2004 (3) TMI 103 - AT - Customs

Summary

Issues: Validity and retrospective effect of Policy Circular No. 32 (RE-99)/1999-2000 by DGFT regarding ITC (HS) classification of 'dried garlic'.

The judgment before the Appellate Tribunal CESTAT, New Delhi revolved around the validity and retrospective effect of Policy Circular No. 32 (RE-99)/1999-2000 issued by the DGFT regarding the ITC (HS) classification of 'dried garlic'. The key issue was whether this circular, which introduced a moisture content condition for the classification of 'dried garlic', was valid and binding for the period 1-4-1997 to 31-3-2002, and whether it could have retrospective effect on imports made before its issuance.

The appellants had imported 'dried garlic' with water content above 10% and sought clearance under specific headings. The adjudicating authorities, relying on the circular, deemed the imported garlic not as 'dried garlic'. The appellants argued that the circular was not valid and binding, and even if applicable, it should not have retrospective effect. The Tribunal considered the power of DGFT to issue such circulars and whether it could amend policies, citing a Bombay High Court decision on DGFT's authority in issuing circulars.

The Tribunal analyzed a previous case where a similar issue of retrospective effect of policy amendments was considered. Referring to a Supreme Court judgment approving the Tribunal's decision in that case, the Tribunal concluded that the circular by DGFT could not apply to imports made before its issuance. As a result, the Tribunal held that imports made before 17-9-1999, the date of the circular, would not be governed by its terms.

In the absence of any other issues, the Tribunal set aside the impugned orders and allowed the appeals, emphasizing that the circular did not apply retrospectively to imports made before its issuance. The judgment provided a detailed analysis of the legal principles surrounding the validity and retrospective effect of policy circulars issued by the DGFT, ensuring clarity on the classification of 'dried garlic' for the specified period.