Case Note & Summary
The petitioners, Neon Laboratories Limited and its director, challenged an order dated 12th May 1999 passed by the Joint Director General of Foreign Trade, Mumbai, which held that exports made by Neon under six shipping bills from 27th February 1996 to 5th November 1996 were not covered under the Pass Book Scheme of the Export and Import Policy 1992-1997. Neon, a pharmaceutical company, had obtained a Pass Book on 23rd August 1995. It exported Ampicillin Capsules and Tetracycline Capsules under the Pass Book. However, the authorities found that Neon did not manufacture these capsules itself; they were manufactured by third parties. The Pass Book Scheme required that the Pass Book holder be a manufacturer-exporter and that the exported goods be manufactured by the holder. The court examined the relevant policy provisions and concluded that the exports in question did not meet the requirement of being manufactured by the Pass Book holder. The court dismissed the petition, upholding the impugned order. The court held that the policy must be strictly interpreted and that the benefit of the Pass Book Scheme is available only for goods manufactured by the Pass Book holder. The court rejected the argument that the policy should be liberally construed in favor of the exporter.
Headnote
A) Export and Import Policy - Pass Book Scheme - Manufacture Requirement - The Pass Book Scheme under the Export and Import Policy 1992-1997 requires that the exported goods must be manufactured by the Pass Book holder. The court held that the policy clearly stipulates that the Pass Book holder must be a manufacturer-exporter, and the goods exported must be manufactured by the holder. Since the petitioner did not manufacture the exported capsules, the exports were not covered under the scheme. (Paras 1-10) B) Export and Import Policy - Interpretation - Strict Compliance - The court held that the terms of the Pass Book Scheme must be strictly complied with. The policy does not permit a Pass Book holder to export goods manufactured by third parties and claim benefits under the scheme. The court rejected the argument that the policy should be liberally construed in favor of the exporter. (Paras 5-10)
Issue of Consideration
Whether the exports of Ampicillin Capsules and Tetracycline Capsules made by the petitioner were covered under the Pass Book Scheme issued under the Export and Import Policy 1992-1997, given that the petitioner did not manufacture those products itself.
Final Decision
The court dismissed the writ petition, upholding the impugned order dated 12th May 1999. The court held that the exports of Ampicillin and Tetracycline Capsules were not covered under the Pass Book Scheme because the petitioner did not manufacture those products.
Law Points
- Pass Book Scheme
- Export and Import Policy 1992-1997
- Manufacture
- Export Obligation
- Interpretation of Policy
