2011 (7) TMI 408 - HC - Indian Laws

Restriction in export of goods - respondents (government) have banned the export casein which was made from less than 0.25% of the total milk production in the country, respondents not banned the export of the other milk products like cheese, ghee, butter etc - Held that - in case the export of Casein and Casein products of the petitioner are not allowed, it will cause irreparable loss and injury to the petitioner as the said goods cannot be re-used. It is also a fact that there is no loss of custom duty as admitted by the respondent No.3. Therefore, the balance of conveyance even otherwise lies in favour of the petitioner and against the respondents. - Export allowed.

Issues Involved:
1. Legality of Notifications No. 23 (RE-2010)/2009-2014, No. 25 (RE-2010)/2009-2014, and No. 37 E (RE-2010)/2009-2014.
2. Compliance with procedural requirements for export.
3. Validity of the prohibition on the export of casein under the notifications.
4. Interpretation of transitional provisions under the Foreign Trade Policy.
5. Legitimacy of the Customs (Appeals) order allowing export.
6. Impact of procedural delays and demurrage costs on the petitioner.
7. Application of the doctrine of legitimate expectation and promissory estoppel.

Issue-wise Detailed Analysis:

1. Legality of Notifications No. 23 (RE-2010)/2009-2014, No. 25 (RE-2010)/2009-2014, and No. 37 E (RE-2010)/2009-2014:
The petitioner challenged the notifications issued by the Director General of Foreign Trade, which prohibited the export of various milk products, including casein. The court examined whether these notifications were issued in accordance with the powers conferred by Section 5 of the Foreign Trade (Development and Regulation) Act, 1992.

2. Compliance with Procedural Requirements for Export:
The petitioner, a manufacturer of dairy products, had fulfilled all procedural requirements for the export of goods, including obtaining factory stuffing permission and presenting the goods for examination before the jurisdictional Central Excise Officers. The court noted that the goods were examined and cleared by the Central Excise Officers before the issuance of the prohibitory notifications.

3. Validity of the Prohibition on the Export of Casein under the Notifications:
The court analyzed whether the prohibition on the export of casein, as imposed by the notifications, applied to the petitioner's goods. The petitioner argued that the goods were presented for examination before the issuance of the notifications, thus falling under the transitional provisions that exempted such consignments from the prohibition.

4. Interpretation of Transitional Provisions under the Foreign Trade Policy:
The court referred to Para 9.12 of the Handbook of Procedures 2009-14, which states that changes in policy provisions should not apply to consignments already handed over to Customs for examination and subsequent export before the notification date. The court found that the petitioner's goods, examined by Central Excise Officers before the notification date, were covered under these transitional provisions.

5. Legitimacy of the Customs (Appeals) Order Allowing Export:
The Commissioner of Customs (Appeals) had allowed the petitioner's appeal, stating that the goods were presented for examination before the prohibitory notifications and thus were not subject to the export ban. The court upheld this order, noting that the presentation of goods to Central Excise Officers constituted a presentation to Customs Officers under the relevant notifications.

6. Impact of Procedural Delays and Demurrage Costs on the Petitioner:
The petitioner had incurred significant demurrage costs due to the delay in obtaining clearance for export. The court acknowledged the financial burden on the petitioner, including the loss of shelf life of the goods and the mounting interest on bank loans. The court found that the procedural delays were not attributable to the petitioner, who had complied with all necessary formalities.

7. Application of the Doctrine of Legitimate Expectation and Promissory Estoppel:
The court applied the doctrine of legitimate expectation, noting that the petitioner had a reasonable expectation of being allowed to export the goods based on prior permissions and compliance with procedural requirements. The court also considered the principle of promissory estoppel, which prevents the respondents from reneging on their implied promise to allow the export of goods already examined and cleared.

Conclusion:
The court allowed the petitioner's interim application and directed the respondents to permit the export of the goods in question. The court found that the petitioner's goods were not subject to the prohibitory notifications due to compliance with transitional provisions and procedural requirements. The court also highlighted the financial and operational hardships faced by the petitioner due to the delays and upheld the order of the Commissioner of Customs (Appeals). The writ petition was listed for further proceedings with directions for the respondents to file a counter affidavit.

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