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2020 (12) TMI 203 - HC - CustomsRefusal to issue Certificate of Origin to the petitioner for export of red sanders - permission to petitioner to export the same after obtaining permission/export licence for such export from the Directorate General of Foreign Trade, Ministry of Commerce and Industry, Union of India - HELD THAT - In the instant case, the Principal Chief Conservator of Forests of both States had certified in para-18 of the impugned order dt.06.12.2019 itself that the Red Sanders wood stacked in the Depot of the petitioner is genuine and the permits through which the said logs were transported by the petitioner to his Depot are also genuine - There is no dispute thus about how the petitioner procured the stock in its custody and its genuineness. So they cannot now create new grounds, not within their purview , for refusing to issue the Certificate of Origin. It is not within the jurisdiction of the Principal Chief Conservator of Forests of both States to decide whether or not petitioner, who seeks such Certificate of Origin, when the stock is in log form, would get an export licence from the DGFT/Union of India . Neither the State of Telangana nor the State of Andhra Pradesh have any business to intrude into the field occupied by the Union of India in relation to foreign trade and interfere with exercise of discretionary power by the Union of India and the Director General of Foreign Trade in matters of export policy. The issuance of Certificate of Origin to another business entity by the Principal Chief Conservator of Forests of State of Telangana, who also, like the petitioner,wanted to export in log form after allotment on condition of export in value added form the discriminatory treatment given to petitioner. Thus notwithstanding that the applicant M/s.Rocky Red Sanders Wood Musical Instruments Exports Limited had also been allotted Red Sanders for export in value added products form, its application for Certificate of Origin of stock in log form was approved and was issued by the Principal Chief Conservator of Forests, State of Telangana - We are unable to understand why the Principal Chief Conservator of Forests of the States of Telangana and the State of Andhra Pradesh have applied a different standard when it comes to the request of the petitioner for issuance of a Certificate of Origin by insisting that they will consider such request only after the petitioner agrees to convert the logs into value added product form. They cannot discriminate against the petitioner and apply a different rule to the petitioner, which was not applied by them to M/s.Rocky Red Sanders Wood Musical Instruments Exports Limited. Since the export is to take place from the State of Telangana, where the stock of Red Sanders purchased by the petitioner is stored, it has to issue the Certificate of Origin - Other than that, when the stock is genuine, its transport to the State of Telangana is validly made (as is admitted in para 18 of the impugned order dt.06.12.2019 by the Principal Chief Conservator of Forests of both States), the State of Telangana has no choice but to issue the Certificate of Origin - It cannot raise irrelevant objections about conversion into value added product form because the stock was not purchased from the said State at all. The attitude of the Principal Chief Conservator of Forests, Telangana at Hyderabad to be wholly vexatious considering the above background and arbitrary too having regard to her decision to grant Certificate of Origin to M/s. Rocky Red Sandal Wood Musical Instruments Exports vide Proceedings R.C.No.63/2020/PROD.1 dt.13.11.2020, who had also purchased Red Sanders Wood for export in value added product form and had retained it in log form and had applied for the said Certificate of Origin without changing the same into value added product form, mentioned above. No valid explanation is offered by the Government Pleader for Forest, State of Telangana for the conduct while showing discrimination to the petitioner, who is also similarly placed. The Writ Petition is allowed with costs of ₹ 10,000/- each to be paid to the petitioner by respondent nos.3 and 4; proceedings jointly issued by respondent nos.3 and 4 is declared as arbitrary and violative of Article 14 of the Constitution of India; and a consequential direction is issued to respondent nos.3 and 4 to forthwith issue Certificate of Origin to the petitioner in respect of stock of Red Sanders Wood of 1067.751 M.T. stored in the licensed godown - petition closed.
Issues Involved:
1. Refusal to issue Certificate of Origin for Red Sanders wood in log form. 2. Conditions imposed by the agreement between the petitioner and the A.P. Forest Development Corporation. 3. Change in export policy by the Directorate General of Foreign Trade (DGFT). 4. Jurisdiction of State authorities vs. Union of India in matters of foreign trade. 5. Discriminatory treatment by State authorities in issuing Certificates of Origin. 6. Judicial review of administrative decisions. Detailed Analysis: 1. Refusal to Issue Certificate of Origin for Red Sanders Wood in Log Form: The petitioner challenged the proceedings dated 06.12.2019 by the Principal Chief Conservator of Forests (HoFF) of Telangana and Andhra Pradesh, which refused to issue a Certificate of Origin for Red Sanders wood in log form. The refusal was based on the condition that the petitioner must convert the logs into value-added product form. 2. Conditions Imposed by the Agreement: The agreement dated 18.03.2013 between the petitioner and the A.P. Forest Development Corporation required the petitioner to convert the Red Sanders wood into value-added product form for export. This condition was imposed because, at the time, the DGFT did not allow the export of confiscated Red Sanders wood in log form. 3. Change in Export Policy by DGFT: The DGFT changed its policy on 24.10.2013, allowing the export of Red Sanders wood in log form. Subsequent notifications extended the deadline for such exports, with the latest extension allowing exports until 31.12.2020. The court noted that once the policy changed, the State authorities could not insist on the petitioner converting the logs into value-added product form. 4. Jurisdiction of State Authorities vs. Union of India: The court emphasized that issues of foreign trade policy fall under the exclusive purview of the Union of India and the DGFT. The State authorities had no jurisdiction to decide whether the petitioner could export the Red Sanders wood in log form. Their role was limited to verifying the genuineness of the stock and issuing the Certificate of Origin. 5. Discriminatory Treatment by State Authorities: The court found that the Principal Chief Conservator of Forests, Telangana, had issued a Certificate of Origin to another entity, M/s. Rocky Red Sandalwood Musical Instruments Exports, for exporting Red Sanders wood in log form. This demonstrated discriminatory treatment against the petitioner, who was similarly situated. 6. Judicial Review of Administrative Decisions: The court highlighted that administrative actions must be free from arbitrariness and must consider relevant factors. The refusal to issue the Certificate of Origin based on the condition to convert the logs into value-added product form was deemed arbitrary and beyond the jurisdiction of the State authorities. Conclusion: The court allowed the writ petition, declaring the proceedings dated 06.12.2019 as arbitrary and violative of Article 14 of the Constitution of India. The court directed the Principal Chief Conservator of Forests of Telangana and Andhra Pradesh to issue the Certificate of Origin to the petitioner without insisting on the conversion of the logs into value-added product form. The court also imposed costs of ?10,000 each on the respondents.
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