2008 (9) TMI 598 - HC - Central Excise

Non speaking order - DGFT considered the writ petitioners representation and declined permission on the reasoning primarily found at paragraph 4 of the order dated July 25, 2008 which was assailed in the subsequent petition under Article 226 of the Constitution that culminated in the order under appeal - DGFT was of the view that the clause relating to transitional arrangements during the period covered by an ban of exports of certain goods, would be the only relevant provision and any relaxation beyond the powers available under clause 1.5 would not be available - It is, however, entirely different matter to find that the order did not take into account relevant considerations and to directly accord permission to the exporter to continue to execute the export orders without assessing the quality of the documents produced in support of the prayer for relaxation - Appeals are disposed of

Issues:
1. Disposal of a writ petition without calling for affidavits.
2. Permission granted to complete unexecuted part of an export order.
3. Interpretation of clauses in the Foreign Trade Policy.
4. Validity of restrictions imposed by the Director General of Foreign Trade.
5. Consideration of genuine hardship in export matters.
6. Assessment of documents supporting relaxation requests.

Issue 1: Disposal of a writ petition without calling for affidavits
The appeal challenged an order disposing of a writ petition without calling for affidavits and allowing the appellant to complete the unexecuted part of an export order. The Union argued that its version should have been heard through an affidavit before such a decision was made.

Issue 2: Permission granted to complete unexecuted export order
The writ petitioners had obtained export orders for maize, partially executed before a ban on maize export was imposed. They argued for expeditious execution due to tons of maize ready for export. The transitional arrangements under the Foreign Trade Policy were cited, especially clause 2.5 allowing exemptions based on genuine hardship and adverse trade impact. The Single Judge favored this argument.

Issue 3: Interpretation of clauses in the Foreign Trade Policy
The Director General of Foreign Trade (DGFT) declined permission to complete the export orders, citing concerns about potential malpractice. The Court found that clause 2.5 of the Foreign Trade Policy, dealing with genuine hardship, was not restricted by clause 1.5 regarding bans on exports, and the DGFT's order was not specific on malpractice by the writ petitioners.

Issue 4: Validity of restrictions imposed by the Director General of Foreign Trade
While the DGFT expressed concerns about potential misuse of export contracts during the ban, there was no specific finding of malpractice by the writ petitioners. The Court held that the DGFT's restriction on clause 2.5 was unsustainable and directed a re-consideration of the issue.

Issue 5: Consideration of genuine hardship in export matters
The Court emphasized that clause 2.5 of the Foreign Trade Policy allows consideration of genuine hardship, and the DGFT's order did not adequately address this aspect. The Court set aside the permission granted to export and directed the DGFT to re-examine the issue.

Issue 6: Assessment of documents supporting relaxation requests
The Court highlighted the importance of assessing the quality of documents supporting requests for relaxation in export matters. It overturned the part of the Single Judge's order allowing export and directed the DGFT to issue a detailed decision by a specified date.

In conclusion, the Court set aside the permission to export, directing a re-evaluation of the issue by the DGFT based on genuine hardship considerations and a thorough assessment of the documents provided.

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