KIRPAL - (1.) THIS judgment will dispose of appeals arising from the judgment of the High Court of Delhi which had permitted Oswal Agro Furane Ltd. (hereinafter referred to as 'Oswal Agro') to export non-basmati rice and T. C. (C) No. 15 of 1996 which was a writ petition filed by the Oswal Agro in the Punjab and Haryana High Court seeking permission to sell in the domestic market the edible rice bran oil manufactured by it.
(2.) THE Government of India Ministry of Commerce, on 3 1/12/1980 issued a notification whereby a scheme was formulated to facilitate setting up of 100% export oriented units. It was decided to give such units certain concessions so as to enable them to meet figures of foreign demand in terms of pricing, quality precision etc. Such an export oriented unit was to belong to an industry in respect of which the export potentional and export targets had been considered by the relevant Export Promotion Council. THE units which were intending to set up such industries were required to apply for approval, to the Department of Industrial Development Ministry of Industry. The Punjab State Industrial Development Corporation on 9th/ 22/07/1982, made an application to the Ministry of Industry for the grant of industrial licence to manufacture Furfural and other edible products in a 100% export oriented project. In the application it was stated that the proposed project envisaged the putting up of a composite unit, inter alia, consisting of two paddy shelling units, each having a shelling capacity of 30 tonnes per hour. The application also further stated that after shelling the rice, the rice produced on customs basis would be returned back to the paddy suppliers; the residual rice husk would be subjected to Furfural extraction and edible oil would be extracted from the rice bran obtained as a bye-product. It was stated that the edible rice bran oil so produced would be 100% import substuttion because the country was importing edible oil. On 19/05/1986, industrial licence was granted to M/s. Punjab Agro Furane Ltd., Chandigrah, which was set up by the Punjab State Industrial Corporation. The new industrial underking was to have an installed capacity of manufacturing 3000 tonnes of Furfural and 3000 tonnes of Edible Rice Bran Oil, as a bye-product. This licence was issued subject to various conditions one of which was that "the entire '100 per cent' production shall be exported." Oswal Agro entered into an agreement with the Punjab State Industrial Corporation for establishing the unit for manufacturing Furfural and as a result thereof the name of the Punjab Agro Furane Ltd. was changed to Oswal Agro Furane Ltd. On 18th May, 1987, the Government of India issued a letter by which the industrial licence dated 19/05/1986 which had been issued for the manufacture of Furfural was amended. By this amendment a number of additional conditions were included in the industrial licence. One of the conditions which was incorporated was that the rice shelling plant will not be a part of 100% export oriented project, but the Government may consider granting permission for the import of this plant subject to levy of such duties as may be decided at that time. This condition regarding the rice shelling plant was challenged by the company by filing Civil Writ petition No. 3622 of 1987 in the Punjab and Haryana High Court. By judgment Dated 2/06/1989, the High Court allowed the writ petition and held that the project was a compressive one and permission for the import of rice shelling plant had by necessary implication been granted by the Government of India and, therefore, the plant could be imported without payment of customs duty. This decision has become final as the same was not challenged by the Government of India. As a consequence thereof the rice shelling plant was imported by the respondents without payment of customs duty.
(3.) ONE more condition which was incorporated in the licence by the aforesaid letter of 18/05/1987 was condition No. (vi) which stated that "you shall also export bran oil produced in the 100% export oriented unit. If however, it is so required by the Government, you will agree to supply the said oil to an agency that will be nominated by the Government at prices not higher than the international prices." It was also by this amendment letter Dated 18/05/1987, that it was recognised that the project would be implemented by M/s. Oswal Agro Furane Ltd. The Government of India on 30/03/1988, in exercise of its powers under Sections 3 of the Imports and Exports (Control) Act, 1947, issued the Export (Control) Order, 1988. This order repealed the earlier Export (Control) Order 1977 and it came into force with immediate effect. Restriction on export of certain goods was imposed by Clause 3 of the new Order which, inter alia, stated that "Save as otherwise provided in this Order no person shall export any goods of the description specified in Schedule I, except under and in accordance with a licence granted by the Central Government or by an officer specified in Schedule II. In this order a saving clause was inserted in Clause 15. In the present appeals we are concerned with the construction of Clause 15 (1) of the Said order, which reads as follows : "15. Saving-Nothing in this Order shall apply to- (j) products manufactured in and exported from the respective Free Trade Zones and approved 100 per cent Export Oriented Units except textile items covered by bilateral arrangements." ;