Judgment:
B.P. Jeevan Reddy, J.
1. Common question arises in this batch of writ petitions. All these writ petitions are filed by the same person, 'Hyderabad Engineering Industries' (Proprietor of Jay Engineering Works Ltd.), having its factory at Balanagar.
2. The petitioner is engaged in the manufacture of electric fans etc. The fans manufactured by it are also exported. During the period 1.4. 1976 to 31.3.1977, the petitioner did export some fans. According to the Import Trade Control Policy in force for that year, the petitioner was entitled to import replenishment on three counts. According to Serial No. A-76 of Section 2 of the Import Trade Control Policy - Vol. II (page 108), the petitioner was entitled to import replenishment at 5% mentioned in Col. 3. Besides this, he was entitled to 'Additional import replenishment at 30% of the f. o. b. value of exports.' He was entitled to import '(i) Winding Wires ; (ii) Electrical Steel Stampings' on the above counts. Besides these two counts, the petitioner was also entitled to `additional allocation' mentioned in para 15 of Section 1. Para 15 is in two clauses, which reads thus :-
'Additional allocation to strengthen the base for export production.
15(1) In respect of export products covered by the import policy for Registered Exporters for which the rate of import replacement in less than 50%, an additional allocation for an amount equal to 10% of the normal replenishment may be allowed against exports made on or after 1.4.1974.
(2) In respect of export products falling in the product groups, namely, Engineering goods, Chemicals and allied products, Leather and Leather goods, Sports goods, Handicrafts, Cotton textiles, and Readymade garments, covered by the import policy for Registered Exporters, a supplementary allocation for an amount equal to 10% of the normal replenishment may be allowed against exports made on or after 1.4.1975. This supplementary allocation will be in addition to 10% allocation allowed under sub - para (1) of this para.'
3. It is thus evident that the petitioner was entitled to import replenishment to the extent of 5% under Col. 3 of Section 2, 30% under Col. 5 of Section 2 and 20% of 5%, i.e. 1% of F. O. B. value under para 15, totalling to 36% of F. O. B. value.
4. The petitioner availed of the benefit of 5% mentioned in Column 3 of Section 2. It is no longer in question before us now.
5. In these writ petitions, the petitioner is claiming two benefits viz., the benefit of 30% additional import replenishment' under Col. 5 of Section 2 and the benefit of 1% under para 15. The petitioners applied for these benefits through his application dated 28.6.1978. This application was considered by the 1st authority, viz., the Deputy Chief Controller of Imports and Exports. By his order dated 27.7.1978, the Deputy Chief Controller rejected the petitioner's request under the following order. : -
'With reference to your letter No. HE/P/EN ... ... ... / 28-6-1978. On the above subject I regret to say that your request for grant of additional import replenishment licence cannot be considered at this stage, as you had already obtained cash assistance at normal rate of 15%. Hence, your request stands rejected.'
6. It is evident from the above order, that the petitioner's request both under para 15 as well as Col. 5 of Section 2 was rejected on the ground that the petitioner has already availed of and obtained cash assistance at normal rate of 15%. Aggreived by the said order, the petitioner preferred an appeal to the Joint Chief Controller of Imports and Exports. The appellate authority dismissed the appeal by his order dated 26.6.1979. The appellate authority dealt separately with both the claims of the petitioner and dismissed them for different reasons. The petitioner's claim under para 15 was rejected on the ground that the petitioner has `already claimed the full CA admissible on the relevant exports'. The claim under Column 5 of Section 2 was rejected on the ground that the petitioner has neither indicated his intention of claiming the additional benefits in his original application, nor did he file a separate application accompanied by requisite documents, viz. application in the prescribed form and manner duly filled in, and TR or bank draft for the appropriate amount in addition to the value of licence claimed in accordance with the policy for 1978-79 and revised statement of exports.
7. The petitioner thereupon filed a further appeal to the Chief Controller of Imports and Exports, which allowed under the order dated 17.9.1980. We are told that the full order was not communicated to the petitioner, according to prevailing practice. The order communicated to the petitioner only says that his petition has been considered and `it has been decided to admit your revision petition for review of imports subject to cut. This is subject to the condition that your case is otherwise completed and in order '. Having said so, the order advises the petitioner for appropriate action. We are told that the order communicated to the Joint Chief Controller of Imports and Exports contained certain direction with respect to the manner in which the relief to the petitioner was to be granted. Be that as it may, after receiving the order dated 17.9.1980, the petitioner approached the Joint Chief Controller of Imports and Exports, who in turn, referred the petitioner to the Deputy Chief Controller. The Deputy Chief Controller issued the additional licence dated 11.2.1981 which contains the following particulars : The licensing period is April/March, 1981, which, we are told, means 1980-81. The export period, is stated as July, 1976. F. O. B. value of export is mentioned at Rs. 15,97,871.00. The Certificate is non - transferable. The relevant entry relating to the description of goods reads as follows :-
'Col. 5 Items against S. No. A76 of AM 77 import policy book, excluding items appearing in Appendix 3, 6, 8, 9 and 15 of import policy book for AM 81'
(AM 77 and AM 81 referred to above mean 1976-77 and 1980-81 respectively).
The licence contains a further endorsement that it is revalidated for a period of six months from the date of expiry of licence subject to the condition that the licence shall not be transferable and that imported materials shall be subject to `AU Condition'.
8. On receiving this additional licence, the petitioner realised that the restrictions imposed therein would mean that he cannot import the Winding Wires of the requisite SWG. Appendix 3 of 1980-81 policy puts the winding wires below 44 SWG on the banned list. Entry 595 in Appendix 3 of 1980-81 policy reads thus :-
'Enamelled/super enamelled copper/aluminium winding wire, upto 44 SWG except self bonding/self soldering type'.
Appendix 3 contains the heading 'List of banned items'. The petitioner wanted to import winding wire of 32 to 37 SWG, which alone, according to him, is useful for his products. He had no use for winding wires of over 44 SWG. Accordingly, he made a representation dated 4.7.1981 to the Joint Chief Controller stating that the restriction imposed while issuing the additional licence is neither valid nor warranted ; he requested the authority to permit him to import the item mentioned in Col. 5 of A. 76 (Section 2) of Import Trade Control Policy 1976--77, without any restriction. He returned the Customs copy and Exchange copy of the said licence for making the necessary endorsements. After receiving this letter of the petitioner, the Joint Chief Controller replied through his letter dated 31.7.1981, that the petitioner's request cannot be considered and is rejected, inasmuch as the said licence has been issued `as per the appeal decision taken by Head Quarters'. It was also stated that the petitioner's contention that para 209 in Chapter 21 of Import Trade Control Policy for the year 1980-81 is not applicable to him is not correct. It is thereupon that the petitioner approached this Court by way of these writ petitions.
9. Mr. K. Srinivasa Murthy, learned counsel for the petitioner urged the following contentions : 1) That inasmuch as the petitioner has exported electric fans during the year 1976-77, he is entitled to import goods towards his entitlement in accordance with the said policy alone. The restrictions placed if any in subsequent years' policy (1980-81 policy) are not applicable to him. During the year 1976-77, the petitioner was entitled to import winding wires without any restriction as to gauge. Simply because such a restriction has been imposed in the year 1980-81, it cannot be applied to him. 2) In any event, all the aforesaid restrictions contained in Appendix 3 to the Import Policy 1980-81 cannot be applied to him inasmuch as the petitioner is governed by Appendix 17 to the said import policy. Appendix 17 is a self - contained appendix. It is only subject to appendix 4 which contains a list of absolutely banned goods. It is not subject to appendix 3, which deals only with banned items. Indeed, the import replenishment is granted only in respect of banned goods though not in respect of absolutely banned goods. Therefore, applying appendix 3 to the petitioner is incorrect and invalid. 3) The ground upon which the petitioner's request under para 15 of 1976-77 policy is rejected is not correct in law. 4) The licence issued to the petitioner shows that the authorities have imposed a 15% cut in terms of paras 31 and 32 of 1976-77 policy which is equally untenable.
10. For the sake of convenience, we shall first deal with contention No. 3, i.e., the one relating to para 15. We have already set out para 15 herein before. Under this paragraph, the petitioner is entitled to additional replenishment in a total of 20% of the normal replenishment, which means 20% of 5% which means 1% of the FOB value of the exports. The ground upon which the authorities have rejected the petitioner's claim on this count is that he has already received and obtained cash assistance in full. It may be noted that in 1974 - or sometime earlier thereto - the Government had evolved a scheme of cash assistance as an incentive to encourage exports. The rate of cash assistance varied from time to time. By its letter dated 9th May, 1974 received from the office of Director (Export Assistance) Ministry of Commerce, New Delhi it was stated that in respect of export products covered by the import policy for registered exporters for which the rate of import replenishment is less than 50% on imports made on or after 1.4.1974, additional allocation for an amount equal to 10% of normal replenishment is allowed in terms of para 15. It was then stated that `there would be corresponding reduction in the cash assistance rate, the product exported, enjoyed the facility of cash assistance in terms of the instrument, in cases made the exporters opt for additional imports in terms of products contained in the import trade control published notice No. 46-ITC(PN)/74 dated 2nd April, 1974 referred to above.' The next paragraph set out the formula to implement the above direction. A reading of the letter shows that if a person avails of the benefit under para 15, the cash assistance would be reduced correspondingly. Evidentaly, the letter was issued on the assumption that the person would first avails of the benefit under para 15 and then apply for cash assistance. In such a case, the letter provided for corresponding reduction in the cash assistance. What happened in this case is that the petitioner first obtained the cash assistance in full and thereafter he came forward claiming the benefit under para 15. The authorities said, he cannot do that and we agree with him. It is evident from the letter aforesaid that a person cannot simultaneously claim the full cash assistance as well as the benefit under para 15. To the extent he avails of the benefit under para 15, cash assistance is reduced. If so, the petitioner having availed of the cash assistance in full cannot thereafter claim the benefit under para 15 in any measure. We are, therefore, of the opinion that the claim of the petitioner under para 15 should fail.
11. For the sake of convenience, we may also dispose of contention No. 4 urged by Mr. Srinivasa Murthy. According to paras 31 and 32 of Section 1 Part - E of Vol. 2 of 1976-77 Import Trade Control Policy, 'an application for import replenishment licence should be made, complete in all respect, so as to reach the licensing authorities concerned within a period of three months from the end of the period of export'. It is further provided that applications can also be filed or the deficiencies in the application already filed can be removed within the next three months. But applications received after the period of six months shall be rejected. However, the licensing authorities are empowered to consider even such applications (received after six months) provided, the authorities are satisfied that the applicant was unable to submit this application in time for reasons beyond his control. In such a case, the authority shall impose an appropriate cut as provided in the said paras. The quantum of cut depends upon the length of delay. In case the application is received after a period of 18 months, but within 24 months, the cut to be imposed is 15% cut. In this case, admittedly the petitioner did not file his application within the first three months or within the next three months. His application was filed after the expiry of 18 months but within 24 months. Such an application was liable to be rejected in lemini. Of course, the authorities were empowered to examine the said application on merits provided they were satisfied, the applicant had a reasonable cause for not filing the application within time. In this case, it may be noted, that none of the three authorities have chosen to reject the petitioner's application on the ground that it is filed beyond six months. Both the original and the 1st appellate authority rejected the claim on merits, and not on the ground of delay. The Chief Controller indeed allowed the revision, in which case we must presume that he was satisfied that the applicant had sufficient cause for not filing the application within time. Probably, for this reason, he imposed a cut of 15%, but as we shall presently indicate, this aspect has no relevance, in the facts and circumstances of this case. It is, therefore, unnecessary to pursue this contention of Mr. Srinivasa Murthy, any further.
12. Coming to the main contentions of Mr. Srinivasa Murthy, i.e., contentions 1 and 2 mentioned above, we may reiterate the relevant facts. The petitioner exported electric fans during the year 1976-77. He availed of the import replenishment to the extent of 5% mentioned in Col. 3 of Section 2 of the relevant policy, during that period itself. He did not avail of the additional import replenishment benefit at 30% of the FOB value of exports under Col. 5 of Section 2 till 20.8.1968, on which date he applied for that benefit. (His claim for benefit under para 15 has already been rejected by us and needs no further mention.) This claim was ultimately allowed by the Chief Controller of Imports and Exports, but subject to a restriction. The restriction imposed was that the licence issued did not permit him to import items appearing in appendices 3, 6, 9 and 15 of 1981 policy. As we have already stated, item 595 of appendix 3 prohibited import of winding wires below 44 SWG, and the petitioner wants to import winding wires of less than that gauge, i.e. of 32 to 37 SWG. This restriction is the main point of grievance in these writ petitions.
13. We must first refer to para 209 in Chapter 21 of Import Policy 1980- 81 in this behalf. Para 209 reads as follows :-
' 209. In respect of REP applications pertaining to exports made prior to 1.4.1978, where the licence is issued on or after 15.4.1980, the rate of import replenishment and the items of import will be as laid down in the relevant period policy minus the items appearing in Appendices 3, 6, 8 and 9 of the Import Policy, 1980--81. The exporter will, however, have the option to claim both the import replenishment rate as well as the items of import, in terms of the Import Policy,m 1980--81 in toto, unless he had exercised his option for the 1978-79 Policy, under para 211 of that Policy or opted for 1979-80 policy under para 208 of that policy (Cases in which options have been thus exercised under the said para 211 for the Import Policy, 1978-79 or para 208 of Import Policy 1979-80 will be eligible to obtain licences only in accordance with that option).'
A reading of para 209 shows that it is in two parts. The first part says that where certain goods are exported prior to 1.4.1978, but licence issued after 15.4.1980, both the rate of import replenishment as well as items of import will be in accordance with the import policy in force during the year of export minus the items appearing in appendices 3, 6, 8 and 9 of 1980--81 policy. (It is following this part, that the licence has been issued to the petitioner). The second part, however, says that unless the exporter has already opted for 1978-79 policy or 1979-80 policy, he will be entitled to opt for the 1980-81 policy in toto, i.e., both in respect of rate of replenishment as well as items of import. Now, the petitioner's contention is that he did not opt for 1978-79 policy or for that matter 1979-80 policy, and is, therefore, entitled to opt for 1980-81 policy in toto. In fact, that is the prayer in the writ petition. The learned Standing Counsel for Central Government could not put forward any valid objection to this course. We are of the opinion that under the second part of para 209, the petitioner is entitled to opt to be governed by 1980-81 policy in toto. In such a case, the first part of para 209 does not apply. But the question then arises, what is the petitioner entitled to, in terms of 1980-81 policy.
14. 1980-81 policy no doubt contains appendix 3 -- list of banned items. It is equally true that item 595 of appendix 3 prohibits the import of winding wire upto 44 SWG. But, in our opinion, appendix 3 has no application to the petitioner, since he is governed by appendix 17 alone. This fact is also not disputed before us by the learned Addl. standing counsel for Central Government. Now, let us examine appendix 17. Para 5 of appendix 17 reads thus :-
'5. No import of an item appearing in Appendix 4 (Absolute Banned List) shall be allowed against REP licences eligible to import `banned items' in accordance with Col. 4 or Col. 5 hereunder, except if such Absolute Banned Item is specially described for import either under Col. 4 or under Col. 5 or against an Advance Licence issued under this policy.'
A reading of para 5 shows that the benefit of import replenishment granted by the said appendix is subject only to appendix 4 (absolute banned list). By necessary inference this means that appendix 17 is not subject to appendix 3. Indeed, the argument of Mr. Srinivasa Murthy is that unless the import replenishment is in respect of goods contained in appendix 3, the benefit of import replenishment has no meaning, for, the items not banned can be imported by anyone. Be that as it may, since it is admitted before us that to the extent a person is governed by appendix 17, the prohibition contained in appendix 3 does not apply to him, it is unnecessary to pursue the above line of reasoning any further. Serial No. 827 of appendix 17 relates to electric fans and the percentage of import replenishment is 20%. Pausing here for a moment, we may mention that the very method and rate of replenishment has undergone a change. For the year 1976-77, the import replenishment was provided under three counts totalling to 36%, whereas for the year 1980-81 the import replenishment is only under one count, i.e., the one provided in Col. 3 of appendix 17, and it is to the extent of 20% alone. It cannot be more than 20% in any event. Now, coming to Col. 4 of appendix 17, it mentions the goods which can be imported. The relevant entry in Col. 4 inter alia permits import of '(b) winding wires'.
15. What needs emphasis is that according to appendix 17, a person exporting electric fans is entitled to import winding wires without any restriction upon their gauge to the extent of 20% of the FOB value of exports. This means that the restriction imposed in the licence issued to the petitioner with reference to appendix 3 is inappropriate and inapplicable. Since the petitioner has opted to be governed by 1980-81 import policy, no restriction can be placed upon the gauge of winding wires which he has already availed of 5%, the import entitlement licence to be issued hereafter shall be confined only to 15% of the FOB value of his exports.
16. Accordingly, the writ petitions are allowed partly, A direction shall issue to the respondents to issue an additional import replenishment licence in terms of Appendix 17 to 1980-81 Import Policy to the extent of 15% of the FOB value of exports effected by the petitioner during the year 1976-77. His claim for extending the benefit under para 15 of 1976-77 import trade control policy (1% of FOB value of exports) is rejected. There shall be no order as to costs.
17. We may clarify that in this batch, there are nine writ petitions. Mr. Srinivasa Murthy explains that nine writ petitions had to be filed, because 9 licences were issued by the authorities with the restrictions aforesaid. But all of them pertain to the same period and are all identically situated. Therefore, the direction issued herein above, will apply to all the licences already issued. The licences already issued shall be corrected and reissued in accordance with the above direction.
18. Mr. Srinivasa Murthy lastly requests that the licences to be now issued in pursuance of this Court's direction, should be revalidated for a period of 12 months, instead of 6 months. While we do not wish to express any opinion on this request, the authorities shall examine the same, and, if it is permissible to revalidate the licence for a period more than six months in accordance with 1980-81 import policy, the authorities shall consider the said request in the light of the facts and circumstances of this case. The directions contained herein shall be carried out as expeditiously as possible.