@JUDGMENTTAG-ORDER
M.B. Shah, C.J.@mdashTo the petitioner No. 1, M/s. Sonia Fisheries, Advance Licence dated 14th September, 1993 was granted for import of (1) Kraft paper other than ivory board, (2) Cardboard other than Ivory Board (3) HDPE/PP Granules (4) Preservatives and (5) Raw material for fishing net in accordance with and on the basis of the Export Import Policy for April, 1992 to March, 1997 and the Duty Exemption Scheme contained therein.
2. It is submitted by the Petitioners that as there were no norms fixed at the relevant time for the said items of import, the Application of the Petitioners for issuance of the said Advance Licence was considered by the Advance Licensing Committee for fixation of norms as per the Import Export Policy. The Advance Licensing Committee consisted of technical persons, Customs Officers and other 10 persons which considered the Petitioners'' application for the said Advance Licence and as per the Advance Licence the Petitioner No. 1 was required to export Sea Food worth U.S. $ 28,10,000/- equivalent to Rs. 8,99,20,000. This 1st Petitioner was also issued the requisite Duty Exemption Entitlement Certificate in that behalf which mentioned the details of the items to be imported under the said Licence. It is the say of the Petitioners that on the basis of the said licence the Petitioner No. 1 carried out export and submitted Bank Certificates in support thereof to the authorities concerned showing the export done by the Ist Petitioner and the amount of the Foreign Exchange earned by the Petitioners. It is their say that exports were completed before April, 1994.
3. Therefore, on 30th May, 1994 the Petitioners filed an application for an 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 27th June, 1994 (Exhibit ''H'') the Petitioner No. 1 was directed to surrender the Original Advance Licence dated 14th September, 1993. That order is challenged by filing this petition. It is prayed in the petition that the Respondents be directed to revalidate the said Import Licence as originally granted and to forthwith transfer the Advance Licence for the value Corresponding to the export effected and make necessary endorsement in favour of the 1st Petitioner to that effect and/or the 1st Petitioner be permitted to import or cause to be imported the said raw materials without payment of any duty.
4. In the petition it is pointed out that the Advance Licence and the Duty Exemption Entitlement Certificate to export were granted to the Petitioners after complete verification by the Competent Authority.
5. At the time of admission of this matter, this Court has granted interim relief in terms of Prayer Clauses (c) and (d) on 16th January, 1995. That order was challenged by filing SLP before the Supreme Court. Before the Supreme Court it was pointed out that by granting interim relief the petition is virtually allowed. It was conceded that in accordance with the new policy Licence has been issued to the Petitioners. The Supreme Court in this view of the facts observed that the parameters of the dispute between the parties would only relate to the grant or non-grant of the old licence, which was required to be decided at the time of Writ Petition.
6. At the time of hearing of the matter, the ld. Counsel for the Petitioners submitted that the order annexed at Exhibit ''H'' directing the Petitioner to surrender the Advance Licence on the face of it is illegal. He further submitted that instead of endorsing the Advance Licence to avoid contempt proceedings which were pending before this Court for non-compliance of the interim order the Respondents have granted licence under the new Policy which prejudicially affects the Petitioners right. He submitted that the Petitioners have acted upon the Advance Licence granted to them. They have complied with the conditions by exporting frozen fish and fish products of the total quantity of 1114.540 metric tonnes of the total value of 23,00,742.07 U.S. $, equivalent to Rs. 7,16,32,302.27/-. Therefore, there is no question of applying the new Export Policy which lays down different norms.
7. As against this, in the affidavit in reply, it has been pointed out that the Government of India in public interest has laid down the norms for which public notice dated 20th January, 1995 was issued. Under the said norms the Petitioners were not entitled to import commodities as mentioned in the Advance Licence granted to them. Since the new norms came into force the Respondents were not in a position to comply with the interim orders passed by this Court. It is pointed out that when the Licence, Exhibit ''D'' was issued the said norms were not fixed. The Department relied upon the information which was furnished by the Petitioners and the Advance Licensing Committee considered the application of the Petitioners and granted licence, but before the petitioners could import the commodity the new norms have been laid down regarding fixing the quantities of the raw materials to be imported by the importers and the quantity required for the manufacture of export products for the export of every Metric Tonne of the commodity which the importer is exporting. In the affidavit in reply it is admitted that Advance Licensing Committee has issued Licence, Exhibit ''D'' as per the provisions of Export Policy in force at the relevant time by relying upon the details furnished by the Petitioners and taking into account the actual requirement in the manufacture of export product. However, the endorsement for transferability of the Advance Licence was not done because the Government was considering the finalisation of the norms of the quantity of the raw materials required to be imported which is required for manufacturing of export product in consultation with the Marine Products Export Development Agency. In the additional affidavit in reply dated 13th September, 1995 it has been pointed out that the Petitioner is not entitled to the import of the large quantity even though same is mentioned in the Advance Licence as per new modified norms. It is also submitted that the Petitioners are not entitled to take benefit of their own wrongs as they deliberately misdeclared the quantities required to be imported at the time of making the application for advance licence.
8. In the present case, admittedly the 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 31st March, 1997. The relevant portions of paragraphs 47, 48, 50 and 51 of the said Policy read as follows :-
"47. Under the Duty Exemption Scheme, import of raw materials, intermediates, components, consumables, parts, accessories, mandatory spares (not exceeding 5% of the CIF value of the licence), packing materials and computer software (hereinafter referred to as "inputs") required for the product to be exported may be permitted duty free for processing and export by the competent authority under the categories of licences mentioned in this chapter.
.......".
"48. An Advance Licence is granted for the import of inputs without payment of basic customs duty. Such licence shall be issued in accordance with the policy and procedure in force on the date of issue of the licence and shall be subject to the fulfilment of a time-bound export obligation and value addition as may be specified. Advance Licences may be either value based or quantity based.
Licences issued under the Duty Exemption Scheme shall be regulated in freely convertible currency. The FOB value of exports and CIF value of imports in the licences shall be specified in freely convertible currency. The CIF value shall also be specified in bracket in Indian Rupees at the exchange rate on the date of issue of the licence."
"50. A quantity based Advance Licence shall specify :
(a) the names and description of items to be imported and exported;
(b) the quantity of each item to be imported or, if the quantity cannot be indicated, the value of the item;
(c) the CIF value of imports; and
(d) the FOB value and quantity of exports."
51. The standard input-output norms for the imports and exports for the grant of both value based and quantity based advance licences and value addition norms for value based licences shall be in accordance with the norms published by the Director General of Foreign Trade in the Handbook of Procedures (Vol. 2.). However, in respect of quantity based Advance Licences for which such standard input-output norms have not been published the quantitative norms will be as specified by the competent authority."
9. Considering the aforesaid paragraphs of the Import & Export Policy, it is apparent that to the Petitioners quantity based Advance Licence was given on the condition of fulfilling their export obligations as stated in the Advance Licence. With regard to export there is no dispute. Paragraph 51 of the Export & Import Policy specifically provides that in respect of quantity based Advance Licences for which standard input-output norms have not been published, the quantitative norms will be as specified by the competent authority. On the basis of the said policy after considering the petitioners Application and after verifying the facts from them the Petitioners were given Advance Licence by reducing the quantity and also amount. One of the conditions of the said Licence is as under :
"(i) 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 upto and including the date of issue of the licence, unless otherwise specified."
This term itself indicates that the relevant date for grant of Advance Licence is the date of issue of licence and the licence was only subject to the conditions relating to the goods covered by the licence or amendment thereof made upto and including the date of issue of the licence unless otherwise specified. Therefore, it cannot be said that even though the Petitioners have complied with their obligation of export, when the Petitioners asked for endorsement of transferability on the basis of complying with the conditions of exporting the goods, the authority was entitled to withhold or suspend it and change the material terms of the licence, which permitted the Petitioners to import duty free goods as per the advance licence. 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, that too in cases where the Petitioners have fulfilled their export obligations. Paragraph 51 of the Export & Import Policy itself provides that where norms are not fixed the quantity norms will be as specified by the competent authority and in the present case the Competent Authority after considering the Petitioners application has granted Advance Licence in September, 1993. That licence could not be modified on the basis of the norms passed 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.
10. The ld. Counsel for the Petitioners for this purpose relied upon the observations made by the Supreme Court in the case of S.B. International Limited Etc. v. Asstt. Director General of E.T. & Ors. Etc., reported in 1996 (8) CXLT (SC) . In that case the Court was required to consider whether a vested right accruing to the Appellant for issuance of advance licences as per the value addition norm in vogue on the date of filing of the applications and whether any subsequent change in policy effected before the issuance of licences, is not applicable to such licences. In that context the Supreme Court observed as under :-
"By granting the advance licence, the Licensing authority tells the licensee I am permitting you to import raw material, components etc., of a particular value free of duties but you must export goods of a particular value (determined as per value addition norm in vogue on the date of licence) within a particular date. If you fail to do so, you will be liable to levy of penalties and other action according to law. The duty free import of raw materials etc., is permitted to enable the exporter to sell his goods abroad at a more competitive price, thereby fetching precious foreign exchange for the country. Mere making of an application does not create any right in applicant since he has no pre-existing right to such licence."
Thereafter the Court pertinently observed as under :-
"It is the date of licence that is relevant and not the date of application therefore. It is obvious that the norm (value addition norm) in vogue on the date of grant of licence shall govern the licence."
It is, therefore, obvious that grant of Advance Licence depends upon the policy prevailing as on the date of such grant. Once a licence is granted, it could not be revoked or modified merely on the ground that the value addition norm was charged. Further, even the new policy and the norms do not provide that Advance Licences granted earlier should be modified accordingly.
11. In this view of the matter, the order dated 27th June, 1994 (Exhibit ''H'') directing the Petitioners to surrender the Original Advance Licence dated 14th September, 1993 on the face of it is illegal and it is set aside. Further, the Respondents are directed to endorse the said original Advance Licence dated 14th September, 1993 for its transferability and to revalidate it for a further period of 6 months from the date of endorsement on or before 26th August, 1996. Rule made absolute with no order as to costs in view of the assurance given by the ld. Counsel for the Respondents that necessary endorsement would be made on or before 26th August, 1996.
12. In this view of the matter, the Notice issued for contempt is also discharged.
13. In view of the aforesaid order Notice of Motion No. 263 of 1995 would not survive and it stands rejected.
14. Issuance of certified copy of this judgment is expedited.
