2020 (4) TMI 318 - HC - Customs

Scope of the term Animal Feed - Permission to import Grain De Cotton (Cotton Grain) for cattle feed consumption without insisting on the amendment under Notification dated 27.12.2017 - restricted import or not - Advance License Scheme - principles of natural justice - HELD THAT - In the present case, no study has been conducted nor is there any reasonable ground for placing restrictions on the import of animal feed. The entire decision to amend the definition of animal feed in the Plant Quarantine Order is based merely on apprehensions voiced by Plant Quarantine Officers and is not based on any substantial material, study or past experience. As noticed earlier, the provisions of the Plant Quarantine Order provide for sufficient safeguards for the import of animal feed under Schedule VII thereof. In the opinion of this court, therefore, merely by dint of the fact that the Plant Quarantine Officers have some apprehensions or with a view to overcome such situation, the amendment in Entry No.19 of Schedule VII, which causes immense hardships to the importers and has brought such imports to a virtual standstill as the exporting countries do not export cotton grains in kibbled-crushed seeds/ pellets/ dried cake form, is not warranted, inasmuch as it places unreasonable restrictions on the import of cotton grains as animal feed despite the fact that import of such goods is unrestricted under the Foreign Trade Policy and the Customs Act. In the present case, it is evident that the reason behind the introduction of a larger definition of animal feed in Entry No.19 of Schedule-VII is merely with a view to overcome a situation, as reflected in the Draft Notification, and is not backed by any research or study which establishes that the import of cotton grains as animal feed has caused any kind of threat to the plants/plant species, as reflected in the affidavit in reply filed on behalf of the respondents. Thus, the decision to restrict the import of animal feed to kibbled/crushed seeds/ pellets/ dried cake form, which restricts the import of cotton grain as animal feed, is arbitrary or irrational and is not backed by any sound reason and renders such decision unsustainable. The impugned Notification dated 27.12.2017 to the extent the same defines Animal Feed as kibbled-crushed seeds/pellet/dried cake form is quashed and set aside - Petition allowed - decided in favor of petitioner.

Summary

Issues Involved:
1. Legality of the Notification dated 27.12.2017 defining "Animal Feed" under the Plant Quarantine Order (Regulation Of Import Into India), 2003.
2. Petitioner's right to import "Grain De Cotton" (Cotton Grain) for cattle feed consumption without restrictions.
3. Whether the Plant Quarantine Order's amendment is arbitrary and without authority of law.

Detailed Analysis:

1. Legality of the Notification dated 27.12.2017:
The petitioner challenged the Notification dated 27.12.2017, which amended the definition of "Animal Feed" in the Plant Quarantine Order to mean "kibbled-crushed seeds/pellet/dried cake form thereby denatured and free from weed seeds, bacterial and fungal pathogens." The petitioner argued that this amendment was arbitrary and not backed by any substantial material, study, or past experience. The court observed that the amendment was introduced merely to overcome situations where Plant Quarantine Officers were not convinced about the final use of cotton seeds and initiated actions to deport/destroy consignments, leading importers to seek court relief. The court found that the amendment was not based on any Pest Risk Analysis or any reasonable ground for placing such restrictions, making it arbitrary and irrational.

2. Petitioner's Right to Import "Grain De Cotton":
The petitioner, a regular importer of agricultural products, sought to import "Grain De Cotton" for cattle feed consumption. The import was initially cleared by Customs with all relevant documents, including a Phytosanitary Certificate. However, the Plant Protection Officer held the consignment, citing the absence of notification for "Cotton Seed for animal feed consumption" in the Plant Quarantine Order. The court noted that cotton seeds for animal consumption fall under Schedule VII of the Plant Quarantine Order, which allows imports based on a Phytosanitary Certificate, inspection, and fumigation if required. The court concluded that the respondents' contention that cotton grains could not be imported as animal feed was not valid, as the Plant Quarantine Order already provided sufficient safeguards.

3. Arbitrariness of the Plant Quarantine Order's Amendment:
The court held that the amendment to the definition of "Animal Feed" was not backed by any substantial material or study. The sole reason for the amendment was to address the Plant Quarantine Officers' apprehensions about the final use of cotton seeds. The court found this reasoning insufficient to justify the restrictions imposed, which caused immense hardships to importers and brought such imports to a virtual standstill. The court emphasized that policy decisions must be backed by sound reasons and not be arbitrary or irrational. The court quashed the impugned notification to the extent it defined "Animal Feed" as "kibbled-crushed seeds/pellet/dried cake form."

Conclusion:
The court allowed the petition, quashing the Notification dated 27.12.2017 to the extent it defined "Animal Feed" in a restrictive manner. The court permitted importers to import cotton grains for animal feed, subject to germination and Phytosanitary tests to ensure compliance with safety standards. The court's decision emphasized the need for policy decisions to be backed by substantial material and reasonable grounds, ensuring they are not arbitrary or irrational.