Karnataka High Court
M/S Abb India Ltd vs Union Of India on 24 April, 2018
Equivalent citations: AIRONLINE 2018 KAR 2541
Author: S.Sujatha
Bench: S.Sujatha
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF APRIL, 2018
BEFORE:
THE HON'BLE MRS. JUSTICE S.SUJATHA
W.P.No.53391/2017 AND W.P.No.8219/2015 (T - RES)
BETWEEN:
M/s. ABB INDIA LTD.,
21ST FLOOR, WORLD TRADE CENTER
BRIGADE GATEWAY, No.26/1
Dr. RAJKUMAR ROAD
MALLESHWARAM WEST
BANGALORE-560055
[REP.HRI J.R. PRABHAKAR
ASST. VICE PRESIDENT]. ... PETITIONER
[BY SRI G.SHIVADASS, ADV.]
AND:
1. UNION OF INDIA
REP. BY ITS SECRETARY
DEPARTMENT OF REVENUE
NORTH BLOCK
NEW DELHI-110001.
2. DIRECTOR GENERAL OF FOREIGN TRADE [DGFT]
DEPARTMENT OF COMMERCE
MINISTRY OF COMMERCE AND INDUSTRY
UDYOGBHAVAN, NEW DELHI-1100107.
3. JOINT DIRECTOR GENERAL OF
FORIEIGN TRADE [JDGFT]
DEPARTMENT OF COMMERCE
MINISTRY OF COMMERCE AND INDUSTRY
6TH FLOOR, KENDRIYA SADAN
C AND E WING, KORAMANGALA 2ND BLOCK
17TH MAIN ROAD, BANGALORE-560034.
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4. POLICY RELAXATION COMMITTEE [PRC]
DEPARTMENT OF COMMERCE
MINISTRY OF COMMERCE AND INDUSTRY
UDYOGBHAVAN, NEW DELHI-1100107
REP. BY CHAIRMAN. ...RESPONDENTS
[BY SRI JEEVAN J. NEERALAGI, ADV.)
THESE WRIT PETITIONS ARE FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA, PRAYING TO DIRECT UNDER
ARTICLE 226 OF THE CONSTITUTION OF INDIA QUASHING THE
REVIEW DECISION OF THE POLICY RELAXATION COMMITTEE
VIDE PRC MEETING 22/1M 18 DATED 24.10.2017 VIDE
ANNEXURE-A1 ISSUED BY RESPONDENT No.4 AND ETC.
THESE PETITIONS COMING ON FOR PRELIMINARY HEARING
IN 'B' GROUP, THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER
Petitioner has challenged the decision of the Policy Relaxation Committee vide PRC. Meeting No.22/AM 18 dated 24.10.2017 as well as the decision of the PRC Meeting No.23/AM 16 dated 23.02.2016 at Annexures-A1 and A2 respectively, inter alia seeking a direction to respondent No.3 to grant redemption of advance authorization Nos.0710065927 dated 14.07.2009, 0710065928 dated 14.07.2009 and 0710068577 dated 01.12.2009 by accepting ARE-1s -3- and 'Certificate of Receipt of Supply' and other related documents as proof of export.
2. The petitioner is engaged mainly in manufacture, sale and export of electrical and electronic products falling under Chapter 84 and 85 of the Customs Tariff of India and is having IEC No.0388038047. The petitioner obtained three advanced authorization numbers viz., 0710065927 dated 14.07.2009, 0710065928 dated 14.07.2009 and 0710068577 dated 01.12.2009 for import of goods for use in the manufacture of export items. The advance authorizations were issued subject to the condition of fulfilling the export obligation by exporting specified goods mentioned therein. The petitioner imported various inputs without payment of customs duty under the said advanced authorizations during the period from July 2009 to March 2010 and consumed such inputs for manufacture of the products to be exported and -4- fulfill the export obligation by effecting supplies to SEZ during the relevant period in question. Upon fulfillment of export obligation, the petitioner filed applications before the respondent No.3 for redemption of the advance authorizations. It transpires that the said application was duly supported by evidence of supply of goods to SEZ in the form of ARE-1s, duly endorsed by the authorized Customs Officer at the SEZ unit and 'Certificate of Receipt of Supply' against each of the three advance authorizations specifying the details of the purchaser order number placed from the petitioner, advance authorizations number and date, ARE-1, Export invoice, product details etc. However, the office of respondent No.3 issued three deficiency memos all dated 17.08.2012 directing submission of bills of export duly certified by the SEZ Authority for the supplies made to SEZ. In response to the said deficiency memos, petitioner submitted that copies of bills of export are not available with the petitioner and they have submitted -5- ARE-1s along with certificate issued by Customs officer of SEZ unit in lieu of bill of export as proof of supplying the goods to the SEZ unit.
3. Thereafter, the petitioner submitted the applications before the respondent No.4 in terms of Para 2.5 of the Foreign Trade Policy, seeking condonation of the procedural lapse of non-submission of bills of export for supply to SEZ and for redemption of advance authorization by considering the ARE-1s and the 'Certificate of Receipt of Supply' endorsed by the authorized officer, Customs at the SEZ unit. The said applications came to be rejected by the respondent No.4 vide minutes of PRC Meeting No.23/AM16 dated 23.02.2016 on the ground that the bill of export is mandatory document for supply of goods to SEZ and that ARE-1s filed for supply of goods to SEZ does not contain the reference of advance authorization number and date. Aggrieved by the said decision of the -6- respondent No.4, the petitioner filed applications for review in terms of Para 2.59 of the Foreign Trade Policy. Respondent No.4 vide decision taken during the PRC Meeting No.22/AM18 dated 24.10.2017, rejected the prayer of the petitioner to condone the procedural lapse for non-submission of bill of export with regard to clearance to SEZ. Hence, these writ petitions.
4. Learned counsel Sri.G.Shivadass appearing for the petitioner would contend that they have fulfilled the export obligation while supplying goods to the SEZ unit. Though the supply of goods to SEZ unit was effected without filing the bill of export, the same is duly proved by the ARE-1s duly endorsed by the authorized officer, Customs at the SEZ unit. Further, the petitioner has received a 'Certificate of Receipt of Supply' against each of the three advance authorizations specifying the details of the purchase order number placed on the petitioner, advance authorizations number and date, -7- ARE-1, export invoice, product details etc., from the SEZ which is duly endorsed by the authorized officer, SEZ unit. It is submitted that the fact of use of inputs imported against the advance authorization for use in the manufacture and supply of finished goods to the SEZ unit is not disputed and stands proved by the alternative documents submitted by the petitioner thus meriting redemption of advance authorization.
5. The petitioner placed reliance on the decision of the Hon'ble High Court of Bombay, in the case of M/s. LARSEN & TOUBRO LTD., V/S. UOI & OTHERS, reported in 2017-TIOL-2291-HC-MUM-CUS wherein redemption of advance authorization was permitted on the basis of ARE-1s duly endorsed by the authorized officer Customs, SEZ unit, despite the assessee failing to submit bills of export for supplies made to SEZ. Learned counsel mainly placing reliance on the Consumption certificate/'Certificate of Receipt of -8- Supply' which co-relates the advance authorization license numbers with ARE-1s form numbers and date etc., argued that the RA as well as PRC failed to appreciate the Consumption Certificate in a right perspective.
6. Learned Counsel Sri.Jeevan J.Neeralagi, appearing for the respondents, supporting the impugned orders would submit that petitioner has not mentioned authorization number in ARE-1s. No other documents to prove the actual consumption of duty vis-à-vis the resultant products exported towards discharge of export obligation against the authorization was made available as the policy insisting that while removing the goods from the factory for export purpose, the exporter should indicate authorization number in the export documents. The same being not complied with, the petitioner's requests for condonation of the procedural lapse in obtaining the bill of export was -9- rejected and the same cannot be faulted with. Thus, it is submitted that the denial of benefit of redemption was not merely for want of bill of export but not mentioning the authorization number in the ARE-1s.
7. I have given my thoughtful consideration on the arguments advanced by the learned counsel for the parties and perused the material on record.
8. The High Court of Bombay while considering an identical issue, where the bill of export has not been filed and authorization number not disclosed in ARE-1s, in lieu of the same, communication of certificate of resultant export product was enclosed, held that the fact of the export of the product can be ascertained from the duly supplied copies of the ARE-1s forms, it is only a further technical objection, of the said form not mentioning the advanced authorization number in the initial copies of the same but supplied later on, could have been condoned. It is neither ARE-1s have not been
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filed nor there is a doubt about copy of ARE-1s or the authenticity or genuineness thereof. The decision of the Policy Relaxation Committee insisting on the bill of export was not countenanced for the reason that in the earlier occasions, Policy Relaxation Committee was ready and willing to consider the decision provided there is a proof of fulfillment of export obligation.
9. In this regard, it is beneficial to refer to the order of the Policy Relaxation Committee in some of the cases where the decision has been taken to waive the requirement of bill of export for discharge of export obligation against advance authorization provided there is a corroborative evidence i.e., ARE-1/excise attested invoice bearing the details of advance authorization/file number under which goods were removed for discharge of export obligation is made available, the RA is directed to accept such documents in lieu of bill of export. RA is also directed to ensure that the drawback has not been
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claimed either by the supplier or recipient against such supply.
10. In the light of the judgment of the Hon'ble High Court of Bombay as well as the earlier decision of the Policy Relaxation Committee, the consumption certificate placed on record by the petitioner before the RA as well as the Policy Relaxation Committee has not been properly appreciated. The said consumption certificate indicates the details of consumption namely, the supplier name, consignee name, customer LOA No./PO No., SEZ notification number and date, co- relates with the SEZ notification number and the advance license number and date. In the backdrop of these documents, RA as well as the Policy Relaxation Committee would have examined the consumption certificate/'Certificate of Receipt of Supply' to ascertain the genuineness of the discharge of the export obligation more particularly, the statutory authorities namely, the
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Range Superintendent of Central Excise and the Development Commissioner, SEZ have appended their signature on these certificates. These Statutory Authorities would not have appended their signature and allowed the endorsement or the affixation of a stamp, unless they were satisfied that these are the very ARE-1 forms issued at the relevant point of time which co-related with advance authorization and its number and date. On examining these consumption certificates, the Authorities could have condoned requirements of generating the bill of export and raising an objection that ARE-1 forms submitted without the number and date, would be hyper-technical. In the circumstances of the case where substantial material was placed on record to establish the factum of the export as contemplated under the Act and Rules or in other words, complying with the requirement contemplated under the Act and Rules, supplying the goods from the domestic tariff area to SEZ, considered
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to be equivalent to an export of goods physically from this country to abroad requires consideration.
11. For the foregoing reasons, this Court is of the considered opinion that the impugned orders of the Policy Relaxation Committee cannot be held to be sustainable. The 'Certificate of Receipt of Supply' duly certified and stamped/endorsed by the Statutory Authorities would have been appreciated by the Policy Relaxation Committee - respondent No.4 to grant the necessary relaxation. The decision contrary to the same is arbitrary, unreasonable and discriminatory when such relaxation is extended to similarly situated units in condoning the procedural of non-filing of the bills of export. As a result, the writ petitions succeed. Hence, the following:
ORDER
1. Writ petitions are allowed.
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2. Proceedings are remanded to respondent No.3 to examine the 'Certificate of Receipt of Supply' produced at Annexure- H to the writ petitions. RA may accept other documents in lieu of bill of export provided there is a corroborative evidence/co-relation to the ARE-1/Excise attested invoice bearing the details of advance authorization/file number under which the goods were removed for discharge of export obligation.
3. Respondent No.3 shall check and ensure that the drawback has not been claimed either by supplier or recipient against such supply.
4. On such corroborative evidence placed on record by way of 'Certificate of Receipt of Supply', the same shall be
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accepted by respondent No.3. Requirement of bill of export for discharge of export obligation against advanced authorization albeit such advanced authorization number not reflected in ARE-1 shall be condoned.
5. This exercise shall be completed by the respondent No.3 in an expedite manner in any event not later than two months from the date of receipt of certified copy of the order.
Sd/-
JUDGE NC.