2013 (6) TMI 64 - HC - Customs

Import of marble slabs - ISFTA - trade between India and Sri Lanka - restrictive import policy for marble on account of concerns for the domestic producers/processors of marble - held that - In view GOPAL LAL SARDA Versus UNION OF INDIA 2008 (10) TMI 373 - BOMBAY HIGH COURT it was held that, The Government could have, if it was so advised, withdrawn the concession given in the Customs Tariff Act or it could have gone in for amendment of the Treaty between India and Sri Lanka. In our opinion, the object which is specified in the affidavit defeats both the notification issued under the Customs Tariff Act, as also the provisions of the India Sri Lanka Treaty and, therefore, it cannot be said that the purpose of issuing the notification is legitimate and therefore, in our opinion, it cannot be said that the notification impugned in the present petition has been issued in public interest, because what is opposed to law cannot be said to be in public interest. If at all aggrieved from inclusion of marble/marble products in ISFTA is to have the same excluded therefrom, rather than to make it unworkable in the manner done. - set aside/quash the condition aforesaid restricting the import through the Port at Calcutta only. - Decided in favor of assessee.

Summary

Issues:
Challenge to Condition No. 2 in Schedule-1 Section XIII of Import Policy ITC (HS) 2012 regarding import of polished marble slabs from Sri Lanka under the Indo-Sri Lanka Free Trade Agreement (ISFTA) only through the Port of Calcutta.

Analysis:
1. The petitioners contested the restriction on importing polished marble slabs from Sri Lanka only through the Port of Calcutta, citing previous judgments where similar conditions were struck down. They argued that this restriction imposed unnecessary transportation burdens and violated their rights to conduct business.

2. The respondents justified the restriction by highlighting concerns for domestic marble producers in Rajasthan, stating that the marble industry is crucial for the state's economy, providing livelihood to numerous families. They mentioned that the import policy aimed to protect domestic marble by imposing conditions, although imports from Sri Lanka were allowed duty-free under ISFTA.

3. Referring to previous judgments, the Court emphasized that restricting imports to only the Port of Calcutta did not serve the intended purpose of preventing misuse or protecting domestic industries. The Court found the government's objective of denying benefits under the Customs Tariff Act illegitimate and not in public interest, as it conflicted with the provisions of the India-Sri Lanka Treaty.

4. In the absence of a satisfactory response from the respondents on the current situation, the Court concluded that if the respondents were concerned about marble imports under ISFTA, they should seek exclusion rather than making the agreement unworkable. Accordingly, the Court allowed the petition, quashing the restriction and ordering any duty collected for imports through ports other than Calcutta to be refunded to the petitioners within eight weeks.

5. The judgment highlighted the importance of aligning import policies with treaty obligations and legitimate objectives, emphasizing the need to balance domestic interests with international trade agreements. The decision aimed to uphold fair trade practices while ensuring compliance with legal provisions and protecting the rights of businesses involved in import activities.