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2020 (7) TMI 389 - HC - CustomsImport of poppy seeds - contracts for import of poppy seeds from Turkey - Non-registration by the respondent no.2- the Narcotics Commissioner - It is the case of the petitioners that in terms of the Foreign Trade Policy, poppy seeds are freely importable, subject only to the conditions mentioned in Clause 3, Chapter 12, Section II of Schedule 1 of the Import Policy - HELD THAT - Though described as freely importable, the import of poppy seeds is subject to the policy conditions, which inter alia restrict the countries from which such imports can be made; the requirement of such opium poppy being grown legally in that country; and the registration of the import contracts with the respondent no.2 in accordance with the Guidelines issued by the Department of Revenue, which may inter alia include fixing of the Country Cap - The National Policy on Narcotic Drugs and Psychotropic Substances , in Clause 17 provides that the import of poppy seeds will continue till self-sufficiency is achieved. Therefore, the intent of the policy is clearly to promote consumption of the domestic production. In the present case, though the Committee appointed in terms of Clause 1 of the Guidelines acknowledges the availability of 8438 MTs of poppy seeds in Turkey for exports to India, the Competent Authority has taken into account the imports allowed from China and Czechoslovakia, the domestic licit production of poppy seeds in 2019, and the expected production/availability of poppy seeds in April-May, 2020, for its decision to finalize the Country Cap at 18000 MT. Such determination cannot, therefore, be said to be arbitrary or unreasonable - In terms of Clause I of the Guidelines, the Competent Authority has to base its decision determining the Country Cap on the recommendation of the Committee constituted in terms of the said Clause. However, it cannot be said that such recommendation is binding on the Competent Authority, that is, the Department of Revenue. The Competent Authority, for germane reasons, may decide not to agree with the recommendations, as has happened in the present case. The submission of the learned counsel for the petitioners of first cum first serve principle having been followed by the respondents or the registration being made by the respondents in some arbitrary manner, cannot also be sustained - Clause 3 of the MOU between the Government of India and Government of Turkey casts a responsibility on the TMO not to register sales contract in excess of the Country Cap declared by the Government of India. It would be for the TMO therefore, to determine in what manner and following what procedure such contracts shall be registered by it. It can also not be said that the respondents have failed to discharge any duty by not inquiring from the TMO about the non-registration of petitioners contracts. In any case, the occasion for the respondents to adopt first cum first serve principle would never arise. Petition dismissed.
Issues Involved:
1. Non-registration of contracts for import of poppy seeds. 2. Determination and fixation of Country Cap for import of poppy seeds. 3. Alleged arbitrariness in the fixation of Country Cap. 4. Adherence to guidelines for registration of import contracts. 5. Alleged unfair treatment and procedural issues by the Turkish Grain Board (TMO). 6. Legal obligations and policy considerations under the Foreign Trade Policy and National Policy on Narcotic Drugs and Psychotropic Substances. Issue-wise Detailed Analysis: 1. Non-registration of contracts for import of poppy seeds: The petitioners were aggrieved by the non-registration of their contracts for importing poppy seeds from Turkey by the Narcotics Commissioner. They argued that poppy seeds are freely importable under the Foreign Trade Policy, subject to conditions requiring import contracts to be registered with the Narcotics Commissioner. Despite fulfilling all conditions, their contracts were not registered, allegedly due to the Country Cap being exceeded. 2. Determination and fixation of Country Cap for import of poppy seeds: The petitioners contended that the Country Cap should be based on the quantity of legally grown and exportable poppy seeds available in Turkey, as verified by a Committee. They argued that the Country Cap of 18000 MT fixed by the respondents was arbitrary and not in line with the recommendations of the Committee, which acknowledged the availability of 8438 MT of poppy seeds in Turkey for export. 3. Alleged arbitrariness in the fixation of Country Cap: The petitioners claimed that the fixation of the Country Cap was arbitrary and against the Foreign Trade Policy, Guidelines, and MOU between India and Turkey. They argued that the arbitrary cap not only caused financial losses to them but also led to an artificial increase in the price of poppy seeds in the domestic market. The respondents, however, maintained that the Country Cap was determined based on stock and production in Turkey, domestic production, and other relevant factors, and was not arbitrary. 4. Adherence to guidelines for registration of import contracts: The petitioners argued that the respondents were obligated to register all contracts duly registered with the TMO. They claimed that their contracts were registered by the TMO, but the respondents did not register them, possibly because the Country Cap was exceeded. The respondents countered that the contracts were not found registered on the TMO's online system, and thus, they were right in refusing registration. 5. Alleged unfair treatment and procedural issues by the Turkish Grain Board (TMO): The petitioners alleged that the TMO misled the Court by re-registering the same contracts that were registered before the declaration of the Country Cap, thereby denying them fair play and equal treatment. They argued that the respondents should have inquired from the TMO about the non-registration of their contracts. The Court noted that the registration of contracts by TMO is a matter between the exporter and TMO, and the respondents cannot influence or be concerned with this process. 6. Legal obligations and policy considerations under the Foreign Trade Policy and National Policy on Narcotic Drugs and Psychotropic Substances: The Court emphasized that the import of poppy seeds, though described as freely importable, is subject to policy conditions, including the requirement of registration of import contracts and fixing of the Country Cap. The National Policy on Narcotic Drugs and Psychotropic Substances aims to promote domestic production and achieve self-sufficiency. The Guidelines for registration of sales contracts require the Country Cap to be based on the recommendation of a Committee and stock and production data from the TMO. However, the final determination of the Country Cap is a policy decision and cannot be interfered with by the Court unless found to be arbitrary or unreasonable. Conclusion: The Court dismissed the petitions, finding no merit in the arguments of the petitioners. It held that the determination of the Country Cap by the respondents was based on relevant considerations, including domestic production and demand, and was not arbitrary. The non-registration of the petitioners' contracts was justified as they were not found registered on the TMO's online system. The Court also noted that the Guidelines and policy considerations were duly followed by the respondents.
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