Full Judgment Text
$~7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 18.07.2016
+ LPA 503/2009
TIMKEN INDIA LIMITED ..... Appellant
Through: Mr.A.N.Haksar, Sr. Advocate with
Mr. Aditya Tiwari & Mr.Sahil
Chopra, Advocates.
Versus
UNION OF INDIA AND ORS ..... Respondent
Through: Mr.Anil Soni, CGSC
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J.(ORAL)
1. The present appeal is filed seeking to impugn the judgment of the
learned Single Judge dated 11.08.2009 by which judgment the writ petition
of the appellant was dismissed. The appellant filed the writ petition seeking
an appropriate writ for quashing the impugned orders passed by respondents
No.3/Zonal Director General of Foreign Trade, Department of Commerce
dated 13.07.2006 and order dated 17.04.2007 passed by the Grievance
Redressal Committee of respondent No.2 denying the benefits of Rs. 4.6
crores for the year 2004-2005 to the appellant under the Target Plus Scheme
notified by respondent No. 1 under the Foreign Trade Policy. The appellant
also sought to quash order dated 13.09.2006 passed by respondent No. 3
rejecting the application of the appellant for renewal of the Status Certificate
LPA No.503/2009 Page 1 of 12
for year 2004-06 made by the appellant under the provisions of the Foreign
Trade Policy 2004-2009.
2. The brief facts which led to filing of the writ petition are that the
petitioner is stated to be engaged in the manufacture of Tapered Roller
Bearings including components thereof at its plant at Jamshedpur,
Jharkhand. The said Tapered Roller Bearings are manufactured out of
imported and indigenously procured inputs. The appellant caters to both
domestic and export markets.
3. In exercise of powers under Section 5 of the Foreign Trade
(Development and Regulation Act), 1992, respondent No.1 notified the
Policy of 2002 which came into effect from 01.04.2002. The appellant was a
“Status Holder”, having achieved prescribed level of export under the
policy in force before the Policy of 2002. In terms of the provisions of para
3.7.4 of the said Policy of 2002, the validity of the Certificate of
Recognition dated 15.02.2001 issued in favour of the appellant was
extended from 31.03.2003 to 31.03.2004. As per para 3.2 of the Handbook,
an application for renewal of status certificate had to be filed before
01.03.2005.
4. On 31.08.2004, a new Foreign Trade Policy 2004-2009 including the
new Handbook was notified by respondent No.1 w.e.f. 01.09.2004. It is
contended that the appellant‟s status as an Export House was automatically
converted/elevated to a one Star Export House under the new Policy. The
said Policy of 2004 introduced a new export promotion Scheme called
“Target Plus Scheme” under para 3.7 of Chapter 3 of the Policy. The
objective of the Scheme was to accelerate growth in exports by rewarding
Star Export Houses who have achieved a quantum growth in exports. It is
LPA No.503/2009 Page 2 of 12
averred that the eligibility criteria to avail benefits under the said Target Plus
Scheme was to register a 20% incremental growth in export proceeds in the
current year from the previous licensing year and to achieve a minimum
export turnover in free foreign exchange of Rs. 10 crores. It is the
contention of the appellant that it fulfilled this eligibility criterion as its
export turnover increased from Rs.74 crores (2003-2004) to Rs.121 crores
(2004-2005) which was more than 25% growth of export turnover than the
previous financial year. As per para 3.2.5 of the Handbook to the new
Policy, the last date for referring an application to avail the benefits under
the Scheme was 31.12.2005 which stood extended upto 31.03.2006.
5. The appellant filed an application on 28.06.2006 claiming benefits
under the Target Plus Scheme. However, respondent No.3 vide its letter
dated 13.07.2006 rejected the application of the appellant stating that the
appellant was not a Status Holder during the period 2004-2005 and hence,
its case cannot be considered. It is averred that the appellant without
prejudice to its contention that in terms of the Policy, was required to be and
was a Status Holder on the date of making the application for such benefits,
the appellant on 24.08.2006 filed an application before respondent No.3
seeking extension/renewal of his Status Certificate for the years 2004-2006
and condonation of delay for referring the said application. By its order
dated 13.09.2006, respondent No.3 rejected the said application of the
appellant on the ground that the request for renewal of Status Certificate was
not made within the stipulated period.
6. The appellant thereafter filed a representation before respondent No.2
praying for a direction to respondent No.3 to issue the requisite renewal of
Status Certificates for the period 01.04.2004 to 31.03.2006 based upon the
LPA No.503/2009 Page 3 of 12
export performance of the appellant and to condone the delay which has
occurred. The Grievance Redressal Committee of respondent No.2 however
passed an order on 17.04.2007 rejecting the representation of the appellant.
7. The learned Single Judge by the impugned judgment dated
11.08.2009 noted that as per the Handbook, the appellant was required to
apply for the Status Certificate on or before 31.03.2005 and 31.03.2006. No
such application was made by the appellant. The order further holds that as
the appellant was not a Star Export House as defined in the Exim Policy for
the period 2002-2007 for the relevant period i.e. 31.03.2005 and 31.03.2006
inasmuch as it was not registered or recognized as a Star Export House in
terms of paragraph 3.7.2.1 of the Exim Policy, the appellant was not entitled
to the benefits of the Target Plus Scheme and this position would not change
merely because the appellant as an exporter had achieved the requisite
export target. It was a mandatory requirement of the Scheme that the
exporter should be recognized and registered as a Star Export House during
the relevant period. The impugned order also noted that the policy does not
contain any provision for extension of time for accepting applications for
grant of Status Certificates/Star House Certificate in case of delay in filing
and hence, the time limit stipulated in the policy had to be adhered to. The
impugned order further notes that the explanation given by the appellant to
request for condonation of delay in making the application was entirely
vague and lacked substance and does not merit acceptance. The order held
that even if it is presumed that the delay in filing of the application for the
issue of Star House Certificate can be condoned, there was no justifiable
reason to condone any such delay. The delay being for two financial years
LPA No.503/2009 Page 4 of 12
was held to be substantial and the writ petition was accordingly dismissed.
Hence, the present appeal.
8. We have heard the learned senior counsel for the appellant and the
learned counsel for the respondent and gone through the records. Both the
parties have filed written submissions which we have perused.
9. Learned senior counsel for the appellant has strenuously urged that
the appellant fulfilled the necessary criteria of exports necessary for
awarding title of Star Export House and the Status holder certificate. It is
submitted that the rejection of the application of the appellant on a
procedural requirement of filing the application before a particular date was
incorrect inasmuch as the requirement was a mere formality. Reliance is
placed on Mangalore Chemicals & Fertilizers Ltd. vs. Deputy
Commissioner, AIR 1992 SC 152 . It has further been urged that the
eligibility criteria for the “Target Plus Scheme” as stated in paragraph 3.7.2
does not specify that the person who wants to avail the benefit of the Target
Plus Scheme has to be a Star Export House in the previous licensing year. It
has been urged that the application of the appellant has wrongly been
rejected, inasmuch as the appellant was a recognized Export House on the
date of filing the application for getting benefits under “Target Plus
Scheme”.
10. As per the Policy of 2002, the Status Certificates which expired on
31.03.2003 were deemed to have been extended up to 31.03.2004. The said
para 3.7.4 of the Scheme reads as follows:-
st
“3.7.4 The status certificates expired/expiring on 31 March,
st
2002/ 31 March, 2003 along with the erstwhile Golden Status
st
Certificates shall be deemed to have been extended upto 31
LPA No.503/2009 Page 5 of 12
March, 2004. However, further renewal shall be granted on
achieving the threshold limit prescribed in the policy.”
11. Para 3.2 of the policy provides that for grant of any status, the
application has to be filed before first of March. The said para 3.2 reads as
follows:-
“3.2 For grant of any status, the application shall be filed before
st
1 March. The application for Export House, Trading House,
Star Trading House and Super Star Trading House shall be filed
in Appendix-17. The application for Export House, Trading
House, Star Trading House and Super Star Trading House for
service providers shall be filed in Appendix-17A.”
12. The new Foreign Trade Policy 2004-2009 introduced the Target Plus
Scheme. The Scheme was elaborated in para 3.7 relevant portion of which
reads as follows:
“3.7 TARGET PLUS SCHEME
Objective 3.7.1 The objective of the scheme is to accelerate
growth in exports by rewarding Star Export
House who have achieved a quantum
growth in exports. High performing Star
Export House shall be entitled for a duty
credit based on incremental exports,
substantially higher than the general annual
export target fixed (Since the target fixed for
2005-06 is 17%, the lower limit of
performance for qualifying for rewards is
pegged at 20% for the current year).
Eligibility Criteria 3.7.2 All Star Export Houses (including Status
Holders as defined in Para 3.7.2.1 of Exim
Policy 2002-07) which have achieved a
minimum export turnover in free foreign
exchange of Rs.10 crores in the previous
licensing year are eligible for consideration
under the Target Plus Scheme.
LPA No.503/2009 Page 6 of 12
Entitlement 3.7.3 The entitlement under this scheme would be
contingent on the percentage incremental
growth in FOB value of exports in the
current licensing year over the previous
licensing year, as under
Percentage
incremental
Duty
Credit
Entitleme
growth
nt (as a
% of the
incremen
tal
growth)
20% and above but below
5%
25%
25% or above but
10%
below 100%
100% and above 15% (of
100%)
13. Clearly, the Scheme was applicable to Star Export Houses including
Status Holder as defined in para 3.7.2.1 of Exim Policy of 2002- 2007, who
have achieved export turnover in free foreign exchange of Rs.10 crores in
the previous licensing year apart from incremental growth as stated.
Similarly paras 3.5.1 and 3.5.2 read as follows:-
Star Export House 3.5.1 Merchant as well as
“
Manufacturer Exporters. Service
Providers, Export Oriented Units
(EOUs) and Units located in Special
Economic Zones (SEZs), Agri
Export Zone (AEZ’s), Electronic
Hardware Technology Parks
(EHTPs), Software Technology
Parks (STPs) and Bio Technology
Parks (BTPs) shall be eligible for
applying for status as Star Export
LPA No.503/2009 Page 7 of 12
Houses.
Status Category 3.5.2 The applicant shall be categorized
depending on his total FOB/FOR
export performance during the
current plus the previous three years:
Category Performance
(Rupees in Crores)
One Star Export House 15
Two Star Export House 100
Three Star Export House 500
Four Star Export House 1500
Five Star Export House 5000
14. On the issue of renewal of the Status Certificate, reference may be
had to the Clause 3.7.3 of the Policy of 2002 which reads as follows:
“3.7.3 All status certificates issued or
renewed on or after 1.4.2002 shall be
st
valid from 1 April of the licensing
year during which the application for
the grant of such recognition is made
st
upto 31 March, 2007, unless
otherwise specified. On the expiry of
such certificate, application for
renewal of status certificate shall be
required to be made within a period as
prescribed in the Handbook (Vol.I).
During the said period, the status
holder shall be eligible to claim the
usual facilities and benefits.”
15. Similarly, reference may also be had to the Clause 3.5.3 of the
Policies of 2004 which reads as follows:
“3.7.3 All status certificates issued or
renewed on or after 01.09.2002 shall
st
be valid from 1 April of the licensing
year during which the application for
LPA No.503/2009 Page 8 of 12
the grant of such recognition is made
st
upto 31 March, 2009, unless
otherwise specified.
On the expiry of such certificate,
application for renewal of status
certificate shall be required to be
made within a period as prescribed in
the Handbook (Vol.I). During the said
period, the star export house shall be
eligible to claim the usual facilities
and benefits.”
16. It would follow that making the application for categorizing the status
of the appellant was mandatory before the appellant could take the benefit of
the Target Plus Scheme. Mere fulfillment of the percentage incremental
growth per se without registration as a Star Export House/Status Holder
would not entitle the appellant to the necessary benefits under the Scheme.
This would clearly follow from paragraph 3.7.3 of the Policy of 2002 which
prescribes for filing an application for renewal of Status Certificate on
expiry of the Certificate. It also follows from paragraph 3.5.3 of the Policy
of 2004 which provides that on the expiry of Status Certificate, an
application for renewal shall be required to be made within prescribed
period. The eligibility criteria of the “Target Plus Scheme” as stated in
paragraph 3.7.2 of the Policy of 2004 also clearly provides that only Export
Houses including Status Holder can take benefit of the Scheme.
LPA No.503/2009 Page 9 of 12
17. Admittedly, in the present case the appellant has made a belated
application much beyond the period stipulated for recognition as an Export
House/Status Holder. The last date for making the application was
31.03.2005, yet the application was made on 24.08.2006. The reasons for the
delay as stated in the said application were stated as follows:-
th
“While the Company‟s Certificate of Registration dated 15
st
February 2001 was to expire on 31 March 2004 (by virtue of
st
the deemed extension vide Notification No. 3/2002-07 dated 1
May 2002) thus allowing the Company to seek renewal/grant of
st
fresh certificate by 1 March 2005, however due to oversight
st
the required application was not filed within time i.e. by 1
March, 2005. The Company however is filing the necessary
application herewith which contains the aforesaid export figures
duly certified by a Chartered Accountant. The aforesaid
application is annexed hereto.
It may be noted that during the intervening period i.e. between
st st
1 April 2004 till before 31 March 2005 the Company was
deemed as an „Export House‟ and as mentioned above
continued to make substantial exports in excess of the export
values necessary for renewal/grant of status certificate under the
EXIM Policy 2002-07.”
18. It clearly follows that the time period for seeking registration as a Star
Export House/Status Holder from 01.04.2004 to 31.03.2006 had expired
long back. The application has been filed belatedly giving vague reasons for
the delay. Learned senior counsel for the appellant has failed to point out
any provisions in the policy which permit condonation of delay in making
the application for recognition of a Star Export House/Status Holder. In the
absence of any such provision in the Scheme, it would not be possible to
accept the contentions of the appellant that the respondents were bound to
treat the delay in filing the application as a delay in fulfilling a routine
LPA No.503/2009 Page 10 of 12
procedural formality and bound to condone the delay in making the
application. Any such interpretation would lead to complete chaos as
beneficiaries of the Scheme would be able to file their applications as and
when they please without adherence to any time frame.
19. The reliance of the learned senior counsel for the appellant on the
judgment of the Supreme Court in the case of Mangalore Chemicals &
Fertilizers Ltd. v. Deputy Commissioner (supra) is misplaced. That was a
case in which notification related to package of relief and incentive
including relief from payment of sale tax. What emerged from the facts was
that that the appellant in that case was entitled to the benefit of the relief in
the respective years. It had done and carried out all that it was necessary for
it to do. The grant of permission remained on account of certain outstanding
inter departmental issues. It was in these facts, the Supreme Court held that
the appellant had nothing to do with the issues on account of which the
permission has been withheld. The court further held as follows:
“11……………………There are conditions and conditions.
Some may be substantive, mandatory and based on
considerations of policy and some others may merely belong to
the area of procedure. It will be erroneous to attach equal
importance to the non-observance of all conditions irrespective
of the purposes they were intended to serve.”
20. It was in those facts that the court allowed the appeal holding that
there are no circumstances to justify the refusal of the permission. The
judgment would not apply in the facts of the present case inasmuch as policy
specifically requires that the application for renewal has to be made.
21. The next submission of the appellant namely that the appellant was a
recognized Export House on the date of filing the application for getting
LPA No.503/2009 Page 11 of 12
benefits under “Target Plus Scheme” is again a misplaced argument. The
admitted fact is that the application was made for seeking incentive for the
period 2004-2006, the period for which certificate of the appellant had
expired. Merely because on that date the appellant was a recognized Export
House for the subsequent period after 2004-2006 would not make any
difference or help the appeal.
22. We agree with the views of the learned Single Judge. There are no
reasons to interfere in the impugned order. The present appeal is dismissed.
JAYANT NATH
JUDGE
CHIEF JUSTICE
JULY 18, 2016 /rb/v
LPA No.503/2009 Page 12 of 12