2019 (4) TMI 344 - HC - Customs

Import of restricted item or not - Peas - case of petitioner is that there was no restriction on peas import from 1 st July, 2018 till 29 th August, 2018 and import of peas with bills of lading on and between these dates should be allowed to be cleared by the Customs and the Directorate General of Foreign Trade - petitioner argues that the policy has been amended by respondent no.2 (DGFT) and it had no jurisdiction to amend it. Held that - In paras 21, 22 and 23 of the affidavit in reply, the legal position is clarified and summarised in para 30 by urging that the notification has already been issued by the Central Government and not by the DGFT. The DGFT has only signed the notification on behalf of the Central Government. A perusal of all the notifications in the field leaves us in no manner of doubt that it is the Central Government which has made the amendments and all that the DGFT has done is to make the amendments in the import policy of peas under Chapter 7 of the ITC(HS), 2017, Schedule 1 (Import Policy). The second contention is that there was a restriction imposed by Notification No.15/2015-2020 dated 2nd July, 2018 on import of peas, but that was withdrawn by the second respondent by notification of 29th August, 2018. In view thereof, there is no restriction in force during the period 1st July, 2018 to 29th August, 2018 and the purported restriction was imposed only from 30th August, 2018. At the time of the import of goods i.e. on 28th August, 2018, no restriction was prevailing and not permitting clearance of imported goods is unsustainable. Once the notification of 25th April, 2018 is extended till 30th September, 2018 and the notification of 29th August, 2018 not wiping out the restriction as projected, but promptly restoring the earlier notifications and continuing the restriction till 30th September, 2018, further extending it by the notification at Exhibit B till 31st December, 2018, makes the position clear. There was a restriction and insofar as that notification continuing the restriction till 30th September, 2018 having been withdrawn does not mean that the restriction is not in place. The restriction is continuing and withdrawal of the notification will not have that effect as urged by Mr.Shah. The respondents committed no error in refusing to take note of the representation dated 4th December, 2018, copy of which is at Exhibit M to the petition. That representation is based on an incorrect and improper understanding of the notifications as well as the provisions of the Customs Act, 1962 - petition fails and is thus dismissed.

Summary

Issues Involved:
1. Legality of Notifications No. 32/2015-2020 and No. 37/2015-2020.
2. Requirement of Special Import Licence (SIL) for clearance of imported goods.
3. Applicability of transitional provisions under the Foreign Trade Policy (FTP).
4. Impact of withdrawal and reissuance of notifications on the import policy.

Detailed Analysis:

1. Legality of Notifications No. 32/2015-2020 and No. 37/2015-2020:
The petitioners challenged the legality of Notifications No. 32/2015-2020 dated 30.08.2018 and No. 37/2015-2020 dated 28.09.2018, which imposed and extended restrictions on the import of peas. The respondents argued that these notifications were policy decisions made in public interest to safeguard the interests of domestic farmers, as large imports of peas were adversely impacting local prices. The court held that these notifications were valid as they were issued by the Central Government under Section 3 of the Foreign Trade (Development and Regulation) Act, 1992, and were aimed at balancing the interests of domestic producers and importers.

2. Requirement of Special Import Licence (SIL) for Clearance of Imported Goods:
The petitioners contended that they were orally informed that clearance of their imported goods would only be allowed upon producing a Special Import Licence (SIL). The respondents maintained that the import of peas was restricted under various notifications, and without the SIL, the import was impermissible. The court upheld the respondents' stance, stating that the requirement for SIL was in line with the restrictions imposed by the notifications.

3. Applicability of Transitional Provisions under the Foreign Trade Policy (FTP):
The petitioners argued that there was no restriction on the import of peas from 1st July 2018 to 29th August 2018, and therefore, their import should be allowed under the transitional provisions of the FTP. They relied on paragraph 1.05(b) of the FTP, which permits the import of restricted goods if the shipment is made before the imposition of such restriction. The court noted that the bill of lading for the petitioners' goods was dated 28th August 2018, and the restriction was imposed on 30th August 2018. However, the court clarified that the restriction was in place during the period in question due to the notifications, and the transitional provisions did not apply as the restriction was already effective.

4. Impact of Withdrawal and Reissuance of Notifications on the Import Policy:
The petitioners claimed that the withdrawal of Notification No. 15/2015-2020 on 29th August 2018 meant there was no restriction on the import of peas until 30th August 2018. The court examined the sequence of notifications and concluded that the restriction on the import of peas was continuous. The withdrawal of the notification on 29th August 2018 did not nullify the restriction, as it was promptly reinstated by Notification No. 32/2015-2020 on 30th August 2018. The court rejected the petitioners' argument, stating that the restriction was effective throughout the period in question.

Conclusion:
The court dismissed the writ petition, upholding the validity of the notifications and the requirement for a Special Import Licence. It clarified that the transitional provisions of the FTP did not apply, as the restriction on the import of peas was continuous and effective during the relevant period. The court emphasized that the policy decisions were made in public interest to protect domestic farmers and were within the legal framework provided by the Foreign Trade (Development and Regulation) Act, 1992.