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2023 (11) TMI 1231 - HC - CustomsChallenge the issuance of Notification No. 20/2023 - exporters precluded from exporting Non-Basmati White Rice - entered into contracts with foreign entities prior to issuance of the notification - HELD THAT - The contracts entered into by the petitioners prior to 20.07.2023 are on the premise that the export of Non-Basmati White Rice was permitted. Prima-facie, since the petitioners had entered into the contracts prior to 20.07.2023 when the export of Non-Basmati White Rice was permissible and as we find that the exemptions granted exclude the petitioners who had acted on the basis of the existing policy, following the interim order passed by the Andhra Pradesh High Court in the case of Shri Chitra Agri Exports Others Versus Union of India Others 2022 (10) TMI 1221 - ANDHRA PRADESH HIGH COURT , we are inclined to issue a similar direction. Accordingly, it is directed that the respondents shall permit the petitioners to export Non-Basmati White Rice that was stored by the petitioners at the concerned warehouses prior to 20.07.2023. This arrangement would be subject to outcome of the writ petition. The petitioners shall not claim any equity in this regard. It is made clear that in case the petitioners fail in the writ petition, the respondents would be free to take recourse to the provisions of the Customs Act, 1962 and especially Sections 113(D) and 114 thereof.
Issues involved: Challenge to Notification No. 20/2023 dated 20.07.2023 prohibiting the export of Non-Basmati White Rice; Petitioners' contention of being precluded from exporting despite prior contracts; Legal validity of the notification under Foreign Trade (Development and Regulation) Act, 1992.
Summary: Issue 1: Challenge to Notification Prohibiting Export of Non-Basmati White Rice The petitioners challenged Notification No. 20/2023 dated 20.07.2023 issued by the Directorate General of Foreign Trade, Department of Commerce, Government of India, which prohibited the export of Non-Basmati White Rice due to an amendment in the export policy. The notification came into effect immediately without transitional arrangements, allowing export only under specific conditions outlined in the notification. Issue 2: Preclusion from Export Despite Prior Contracts The petitioners, as exporters, were aggrieved by the notification as it prevented them from fulfilling contracts with foreign entities made before its issuance. They argued that their investments in fulfilling these commitments were at risk due to the sudden prohibition on exporting Non-Basmati White Rice. They sought interim relief to export based on pre-existing contracts, citing past legal precedents and judgments supporting their position. Issue 3: Legal Validity of the Notification The respondents defended the notification as a legitimate policy decision under the Foreign Trade (Development and Regulation) Act, 1992, prohibiting Non-Basmati White Rice export from 20.07.2023. They contended that the petitioners failed to meet the specified export conditions and were not entitled to relief. The respondents emphasized that the notification was lawfully issued without violating the Foreign Trade Policy, 2023. Court Decision: After considering the arguments, the court found arguable questions regarding the impact of the notification on pre-existing contracts. Citing past cases where interim relief was granted in similar circumstances, the court directed the respondents to permit the petitioners to export Non-Basmati White Rice stored before 20.07.2023, pending the final judgment. The court clarified that this permission did not establish any equity for the petitioners, and if they failed in the writ petition, the respondents could take legal action under the Customs Act, 1962. Further proceedings were scheduled for four weeks from the date of the order.
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