2024 (12) TMI 544 - HC - Customs

Legality of the mid-year review and revision of Tariff Rate Quota (TRQ) allocations - Petitioners have not been afforded any opportunity of hearing, and without sufficient prior notice, a mid-year review of the TRQ allocations has been conducted by the Respondents - HELD THAT - In the opinion of the Court, there is significant merit in the contentions raised by the Petitioners. While Paragraph No. 7 of the Minutes of Meeting dated 15th April, 2024 does indicate that a review exercise would be conducted based on the imports up to September 2024, however, as correctly pointed out by the petitioner, this review can be deemed a blind review, given that no criteria were specified in the said Minutes with respect to the potential allocation - this public notice pertains to FY 2023-24, and there is no such public notice informing the Petitioners or the general public about such a criteria for FY 2024-25. The Court understands that the intent behind the review exercise is to ensure that the TRQ allocations are specifically adhered to. Therefore, the Respondents objective in conducting the review appears to be solely to ensure that the TRQ imports under the India-UAE CEPA are fully met - the Court is of the opinion that it would be more appropriate at this stage, without delving deep into the merits of the case, to direct the DGFT to examine all the issues raised by the Petitioners in the present petitions and issue a fresh decision on the basis thereof. Furthermore, it is undisputed that as of today, no re-allocations have been made pursuant to the impugned Minutes of Meeting in the present proceedings. Therefore, it is directed that the current allocations be maintained until a decision is made following the review process. The above exercise shall be carried out within three weeks from today. The present petitions are disposed of.

Issues Involved:

1. Legality of the mid-year review and revision of Tariff Rate Quota (TRQ) allocations.
2. Lack of opportunity for Petitioners to be heard before the revision of TRQ allocations.
3. Alleged violation of the Handbook of Procedure, 2023, concerning the validity period of licenses.
4. Petitioners' contention regarding the need for individual assessment of cases.
5. Respondents' argument on the Petitioners' failure to approach the DGFT before filing petitions.

Detailed Analysis:

1. Legality of the Mid-Year Review and Revision of TRQ Allocations:

The Petitioners challenged the mid-year review and subsequent revision of TRQ allocations for gold bullion imports under the Comprehensive Economic Partnership Agreement (CEPA) between India and UAE. The review was conducted based on the Minutes of Meeting dated 8th November 2024, which revised the TRQ allocations based on the utilization up to 30th September 2024. The Petitioners argued that the review was unreasonable and arbitrary, as it resulted in a reduction of TRQ allocations without prior notice or opportunity for them to present their case. The Court found merit in the Petitioners' contention, noting that the criteria for revision were not communicated in advance, rendering the review a 'blind' one. The Court highlighted that the public notice cited by the Respondents only pertained to the previous fiscal year and did not apply to FY 2024-25.

2. Lack of Opportunity for Petitioners to be Heard:

The Petitioners argued that they were not afforded an opportunity to be heard before the revision of TRQ allocations, which was conducted without sufficient prior notice. The Court agreed with this contention, emphasizing that the review decision was made without giving the Petitioners a chance to present their grounds. The Court directed the Director General of Foreign Trade (DGFT) to examine all issues raised by the Petitioners and issue a fresh decision after providing them with an opportunity to be heard.

3. Alleged Violation of the Handbook of Procedure, 2023:

The Petitioners contended that the mid-term review contravened the provisions of the Handbook of Procedure, 2023, which specifies a minimum validity period of 12 months for licenses. They argued that the TRQ allocations could not have been revised before the expiry of the licenses on 31st March 2025. The Court noted that the Handbook's provisions were not adequately considered in the review process and directed the DGFT to take them into account during the fresh decision-making process.

4. Petitioners' Contention Regarding the Need for Individual Assessment of Cases:

The Petitioners emphasized the need for individual assessment of cases, arguing that each case must be evaluated on its merits, considering factors that could have prevented them from meeting the criteria set in the Minutes of Meeting. The Court concurred with this view, instructing the DGFT to examine each case on its own merits and take a fresh decision accordingly.

5. Respondents' Argument on the Petitioners' Failure to Approach the DGFT:

The Respondents argued that the Petitioners should have first approached the DGFT with their grievances before filing the petitions. The Court acknowledged this point but decided that, given the circumstances, it was more appropriate to direct the DGFT to examine the issues raised by the Petitioners and issue a fresh decision.

Conclusion:

The Court directed that the current TRQ allocations be maintained until a fresh decision is made following a review process by the DGFT. The DGFT is to examine all issues raised by the Petitioners and provide them with an opportunity to be heard. The decision is to be made within three weeks, and the Court clarified that its views are of a prima facie nature, allowing the DGFT to introduce additional conditions if necessary. The petitions were disposed of with these directions.

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