M/S Garments International Pvt Ltd vs Union Of India on 18 March, 2008

[Cites 0, Cited by 1]

Karnataka High Court

M/S Garments International Pvt Ltd vs Union Of India on 18 March, 2008

Bench: Ram Mohan Reddy

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" TEXTILE COMMSISIONER

 APPAREL EXPORT PROMUI'1C)N "OUNCiL
 NO 10. RAHEJA CHAMBERS
12, MUSEUM ROAD, BANGALORE
REP BY ADDITIONAL DIRECTOR
 RESPONDENTS

MB ¥J \ (BY SR1. N DEVHADASS, AGS FOR R1 85 2)" ff 9' {By Sri: K SACHINDRA KARANTH, ADV FOR R3"-._) v "

THIS wan' PE'!'!'1'!QN IE-3 F1LI_=:DiJ1~:L1E:2 AR1F1cLEs«:e26LL Area 227 09 THE CON-S'!'!"PUT!O!\!»._ QELENLDIAL pR;Av:rI'@ T9 DECLARE THAT zwnoszrson up 'PEs'!ALTY 'av FORFEYFURE B': RESPG UNQER EXPGRT EN'i'I"i"LEMEi'V'T 1 9-:5-Vi9'9"%, I" V EH' LLLEGAL AND ULTRA 'v'iR""S iii * EL-i='g'i'iGI§i 1'0 OF THE l7'OREiGN TEASE Arias AGT' 19+'-L" u-sunm ACT), FURTHER DEC.l_.A--TtE 'T'f1.4.'f*i_ ADJU'Di(3A"i"iGiw' PROCEEDINGS ADOFFED ,BYRéi1;&. 2%-'._1'ah BE ILLEGAL Aim ULTRA VIRES IN, TERMs,LoF.VsECTI0N 1310:"-' FTDRA 1992, DELCARING THAT THE' '~COLLEC'l'l€)N OF ILLEGAL PENALTY mr %_REf.3.E~ONi3E!éI1'S FROM' I-'FJTTIONERS TO THE c....s, .:r.§A'1'Ep*..I?t;.31~IL:; lI~i',I_Jr!A To BE ILLEGAL AND I LTRA '!lII|I ;1n1SAT':'3£'T:-T}'FEIf\}§'*$, "C-G}v1§.G 0}.' F0}? FREE.-IMENARY "E'Rii1'G*-- iii? .'B"GR(}E}F,a'FHlS DA'! THE SOUR'? MARE THE-

"F'CVL' "W ' ' ' ' effected 7'.i3% 0" the éﬂﬁ'!iéTu't":i'lt. resii1"'f'g iii the V% V. ._..}\ppa1ve1 Export Promotion Council, "tsangaiore ('AEF-C" for short), forfeiting Rs.1.82.856/- by order dated 23-10-1997 .A...n_...I;1m-"A" which wlzgcm in appeal beﬁne the First \..

_|}*'\ V' 'J.'£ ..

Annellate Committee, was conﬁrmed by order . Appellate Comniittee. 'rienoe,7i:Zi_s i ' A

2. Petition is opposed 'Statement-of.aibjections dated 20-02-2005 of tlie 3-"l':1:s_1;-ﬁortdentlsnd Statement of objwthns a...:..,;31-o5«2.oo55;_::eggpa;:1;a§i:. 1 and 2. 3. Iii. of Respondent Nos. 1

and     of textiles and clothing
from    agreements entered into

between (loveinznent and Governments of developed '' V' ~.undei4 ' a..gLs _.f the erstwhi_le Multi Fibie

4...: ..£'.._......-..I i.he"yea:r 'i':*._'_:"4. The Textile i1npoi"lii1f; oounmes 'T: r u to ss~."lQ§1ota countries" who have placed restraints on import '0 lC_" not "speciﬁed textile categories 'Quota items" within the levels prescribed in the bilateml agreement and that the coming into force of the World Trade Organisation (WTO) in 1995, quantitative iestrictions known as "Import quotas:

Utx in the bilateral agreements were ehangw undertake' T relating to Agreement on Texﬁies C1ottim??"_ {A'I'--o_»}.'--

-- ----- -1? -u..u-tal-In"'l:\.lq quotas also known as export gentitieinents are '' einenget in exporters, 'Vi%n'V't»whieh.__e'to.s;yatemW 'f ail-"wati.en of qv-.1.-t___ is an tie...' to the expoi' re'v"'nne in t...e %....ﬁ_{ iiiteiest_.o_f It is stated that f'%~tt£f;ff*n'c-;:ef =.=.a;;1.d~..;;z_1;V,'nt1VgeiGovez'nment of India es "Export EnﬁﬂementVi'[Qn}')ta)'Aiioiiéiqggs of quote... we mainly ciﬂne., nn.der"'foiIe«yvi11g "'teg"*r"*s in ea-.% of _ --_""U meadvmade ., _Va}_Viv"Fi"J%vz'«quota new en pest mrform_e_noe of the the Past Perfonnanoe entitiement [Ptifiijsze A. , _bl*'1'.5% quota based on new investments matte for modernization of maelttem I.1__d_er the New !I'.'."£'.-1SiI¥..'!1'S_I Entitlement (ME), 'to encourage investments in industry;

C} 5% under "en-qu..f.a. (NQE) entitlement to _ _ "*3.

encourage diversiﬁcation of exports to "on--'"'ota ' !\ oounilie;

d) 10% on First Come 'irst '"' Ive to

--:1'-L1-I.-IIFI-:'I'I':+':.B(l '1''! D I-'II"'I'Il'\ nu-u-u Value Realisation.

The framing of poiiciea. it istts'.-a.;ij.;ci~,.>is conferred under Secﬁon titof (Deveiopment and Regulation) Act. 1992 Land Item No.8 of Appendixd .¢jetSS?tﬁt$hﬁ0n of Export and Import the Import policy. It is the P0150)'. an Apparel...' ._ Council (AEPC) headed by Director 'Ge_"ne1ja1V' ie' as Quota Adm1n1' 'stenn' g _ on of the Government. responsible for V. ézquota in terms of the policy. The availability of ttquote, Z; i;~vs.;.-;L.t.;=i.ia.st1y over ships the demand and in View of the xeetneted ava..ab1!ity, ....r..ur.:I.§.-......e a pyegum Mmor V of 'uaextrde '_'ar'"ent.s being the quota ....I.I.......e5, 1t 1.. t' . 'essenﬁai to ensure quotas; are may "'.'d are not to go waste due to specuiative ti"adiT1g u unscrupulous elements and therefore, the policy envisages utziliation of the quota by 30"' September of the relevant \mt U\ year and failure to do so, the K surrender the quota and seek quota aﬂocet;-d iu the [email protected],7- the ? bmgnner aixdd reievant year is in the CI" El nxeu deposit receipt o'r;[I_iem£l_11d peiicy in operation till the __ve1=r'r4'V2'{)_'u'-'.(§',"" '=«~1e1~3' 'gum the amount of EMD hv a, dated cheques. The \4\.I.I..l\.l.Il..:\.'r1J £\n-Iﬁunlnl-I-I - n...' ...11 3 3' 3 S 1, 0 3' E-k 3

3. 5.1.

§ 1-!' shaﬁ be"ze1eased~ 111 case of i.iti1isaﬁ'n "pets 75% "' ' feet' mp\'d;:1g:'items and upto .'T~0% in case of siow moving 'itee1s.VV'VE'2uNiD forfeited in pm_port1on' to the sl1ort1a' 11" of If an exporter is agglieved by any order of 3 1. mm ms-it-1.:.=-.;. ».a__ ne 2 to mg Appellate

--.._..'_...__ "-4 '.:1*.erea'.*..er m a §&nd ﬁr-=1 * C mmitt 1::

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-"The Fxppeila" Cae*_*"'r.ee-3 rjected €11" c'..=.....-"'-'- ef ibme-majeuxe in the a'bsen_ cc of Ieievant mafenaﬁ' constituting substantial legal evidence of the fact that a_ mi J_J'\ to fulﬁl the export obligation was due to acts _ control of the exporter.

4. The Statement of objectioii.-s__ 2 raises almost identical contentions as by V Respondent Nos.1 and of it objections. In addition. it is contendediiitliat taken the beneﬁt of the policy by furnishil-'I8 failed to export __"cif_ " provided. cannot be to It is stated that the peﬁtionef is that no amount could be fo;ffeit'ed. The contention of the 3*." iespondent is did not place relevant mateiial in support 'of its of force-majeuie.

teamed counsel for the petitioner advances the A " it contentions:

a) that the 'Policy' providing for forfeiture of the "niest nioney deposit, in its entiiety. for exports iess than it 75% and proportionate thrfeitaie for e_x}_H..irLs between 75% {wk o I-lull-I 11' flan urn-rnn11n.I-n nuuflsnuulhr -II-'-51.1 in --, 'V "1 "I"1"'-""'3"" '3" '_.l.Il. I15 I -.1-I1' ' I-l..I.'|J_l .1L_y Jr-'u considering the documentary <ev.idenc:e-._ by the % peﬁﬁoner in support of the claim' of fome~--mq_ while"

directing 17c_!rfeit.l.l_'m -1' t.h.«,=. " " " "

(1! fhnf "111: 1\.ni'1'I-:.n1-us-an 1;':-'.\.rVIl':-IA-or nan;---'u.-'.'....d'-.'.;.-'.i.':.....V:_._..........d.... --...A.... '*1 "nib I-uv yyuuvuun lv.«lI£h'l,'VJ.l-I5 \.g»J$!.£'\JlVl?..€'.~._g_i.l.l.l.l.lC~.I1l-Ii l.lpI.D 76.1396 of the entitltemeliﬁ; fhénonéﬁﬂﬁﬂment was not .1.-..-. 1...... -...2'I'Il.'.-I l."._.!L.__._?'_.L"4__I_'._ ;__).'_A_!_ "1 ; 1- 1 - uuc uu VVl.l.l1ll.I::i:I.il .; ,1;l.l1 _A DII.C1'--.Dut»IOI' reasons ncyonu its control. t' A' ﬂni"Hn;r'- nu-|.-n.n-Jn -{gnu-ul-:3-nan -3.-I.;_.-.4-2...-.'I , 1&4'-7 \'.-nu-.1\_»-I .\§uw.--Jnr;'\a:.:r_'.I u_I uyywulw :.I..lV\.,Il.Vll.Iu .I|-lK'a'.l.Il..IlJlI.I issues »- facts, the authorities having .-.....-.......4...._: 4.1.- ..,1"..:__ ;_.:.--f1.-.._.;._ #4-.-_____ _____.,4 ,,,.:,,,, . . tlUl.Jl?1Jl-E?-.n»l.l.k.lC Llliﬂll U1 1UlU.':"ll.ll:l,]CllJﬂ=. CXIIIIOIC ICIUSC II) 8008])! " "the petiﬁonefs -- in the fact situation of 2 L' learned Senior counsel Sui. 9.1.. Rawal .«,_'for Resyondent No.3 contends that the challenge to the " is unavailable to the peﬁtioner as the g;n;v'r..r1..n.--.. Hrnurtnd F II In -rt f hp nnnfn nlln t In 1+ uni 1'11. + n 1-..." :' ---'---- O'-V-H! -----I--'--- ''0 Inn-V-I I-_lva1-rut-4| nI.l.l.\JI-IAr\.|. III: II: VVIMI-I-I-lulu Inl-III lit!-I.l\IloI ﬂiéflilllafnrl I-15 I-11' ('5.-5-.nu-c.-...-....... ...-...._-.__'I .2... wutaulnwvu 1:\.»\.r\.u\.u.u uu I.l..l.G 1.6!.'-lI..I.I.R.l D6 1 UULIII. 1, 'ma.-crust: AL' 4.]... .........'I.'..._..... 4.1.- __A.:.|.:_____._ __..__. 1.1- _ ____-__ _1- AI__ .u.ua U]. I: punt-y, 1.11 l.II.IU 1 W B Iuuy BWHIB 01 [[10 M1 gu\ KID }'i'"v'ii".qT_;' "-"pied th' *'"i:2s of foﬁE:it11re."'ii: is a1*gIV:e€i,.oa.11not.'

1.- 'l____._'I 4.. ____4,___ ,1 AI 4 ;| A-V" V - - uc ucam 11 (1 mat me so large n. relegtes to fori'ei'mre is either Senior counsel further oonterlchg contention over the validity 9,-t\ in the case of GOKALDAS " V§'§.§:"v-:»UNION 012' INDIA, a learned of Delhi, rejected the plea in tlie 2007 (.7) 3112 347 rose,' Learned Semer eoI_1.13_g.e_L ran a.d.d1_.-.11, or_arI.t.....s t...;=-.- i.'....,. peu.__::er 11- v1.rI.g z!:1e-am- mater-..:=..! eo1:e*.1..:*.ing .eu...ei*.~.n...:=-.. .egal e'.':'...e:.-ace of a "'-="- w fem-e=majeu:*e, the __'I A.'I_._A. 4'L,_ ndeu ma. I we petitioner having expoﬁseci ii]3fD 76.13% of the export entitlement, the aguiftiotiiies were jusiziﬁed in directing forfeiture of the 'amounts from out of the bank guarantee, in proportion, to " " "the extent of unfulﬁlled quota. N »-u\ 10

7. Sri. Devadass, learned Senior é Respondents 1 and 2 contends that the petitiorreri _ secured an allotment of a quota to :, A' the policy, without questioning the -1;§;1'Il1S 0151 ﬁorieiture. cannot be permitted to appgubgw 1 spmm by calling in question the tlirrauti. _shor'r of garments. Aooordirrg to quota for export of 'ooee it is presumed that its obligation to export. and in order to ensure sue-lir gemviding for forfeiture of the amolrrrts out-. oi--'. t'.heV bank guarantee as stated be as eitlrr irrational or I.i.'z.i.-....V-... ..- - - .. _-m-r co-I.I.._..-1 ..a_t._:-s t. and_ t____- g;'.._--.._ ..... .....1 .. ......I'I -...:a.I...... 4... ....L4 4... .........:.-'I- 1:'..- 5.3%: U! Uuuuisci, B W 11 l|.l..ll.I..l ta .1 1|. luuvruc r 1 ,, 'I'\,,,,!s A,--._o....A_J.A- .__. 4.- _____ _... 2.11 __ of ﬁle uanrc guarantee, so as ID ensure run ri 11 has been done.

8. Having heanfl the 1eamed..__eouii.~:e1d for V perused the pleadings. there can nyorret {hat in terms of the "Policy", the "for and secured e_xpt_1rt entiﬂe_&,gts-,A _ jgerments and

-...I.rL..g .3-.'_-_ t a the AEPC nnnn 3 ﬁgr 1' g11_____ __.9_l___.____ :_a___ :13 why act-L-333*' _V:V".:ef:'*i.'3n."...:1 the memes .'...1.11 out *1 bank g"*"'"aij:£ee~.,_»which was Ia:-3""-"dw m by "*9 pe" "-1. 'd'i"}.'-e frt be""g ""h"'ﬁt-:~r1 Wit}: the turn 11!" ,,1 _,'I L_..'I PA-

'VVe::1Jla1ieiio;1.Aoii'e1ed,"'ii3rﬁéited Rs. 1,uz,ua6i -, cmcuuéiwu in of non-exported quota, from out of the bank guarantee, by order dated '23- 10- 199'? w -"A". This older when in appeal "the l;'irst Appellate Committee. was conﬁrmed by order __"'«dafe;1b'(§1-10-2000 Annexule-"C", and the Second Apgellate " dismissed the appeal by order dated 14-09-2004

1. J1 H.A...ne.::1..:.r:-.-"!3"'; 1 wk UL] \ ehgqnscicusiyh aglc the terms of the forfeiture' that if lt g.-I ED 9, In the admitted facts noticed supra, the que:_§'tion<§V' "" 'h

a) whether the challenge to the palm if relates to forfeiture, ii')? ﬁﬁﬁrfﬁiﬁihﬁéf 'cf t1*u-=-peseyczt obligation within the time etipuieted is seeaeieaezgee h 1:) Whether the AEPC :'1?_::'}iﬁia?1t;e~--.fCo-uum'"'ttees were justiﬁed in 1ejecﬁngyt11e7"peﬁ1;icz1er's*Vc1aim of fomc.;najeuIe'?" V' '' VV ' 2

10. V. ereﬁﬁement q"c"s allotted was 'to permit it to export gannehts and fumisheti a bank gumahtee. that in case of failure toj"m1ﬁn chﬁgetio . in its entirety, wouid be subje4ct=etc" clause of the '%}icy'. 'The petitioner _ ente beyond upto 90% of the export eeeeemeee. weum be liable I-for proportionate forfeiture and ifletssii 75%. forfeiture would he in from out of the in the Bank guarantee. The consent of the .aH.""'pet.;it:ioner to be subjected to the terms of the poiicy. relating to forfeitumc in the event of to» ' the expo. rt ﬂeet U\ 13 entitlement, in the circumstances cannot be ~ nnnig 1' . n .1') 13;;

arr; --.-..--.u -----_v. ..--yl---.----

11. The centﬁnﬁcn that the "1-"'?*=e of *?""T'."'*i' t1*e.'=--4n"r==A V :_ 'gm. .. ._:.___ Lane «uuu irrationai and un1'ea'"T1aule pale of consideration. eﬁﬁxejaoﬁcy of ailutting quotas is with the jmrpoaee " euﬁrttenﬁng exchange, whieh tat' for country and as 'Al the uﬁiiaaﬁon' of 'iiiéé ...'l.1...-

_.__, 'puuuy ﬁx V'.:ll'.Il'$'l ii "uzuuu nu forfeiture. Ctenira1"Ge"vemment entitled to ibI::'n1ua'""'t;e a 'hbaeednt '"e-1.1.. _____ H1311'-Cise timing and manner of »imp1ementat.t_cin __of the quota to achieve a particular objective, : Viti-1'ra"a--_A in the matters of bilateral tzlade, in my weii Wmun its 1*-

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opmmn,-Abu..g ﬁn..." .. .... .. ..... -, -. ..-...-.____ _.. ' ' '* "ts tr: "'r"v*1rle tor iwte-at.'uu. auu .1"-..m,m:e, "came "int he termed as either irrationai or u11oon'"'1:'u til. it " ~-must be borne in mind that there must be free piay the Government in matters of economic policies which are not eubje..t. L. jI.I...ir.r;:3.1 Leview, unless demonstrated to be t . ID \ Y"\ U \

-1 ,-_J,1,___e inepnsiateiit gi-esifiqixe. _ A'

---- - _--- L4 ﬁtiazy s"'t"mI_'y' pix:-"'s'6r.s er the %ns*.=§...:1.1'.c.=:ig. 'i€. 'i*.s;_ ' -1- weii settied ism that couﬁs. exér"v*':-rse oi't1-1-i1f'jii1*é*}".h€;"o:1--._ ,,, I£A_# _'l not hansgmss into the fieid of as are equipped to adjudicate oil-..__a mg: % court, no-doubt has a duty to see the' of a dwisign. no law is Tights not 'the extent 1 I

12. circuiinstahoes. a leanica Siir I':

' A 'ﬁnd-t

-Judge of %"zms. Acag of Goimiras nvmus - I LIMITED vs.VVv'E--.II§li{)l§ViV' -§)4VF._v1l'§!i3iIA in W.P.No.8539]2003 and .f;ie'ti1i91;s. bjr order dated 12-03-2003. that the policy providing for foxfeitum _..11..'--- for non-fulﬁllment of the obligation

-I.;._.d-- uLh..[ qmaa, cguld be challenged by an exporter " --1_-----_ the ""n9'ﬁ_. 9f 5 nnl-invv, {-hllmninn the deciﬂicll tr-.r.-.-.r_.,-. _------.:..-uwt, .----.-- -......-_, an G""i~a. V'. ﬂmn (if }"c'.'''' ad Others 1*:-.-...-5.. an A... 1996 SC; "46' , 13:1 ﬁr ﬁrt"r 'f 1ii'ut:"1"1"erenc*' '0" wnt ce'ar*= Eng' '' .

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13. In yet another decision ofa learned * the High Com': of Delhi in Gokaldas-V Images 2007(7) STR 347(0EC) took the v1ew' thatii gauges; being peculiar in its nature of -"be-iilgi 1*.-.-vi_-et:l _for each country. the AGoif'emnient .was'_yAIvei}:§ within its right t... .'r.1n1m1_I_mte is ._and maximum . -0 I 'tit'i1i""i.'i\'iIi of t.'1e"quot.9,-1.'-.f1a.eL1 c,;1____t'v.he"v,.iote1ie1ed with. Having lead "::'fV'ug*i:€%e~$'*:*tt'r:1't.l*_i!.: jiudweizt, I ﬁ.11d_ __o stood reason to §_1evi~a.ie Endmgs and amclusions arrived sat by j _14. ;1"i1e of existence of fame-majeure " '~ L. 'delay. in delivery of fabric. defects in fabric "'16 ~ .exeess'«v®ns-_...-=np!i..n of iiibzie during pmduotion of ~--'5j="g9,?":it*;'g w short s..ip.....-..t 1.1..-- ..a_11cellation of ..eons_ideived. is without any inefit. E "3' w bee.-ause, an Aexajilination of the onilers impugned discloses app1iea'"'*i1 1 V' ' d and consideiaﬁon of relevant material, leading to the conclusion that men: fact of delay in delivery of fabxic or defective fabrics or excess consumption of fabrics during Li U'\ 1'7 production cannot be termed in be fortne-mﬁeu;"euw':';{li5.*;.*=r;. In my opinion, no exception can beﬁaketi' fodihe' of the authorities.

cases. were not %f'¥"f*,"'is also without any merit. force-'""'=1:.re is dependantjv 'based on .d=.r-Ld.-:44... of such conditions. The ...»".i'£i{";ﬁ€51T_ has ' '£z'1;ile to show that in identical s"""c§e3, the ai'.t}iorit§,' anmmmpted. the of tome- 'dbeing dependant upon the theta q....'='"' oizpumstanoee and material on would in a case, it .1_1_1_1_: samg that any decision rendered in that case. not, u-.1ess_= and oimumstanoes me shown to be \ 1 i€1"1_!'l".-l""", have ap"'.iw.;o:1. ' Vi L) \ 18 Writ petition is without merit and is dismissed. --

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