2013 (11) TMI 1623 - HC - Customs

Summary

Issues Involved:
1. Validity of notifications/circulars prohibiting DTA clearances of marble by EOUs.
2. Applicability of the Supreme Court's decision in M/s. Hindustan Granites.
3. Interpretation of FTP provisions concerning DTA sales and supplies.

Summary:

Issue 1: Validity of Notifications/Circulars Prohibiting DTA Clearances of Marble by EOUs
The petitioner, an EOU engaged in manufacturing marble products, challenged the notifications/circulars dated 2-6-2008, 26-3-2009, and 7-5-2012, which prohibited DTA clearances of marble under Paragraph 6.9(b) of the FTP 2004-2009 and 2009-2014. The petitioner argued that these prohibitions were arbitrary, unjust, and discriminatory, and contrary to the objectives of the FTP to boost foreign exchange earnings. The respondents contended that the restrictions were necessary to protect the domestic industry and prevent the misuse of imported marble for DTA sales.

Issue 2: Applicability of the Supreme Court's Decision in M/s. Hindustan Granites
The petitioner argued that the Supreme Court's decision in M/s. Hindustan Granites, which upheld the prohibition of DTA sales of marble under Paragraph 6.8, did not apply to supplies under Paragraph 6.9(b). The respondents maintained that the decision was relevant and that both provisions aimed to regulate DTA sales of marble by EOUs.

Issue 3: Interpretation of FTP Provisions Concerning DTA Sales and Supplies
The court examined the relevant provisions of the FTP and the Act, noting that the Central Government had the authority to amend the FTP in public interest. Paragraph 6.8 dealt with DTA sales of finished products, while Paragraph 6.9 addressed supplies in DTA against foreign exchange remittances. The court found that both provisions involved an element of sale and could be regulated by the Central Government. The court also noted that the impugned notifications/circulars were based on relevant considerations, including the protection of the domestic industry and prevention of misuse of imported marble.

Conclusion:
The court dismissed the petitions, holding that the impugned notifications/circulars were valid and within the authority of the Central Government. The court found no merit in the petitioner's challenges and vacated the interim orders.