2022 (9) TMI 1431 - HC - Customs

Export of broken Rice - applicability of notification bearing No.31/2015-2020 dated 08.09.2022, banning/prohibiting the export of the broken rice under HS code 1006 40.00, with effect from 09.09.2022 - HELD THAT - In similar circumstances, the Hon ble High Court of Calcutta by Judgment dated 11.08.2006 in W.P.No.966 of 2006 had directed that despite a similar prohibitory order of the Government, the petitioner therein be allowed to export red lentil to Bangladesh on the ground that the petitioner had undertaken execution of the contract for export of red lentil by purchasing the said goods in public auction and the prohibition issued under the impugned notification, before the Hon ble High Court of Calcutta, would affect the interest of the petitioner therein. In the present case, the petitioners have now produced bills showing that they have commenced the purchase of broken rice from various dealers, for the purposes of executing the sale agreement they have entered into with M/s. Capezzana Commodities Geneva. The petitioners shall be permitted to export the broken rice in pursuance of the sale agreement with M/s. Capezzana Commodities Geneva only - Post on 11.10.2022.

Summary

Issues: Export of broken rice under a prohibitory order

Analysis:
The judgment issued by the Andhra Pradesh High Court pertains to a case where the petitioners, engaged in the business of procurement and export of rice, entered into a supply agreement with M/s. Capezzana Commodities Geneva. However, their export activities were hindered by a notification issued by the 1st respondent, banning the export of broken rice under a specific HS code. The petitioners argued that this sudden notification would cause damages to their business and lead to arbitration proceedings against them in London.

The court considered a similar case decided by the High Court of Calcutta, where despite a prohibitory order, the petitioner was allowed to export goods to Bangladesh as they had already undertaken the execution of the contract. Drawing parallels, the petitioners in the present case provided evidence of initiating the purchase of broken rice from various dealers to fulfill their agreement with M/s. Capezzana Commodities Geneva.

Furthermore, the judgment highlighted previous instances where the High Court of Andhra Pradesh had granted interim directions in similar circumstances, allowing export activities to proceed. Considering the facts presented, the court granted permission to the petitioners to export the broken rice solely in accordance with their agreement with M/s. Capezzana Commodities Geneva.

In conclusion, the court's decision allowed the petitioners to continue their export activities under the specific sale agreement, despite the prohibitory notification issued by the government. The case demonstrates the court's consideration of contractual obligations and the potential impact of sudden regulatory changes on business operations.