2020 (3) TMI 39 - HC - Customs

Grant of Duty Free Import Authorization (DFIA) - Export of Basmati Rice - It is submitted that as per para 4.29 of the Policy i.e. the Foreign Trade Policy for the year 2015-2020 in the matter of post-export, the period of import has to be calculated after the completion of the export and realisation of the proceeds - Whether PRC i.e. Policy Relaxation Committee has rightly considered the grievance of the petitioner on the anvil that the petitioner has prayed for post-export DFIA and not for pre-export DFIA? - HELD THAT - The Committee has referred to the actual user condition in its impugned decision which would apply in a case of pre-export DFIA and not in a case of post-export DFIA. Therefore, the whole complexion of the decision of the Committee has changed as it does not deal with the actual issue raised by the petitioner in its representation/application which was to be dealt with by the said Committee. In such circumstances, the Committee is required to look into this matter again with reference to the fact that the case of the petitioner is post-export DFIA and not pre-export DFIA. The matter is remanded back to the Policy Relaxation Committee to decide the same afresh - Petition allowed by way of remand.

Summary

Issues:
Challenge to the validity of the order dated 6-12-2017 by the Policy Relaxation Committee of the Directorate General of Foreign Trade.

Analysis:
The petitioner applied for Duty Free Import Authorization (DFIA) under standard input-output norms for Basmati Rice. The DFIA was issued with non-transferable condition and a specific validity period for import and export fulfillment. The petitioner later requested an extension for export limit, which was denied due to the expired license. Subsequently, the petitioner sought transferability of the DFIA to sell it in the open market. The Policy Relaxation Committee rejected the request citing non-compliance with import/export conditions and lack of genuine hardship reasons for the delay.

The petitioner argued that there are two types of DFIA - pre-export and post-export, with different import calculation criteria. The Policy for the year 2015-2020 specifies conditions for post-export DFIA, including the time frame for import after export completion and realization of proceeds. The petitioner contended that the Committee misunderstood the case as pre-export, leading to an incorrect decision.

The respondent opposed the petition, stating that the policy for 2015-2020 should not be considered, and highlighted the petitioner's lack of objections during the validity period of the DFIA. After hearing both parties, the Court found that the Committee incorrectly applied actual user conditions meant for pre-export DFIA to the post-export case. The Court concluded that the Committee needed to reevaluate the matter considering the correct nature of the petitioner's request for post-export DFIA.

Therefore, the Court allowed the writ petition, set aside the Committee's decision, and remanded the matter back to the Policy Relaxation Committee for a fresh decision, emphasizing the distinction between pre-export and post-export DFIA. The parties were directed to appear before the Committee for further proceedings.