2008 (9) TMI 215 - HC - Customs

Arbitrariness and irrationality of DGFT Policy Circular No. 13 dt. 30-6-2008. - Whereas SIL for import of rough marble blocks has already been granted under Policy Circular No. 12 dt. 27-6-2008 held that both circulars are independent and to be considered on their own. Mere existence of two circulars can not be held that one circular is arbitrary and irrational specifically where about 30 persons opting policy under circular no. 12 and about 100 persons opting for benefit of circular no. 13.

Summary

Issues:
Challenge to the legality, arbitrariness, and constitutionality of certain words in a policy circular regarding import licenses for marble blocks. Petitioner's entitlement to avail import license under the circular.

Analysis:
1. The petitioner challenged certain words in Policy Circular No. 13 (RE-2008) regarding import of marble blocks, claiming it to be illegal, arbitrary, and unconstitutional. The petitioner alleged exclusion of units availing licenses under SIL category in the current licensing year, which was deemed unjust and contrary to Foreign Trade Policy. The petitioner argued for the right to choose between applying under Annexure-3 or Annexure-4. It was contended that Annexure-4 favored a specific group of entrepreneurs, excluding existing SIL license holders.

2. The respondents contended that Annexure-4 aimed to address grievances of entrepreneurs not covered under SIL Scheme, broadening the eligibility criteria after consultations. They argued against providing the option suggested by the petitioner, stating it would defeat the purpose of broadening eligible entities. The respondents denied vast differences in import quantities between Annexure-3 and Annexure-4, emphasizing the upper limit of 1.40 lakh metric tons for both circulars.

3. The petitioner's rejoinder highlighted differences in eligibility criteria between Annexures-3 and 4, based on turnover and gang saw machines. During the proceedings, applications were filed by entrepreneurs covered under Annexure-4, seeking licenses, and some license holders applied for impleadment. The court allowed the applications and heard arguments from all parties involved.

4. The court observed that Annexure-4 did not completely exclude SIL license holders from availing import licenses, ensuring continuity of entitlement. The court analyzed the arbitrariness claim, noting that the upper import limit was fixed separately under Annexure-3 and Annexure-4, without overlapping shares. The eligibility for licenses under both circulars was linked to the turnover of the firms, albeit through different calculations.

5. Ultimately, the court found no merit in the petitioner's arguments, dismissing the writ petition summarily. The court emphasized that Annexure-4 was not arbitrary or irrational, considering the broader base of eligible entities and the comparable import limits under both circulars. The court's decision was based on a thorough analysis of the policies, ensuring fairness and non-discrimination in granting import licenses for marble blocks.