2014 (9) TMI 288 - HC - Customs

Policy governing the import of khas khas or poppy seeds - import restriction - Poppy seeds or khas khas are a by-product of poppy. Poppy seeds do not constitute a narcotic substance. However, since they emanate from the poppy plant, which has narcotic properties, they are the subject matter of regulation under the EXIM policy. - Held that - Undoubtedly, neither the Manual nor the National Policy can override a document such as the Import Policy which has statutory force but, at the same time, the Narcotics Commissioner in the discharge of his functions must be guided by the role, which has been ascribed to him by both the aforesaid documents. - The statements in both these policy documents constitute a matter of high public policy for the Union Government in its stated object to combat the international trade in narcotic drugs and psychotropic substances. CBN cannot denude itself of the obligation and function which has been cast upon the Narcotics Commissioner. The discharge of the functions by the Narcotics Commissioner must be consistent with the purpose of implementing the important stipulations, which have made in the Import Policy for protecting the nation against the serious consequences of an illegal trade in poppy seeds. Insofar as the petition is concerned, the first prayer seeks strict adherence to the conditions contained in the Union Government s Notification dated 5 October, 2012. There can be no gainsaying the fact that each of the conditions contained in the notification must be scrupulously enforced. Insofar as the second prayer is concerned, there is no manner of dispute in the submissions urged before the Court by either of the parties that import of poppy seeds is permissible only from a designated country and no import can be effected from a country, which is not designated in the notification. The authorities are sufficiently vested with wide powers to ensure that the law is duly observed. - the regulation of the trade in narcotics including of those ancillaries is a matter of continuous vigil. Hence, if facts are brought to the notice of the Narcotics Commissioner or information is received even after registration of a contract which would indicate that registration has been improperly procured or is obtained on the basis of misrepresentation, fraud or illegality, the Narcotics Commissioner would be duty bound to take recourse to his powers in accordance with law.

Summary

Issues Involved:
1. Adherence to conditions in the notification dated 5 October 2012 regarding import of poppy seeds.
2. Restriction on import of poppy seeds from non-specified countries.
3. Preference for Indian farmers in the domestic market.
4. Cancellation of existing import contracts and prohibition of new ones without a proper procedure.

Issue-Wise Detailed Analysis:

1. Adherence to Conditions in the Notification Dated 5 October 2012:
The petition sought strict enforcement of the conditions in the Import Policy governing poppy seeds. The policy, amended by a notification on 5 October 2012, allows import from seventeen specified countries, mandates a certificate from the exporting country confirming licit cultivation, and requires registration of all import contracts with the Narcotics Commissioner, Central Bureau of Narcotics (CBN). The Court emphasized that these conditions must be scrupulously enforced to prevent illegal trade and ensure compliance with international obligations under the Single Convention on Narcotic Drugs, 1961.

2. Restriction on Import of Poppy Seeds from Non-Specified Countries:
The petitioner argued that imports were occurring from non-designated countries, citing data showing imports from thirty-two countries, contrary to the designated seventeen. The Court noted that CBN and Customs authorities are responsible for ensuring imports are only from designated countries and verifying certificates of origin. The Court stressed that no registration certificates have been issued for imports from non-designated countries, and any discrepancies were due to technical errors in data handling.

3. Preference for Indian Farmers in the Domestic Market:
The petition included a request for a procedure giving first preference to Indian farmers for selling their produce. However, this prayer was not pressed during arguments, and no submissions were made to support this claim. Consequently, the Court did not address this issue in detail.

4. Cancellation of Existing Import Contracts and Prohibition of New Ones Without Proper Procedure:
The petition sought cancellation of registered contracts and a halt on new registrations until a proper procedure was framed. The Court found no material basis for a general direction to cancel existing registrations. It clarified that the Narcotics Commissioner must ensure compliance with the Import Policy and is empowered to act against any fraud or misrepresentation in registrations. The Court emphasized the need for continuous vigilance in regulating the trade in narcotics and related substances.

Preliminary Objection and Maintainability:
The Court addressed a preliminary objection regarding the maintainability of the petition, noting similarities with prior petitions filed in the Delhi High Court. Despite doubts about the petitioner's bona fides, the Court recognized the significant public interest in the issues raised and proceeded to clarify the legal and regulatory framework governing poppy seed imports.

Conclusion and Observations:
The Court concluded that the conditions in the notification dated 5 October 2012 must be strictly enforced, imports must be limited to designated countries, and the Narcotics Commissioner must verify the legitimacy of import contracts. The Court vacated all interim orders and reiterated that regulatory authorities have wide powers to ensure compliance with the law and prevent illegal trade. The petition was disposed of with these observations.