2010 (11) TMI 167 - HC - Customs

DGFT - Import restriction - Writ petitions have been filed by importers of betel nuts, challenging Notification No. 15 (RE-2008)/2004-2009 dated 4-6-2008 issued by the Director General of Foreign Trade in the purported exercise of powers conferred by Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, incorporating the condition that import of betel nuts, whole, split, ground and others, will be permitted freely provided the CIF value is Rs. 35/- per Kilogram and above. The Central Government which can formulate export and import policy and amend the said policy - It also is evident that the power conferred on the Central Government u/s 5 cannot be delegated to the Director General of Foreign Trade appointed u/s 6 of the Act - Thus the notification has been issued by the Director General of Foreign Trade, it has to be concluded that the notification is issued without jurisdiction - As per the judgment of the Madras High Court, the Notification dated 4-6-2008 issued by the Director General of Foreign Trade is illegal and is to be set aside - Hence, writ petitions will allowed setting aside the notifications.

Summary

Issues: Challenge to Notification No. 15 (RE-2008)/2004-2009 by importers of betel nuts; Jurisdiction of Director General of Foreign Trade to issue the notification; Legality and constitutionality of the notification; Validity of the notification under the Foreign Trade (Development and Regulation) Act, 1992.

Analysis:

1. Challenge to Notification: The writ petitions were filed by importers of betel nuts challenging Notification No. 15 (RE-2008)/2004-2009 issued by the Director General of Foreign Trade. The petitioners contended that the Director General had no jurisdiction to issue the notification, and therefore, it was illegal and unconstitutional.

2. Jurisdiction of Director General: The counter affidavit filed by respondents stated that the notification was issued to protect the interests of domestic cultivators and was in public interest. However, it was argued that the power to formulate export and import policy and amend it lies with the Central Government as per the Foreign Trade (Development and Regulation) Act, 1992. The Act specifies that only the Central Government can formulate export and import policy and amend it, and this power cannot be delegated to the Director General of Foreign Trade. As the notification was issued by the Director General, it was concluded that it was issued without jurisdiction.

3. Legal Precedent: Reference was made to a judgment of the Madras High Court where a similar notification was quashed on the grounds of lack of jurisdiction. In light of the statutory provisions and the Madras High Court judgment, the Notification dated 4-6-2008 was deemed illegal and set aside.

4. Consequences: With the setting aside of the notification, the respondents were permitted to proceed against the petitioners under the provisions of the Customs Act, 1962. The writ petitions were allowed, and the respondents were given the freedom to take necessary action under the Customs Act.

5. Additional Writ Petitions: Similar notifications issued on different dates were also challenged in separate writ petitions. These notifications suffered from the same invalidity as the earlier one, and therefore, those writ petitions were also allowed, setting aside the notifications.

6. Final Clarification: It was clarified that with the setting aside of the notifications, the respondents had the liberty to proceed against the petitioners under the Customs Act if deemed necessary, ensuring legal clarity and consequences following the judgment.