2018 (10) TMI 116 - HC - Customs

Duty Free Import Authorisation Scheme (DFIA) - Application for second extension of validity of the Duty Free Import Authorisation - rejection on the ground that the petitioner was unable to establish a case of genuine hardship - Held that - As is apparent from the plain language of the Paragraph 2.58 of the FTP, the DGFT is empowered to grant exemption, relaxation or relief from the provisions of FTP or any procedure if he so deems fit. However, it is important to note that such exemption, relaxation or relief can be only granted if it is in public interest and on the grounds of genuine hardship and adverse impact on trade - In the present case, the PRC had considered the petitioner s request and had concluded that the petitioner had not established a case of genuine hardship. Whether, in the facts of the present case, the decision of the PRC is arbitrary or unreasonable and warrants interference in these proceedings? - Held that - The discretion to relax the conditions of the FTP/HBP rests with the PRC and not this Court. Therefore, the scope of judicial review of the decisions of the PRC is limited. Unless the petitioner is able to establish that the decision of the PRC was perverse, arbitrary, capricious or unreasonable or otherwise contrary to the statutory framework, no interference with such decision would be permissible - It is, at once, clear that the petitioner had not set up a case of any unexpected hardship or any emergent situation that had precluded the petitioner from completing the imports. Essentially, the petitioner had sought extension of the Duty Free Import Authorization on the ground of commercial expediency. The PRC was of the view that since the petitioner had not set up a case of genuine hardship, it was not entitled to any relaxation in terms of Paragraph 2.58 of the FTP - This Court is unable to accept that the said decision is arbitrary, unreasonable or otherwise falls foul of Article 14 of the Constitution of India. Whether the petitioner had been afforded sufficient time to comply with the import obligations for completing the imports under the Duty Free Import Authorization? - Held that - The petitioner had obtained an import authorization which remained valid for twenty-four months. The DGFT noted that, in this manner, the petitioner had secured a Duty Free Import Authorization which was valid for a period longer than those issued to other exporters. Also, the petitioner had not made out a case of genuine hardship. Petition dismissed.

Summary

Issues:
1. Impugning orders dated 23.02.2016, 06.09.2016, and 06.07.2017 by Policy Relaxation Committee and Director General of Foreign Trade.
2. Extension of validity of Duty Free Import Authorisation.
3. Genuine hardship and adverse impact on trade.
4. Discretionary powers of the Policy Relaxation Committee.
5. Judicial review of decisions by the Committee.
6. Compliance with import obligations under Duty Free Import Authorization.
7. Consideration of genuine hardship by authorities.
8. Extension of import authorization period.
9. Reasons for rejection of extension requests.
10. Interpretation of relevant Foreign Trade Policy provisions.

Analysis:
The petitioner sought extension of the Duty Free Import Authorization due to volatile global markets affecting material procurement. However, the Policy Relaxation Committee (PRC) rejected the request, citing lack of genuine hardship. The PRC's decision was upheld as it was within its discretionary powers, as observed in previous judgments. The court found the decision not arbitrary or unreasonable, emphasizing the limited scope of judicial review over PRC decisions. Additionally, the Directorate General of Foreign Trade (DGFT) noted the petitioner had ample time to fulfill import obligations and had received longer validity than other exporters. The DGFT's decision, based on lack of genuine hardship, was deemed reasonable. The court dismissed the petition, upholding the decisions of the PRC and DGFT. The judgment highlighted the importance of genuine hardship and adherence to Foreign Trade Policy provisions in granting extensions.

In conclusion, the judgment addressed the petitioner's extension request for Duty Free Import Authorization, emphasizing the need for genuine hardship and adherence to policy provisions. The discretionary powers of the PRC and DGFT were upheld, with decisions deemed reasonable based on lack of unforeseen hardship. The court's analysis focused on the petitioner's failure to demonstrate genuine hardship, leading to the dismissal of the petition and affirmation of the authorities' decisions.