Case Note & Summary
The case involved an appeal against the Andhra Pradesh High Court's dismissal of a writ petition challenging the refusal of the Director General of Foreign Trade (DGFT) to endorse the transferability of three advance licenses obtained by the appellant for exporting Fresh Frozen Sea Foods. The licenses were issued under the Duty Exemption Scheme, which allowed duty-free imports for specified inputs necessary for manufacturing and exporting products. The DGFT denied the endorsement on the grounds that the licenses were incorrectly categorized under 'no norms category' instead of 'norms category', despite the fact that both categories allowed for transferability. The High Court upheld this view, leading to the appeal. The Supreme Court analyzed the provisions of the Duty Exemption Scheme and concluded that the licenses were indeed transferable regardless of their categorization. The court emphasized that the appellant's rights as a licensee were violated as no opportunity for a hearing was provided before the refusal of transferability. The court also noted that the new EXIM Policy did not introduce any inconsistencies affecting the appellant's rights. Ultimately, the Supreme Court allowed the appeal, set aside the High Court's judgment and the DGFT's order, and directed the DGFT to endorse the transferability of the licenses. No costs were awarded.
Headnote
A) Administrative Law - Transferability of Licenses - Rights of Licensee - Foreign Trade (Development & Regulation) Act, 1992, Section 5 - The court held that all duty-free licenses are transferable regardless of being in the 'norms category' or 'no norms category', and the refusal of endorsement of transferability was erroneous as no show cause notice was issued prior to the refusal. (Paras 18-20).
Issue of Consideration
Whether the refusal of endorsement of transferability of advance licenses was justified under the Duty Exemption Scheme.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's judgment and the DGFT's order, and directed the DGFT to endorse the transferability of the licenses.
Law Points
- Duty Exemption Scheme
- Transferability of Licenses
- Natural Justice
- Rights of Licensee
- EXIM Policy
