thus, it is very clear that the benefits which were available against the export at the time of export cannot be denied merely because of subsequent change in the policy on 1-4-1997, more particularly when goods were exported much prior thereto.
59. Learned counsel appearing for the petitioner submitted that in the instant case there is violation of the rights granted by the Constitution while operating in the field of trade or business. Therefore the impugned action should be struck down as unconstitutional. Learned counsel placed reliance on the decision of the Division Bench of this Court in the case of Modern Food Industries v. M. D. Juvekar reported in 1988 (1) Guj LR 481 : (1989 Lab IC 224).
60. Learned counsel submitted that this Court has jurisdiction to entertain the petition and has placed reliance on the decision in the case of Union of India v. Oswal Woollen Mills Ltd. reported in (1984) 2 SCC 646 : (AIR 1984 SC 1264). The Apex Court, in that case in paragraph 2 held as under :-
“We do feel disturbed that such writ petitions are often deliberately filed in distant High Courts, as part of manoeuvre in a legal battle, so as to render it difficult for the officials at Delhi to move applications to vacate stay where it becomes necessary to file such applications”.
61. However, in the same paragraph the Apex Court further held as under :-
“Having regard to the fact that the registered office of the Company is at Ludhiana and the principal respondents against whom the primary relief is sought are at New Delhi, one would have expected the writ petition to be filed either in the High Court of Punjab and Haryana or in the Delhi High Court. The writ petitioners however, have chosen the Calcutta High Court as the forum perhaps because of the interlocutory reliefs which is sought is in respect of a consignment of beef tallow which has arrived at the Calcutta Port.”
62. 3-4-2000 :
In view of the observations made by the Apex Court to the effect that writ petition can be filed at the place where the registered office of the Company is situated, and having regard to the fact that the Registered Office of the petitioner Company is situated at Ahmedabad, learned counsel for the petitioner submitted that this Court has jurisdiction to entertain this petition. We agree with this sub-mission and we do not discuss it any further, more so in view of the fact that the learned counsel for the respondents has not addressed us in this regard.
63. Thus, by an interim relief, the petitioners were granted benefit. The Division Bench also clarified that in Special Civil Application No. 3282 of 1999, total bills were 1170 which were calculated on the basis of 227 kgs. at the rate of 8 USD; After the decision by CEGAT. 229 Bills were corrected. Hence 941 bills still remain to be corrected. The department will pass appropriate orders in respect of those bills and grant credit on the basis of 227 kgs. at the rate of 36 USD. The Division Bench also directed that the same will be done by the respondents as expeditiously as possible. The Division Bench also made it clear that in view of the order passed by the Division Bench on 12-5-1999, in Special Civil Application No. 3279/99, the bills have already been cleared, and nothing further was required to be done at the relevant time. The Division Bench also clarified that the period for utilising the amount of credit would be six months after the department passed appropriate orders in light of directions issued by the Division Bench. The Division Bench also took note of the fact that a bond of Rs. 80 Crores has been executed and is with the Department. The Court also took note that a Bank Guarantee of 10% i.e. Rs. 8 Crores is also with the Department. The Court also directed that if the Bank Guarantee has expired, the same would be renewed till the disposal of these petitions, and on behalf of the petitioners, learned Counsel also assured the Court that the Bank Guarantee would be kept alive till the final disposal of the petitions.
64. Having considered the matter in detail, we are of the opinion that the petitioners are entitled to credit of basic customs duty on export of fish products made up to 31-3-1997 in accordance with standard input-output norms at the ratio of 0.227 MT of Vitamin Mixes per 1 MT of Headless/Headon Shrimps. It is, further directed that the period for utilising the amount of credit is extended to six months after the Department passes appropriate orders in light of the directions given in this judgment. The Department is also directed to return Bond of Rs. 801 Crores and Bank Guarantee of Rs. 8 Crores within a period of six weeks from today.
65. Rule made absolute accordingly in both these petitions. No order as to costs.
66. Rule made absolute.