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PETITIONER: UNION OF INDIA AND ANR.

       Vs.

RESPONDENT: SHREE GANESH STEEL ROLLINGMILLS LIMITED AND ANR.

DATE OF JUDGMENT:       17/04/1996

BENCH: JEEVAN REDDY, B.P. (J) BENCH: JEEVAN REDDY, B.P. (J) AHMAD SAGHIR S. (J)

CITATION:  JT 1996 (5)   670        1996 SCALE  (4)6

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Heard the counsel for the parties.      Leave granted.      This appeal is preferred against an interlocutory order dated 30th  May, 1994  made by the Delhi High Court in Civil Writ Petition  No.2112 of  1974. By  means of  the  impugned order the  High Court  has stayed  the operation  of  clause (iii) of para 2 of the Circular dated 19.4.94.      Tata Iron  and Steel  Company Limited  was  granted  an advance duty  free licence  on the basis of its application. The grant  was made  on 28.4.93. Tata Iron and Steel Company complied with  all  the  conditions  attached  to  the  said licence  and   thereafter   applied   for   endorsement   of transferability. On  6.9.93 the  Director General of Foreign Trade made  the endorsement  of transferability. On 17.12.93 Tata Iron  & Steel Company transferred the licence in favour of M/s.  Ferro Alloys  Limited. M/s.Ferro  Alloys Limited in turn  transferred  it  to  M/s.Mohan  Ferro  Alloys  Private Limited, from whom the respondent herein (Shree Ganesh Steel Rolling  Mills   Limited)  purchased   it  on  11.2.94.  The respondents imported goods on the basis of the said licence. At that  stage  an  objection  was  raised  by  the  customs authorities that  inasmuch as the import was made beyond six months from 6.9.93 (date of endorsement of transferability), the import is invalid; accordingly they refused to clear the goods. At  that stage,  the respondent  approached the Delhi High Court  by way  of a writ petition wherein they obtained the impugned interim orders.      Mr.A.Subba Rao,  learned  counsel  for  the  appellants assailed the  impugned order  on more  than one  ground.  He submitted that  clause (v)  of para  127  of  Hand  Book  of Procedure 1992-97  issued by  the D.G.F.T.  provided (at the relevant time  that "Duty  free  licences  on  the  date  of transfer shall  be valid  for the  balance period  of  their validity or  six months,  whichever  is  more,  provided  no revalidation has been availed." Since there was a doubt with

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respect to the meaning of the expression ’date of transfer’, it was clarified by the Directorate through a circular dated 19.4.94 that  "the automatic extension and validity shall be available   with    reference   to   the   date   on   which transferability is endorsed by the endorsing authority (vide clause (iii).  The said  circular was  issued purportedly in exercise of  the power conferred upon the D.G.F.T. by clause 20 of  the Export  and  Import  Policy  issued  the  Central Government which  says that "if any question or doubt arises in respect  of the interpretation of any provision contained in this policy, the said question or doubt shall be referred to the  Chief Controller  of Imports  and  Exports  and  his decision shall  be final".  (The Chief Controller of Imports and Exports  has  since  been  designated  as  the  Director General of  Foreign Trade).  Counsel further  submitted that the procedure  governing the  import and export is issued by the Director  General of  Foreign Trade under para 16 of the aforesaid Policy and, therefore, it was open to the Director General to  clarify the  procedure or to amend it, as may be called for.  Mr.Subba Rao also contended that the High Court was in error in granting interim orders staying clause (iii) of the aforesaid circular and that too unconditionally.      We are unable to agree with the learned counsel for the appellants on his first and main submission.      Para 16  of the  Export and  Import      Policy reads;      "The Chief  Controller  of  Imports      and Exports  may, in  any  case  or      class   of   cases,   specify   the      procedure  to  be  followed  by  an      exporter  or  importer  or  by  any      licensing,   competent   or   other      authority  for   the   purpose   of      implementing the  provisions of the      Act,  the  Rules  and  Orders  made      thereunder and  this  Policy.  Such      procedures shall be included in the      Handbook    of    Procedures    and      published  by  means  of  a  Public      Notice.  Such  procedures  may,  in      like manner,  be amended  from time      time."      A reading  of para  16 shows  that D.G.F.T. is no doubt empowered to  specify the  procedure to  be followed  in the matter of import and export but this has to be done by means of a  Public Notice. It further says that the said procedure can also be amended in like manner i.e. by means of a Public Notice. Now  it is not disputed that the clarification dated April 19,  1994 was  not by  means of  a Public  Notice. It, therefore, cannot  be read as an amendment of the procedure. The question  then is  whether  it  can  be  sustained  with reference to  the  power  of  clarification  conferred  upon D.G.F.T. by para 20 of the policy. In our opinion, the power of clarification  under para  20 of  the policy cannot go to the extent of amending the policy-but that is precisely what the Directorate  has sought  to, do by way of circular dated April 19, 1994. In the place of the words ’date of transfer’ in Para  127(v) he purported to introduce the words "date of endorsement". We  are of  the opinion that this change could not have been brought about an the name of clarification. It could have been done only by way of an amendment. It in fact was done  by a  public notice  on  28.7.94.  In  this  case, however, the  import took  place before  28.7.94. In view of the said  factual position, we need not go into the question whether the  said amended  procedure can  be applied  in the

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case of  an import  made on  or after  28th September, 1994, though on  the foot  of a licence issued earlier thereto. It is equally  unnecessary for  us in  this case to go into the question whether the six months’ period should be calculated from the  date of  first transfer  or from  the date of last transfer inasmuch as, in this case even if the period of six months’ is  calculated from  the date of first transfer, the import took place within the period of six months therefrom.      We are  however inclined to agree with the grievance of the  counsel   for  the   appellant  that   granting  of  an unconditional stay may very often tend to cause prejudice to the other  side. It  is always  advisable that  while making interim orders,  the  Court  should  provide  for  necessary safeguards for  Revenue in the eventuality of failure of the petitioner or appellant. At the interim stage, it may not be possible to  say with any definiteness that writ petition or appeal is  hound to  succeed. The  possibility of  the  writ petition or  appeal being  dismissed cannot  be ruled out at that  stage.   Therefore,  it   is  always   advisable  that sufficient safeguards  are provided  in favour  of a Revenue while making such interim orders.      The appeal is dismissed. No costs.      Since this  order  practically  disposes  of  the  Writ Petition No.2112  of 1994, the writ petition is withdrawn to this Court  from the  High Court,  with the  consent of  the counsel for  both the parties and allowed in the above terms i.e., Rule is made absolute in the above terms. No costs.