2009 (4) TMI 126 - HC - Customs

Change in Export policy Contract entered into prior to change Before 9.5.2006 exports of chrome concentrate/chrome ore were freely permissible Notification issued dated 9.5.2006 to canalizing the export of chrome concentrate/chrome ore through MMTC - Petitioner submitted that the policy of canalization is ultra vires the provisions of the Foreign Trade (Development and Regulation) Act, 1992. It is submitted that it is also arbitrary and on the principles of promissory estoppel and legitimate expectation that have been accepted by the Courts in the country, the Petitioner is entitled to make the exports in terms of the contracts that it has already entered into Held that while refusing to grant interim stay, HC observed that relief prayed for by the Petitioner cannot be granted particularly since it effects the export policy of the Government and the resource sought to be exported is scarce application dismissed.

Summary

Issues:
1. Petitioner seeking permission to export chrome concentrate under specific sale contracts.
2. Legality and impact of canalization of exports of chrome concentrate/chrome ore.
3. Challenge to canalization policy under the Foreign Trade (Development and Regulation) Act, 1992.
4. Application for interim relief pending final decision in the writ petition.

Analysis:

1. The Petitioner sought permission to export chrome concentrate under sale contracts dated in 2009, based on an earlier court order. The contracts were entered into after the canalization policy came into effect, raising questions about their validity under the policy.

2. The Foreign Trade Policy initially allowed free exports of chrome concentrate/chrome ore, but due to adverse effects and limited resources, canalization was introduced through MMTC. The policy aimed to control exports, especially by 100% export-oriented units, to manage the availability of the ore domestically.

3. The Petitioner challenged the canalization policy as ultra vires the Foreign Trade (Development and Regulation) Act, 1992, arguing it was arbitrary and contrary to principles of promissory estoppel and legitimate expectation. However, the Court emphasized the executive's discretion in economic policy matters and the absence of a vested right to export, aligning with previous Supreme Court decisions.

4. Despite citing precedents challenging policy amendments, the Court dismissed the application for interim relief, noting that the final decision on the legality of the policy would be made during the writ petition hearing. The Court highlighted the significant impact of the case on government export policy and the scarcity of the exported resource as reasons for denying immediate relief.

In conclusion, the judgment upheld the canalization policy for chrome concentrate/chrome ore exports, emphasizing the executive's authority in economic matters and deferring a final decision on the policy's legality to the writ petition hearing.