2019 (8) TMI 1387 - HC - Customs

Prohibited goods or not - opium poppy or bread seed poppy - public notice No. 9/2019 - guidelines for registration of sales contract in regard to poppy seed imports from Turkey - HELD THAT - The guidelines are specific to poppy seed imports from Turkey. They speak, in clause I, of a determination of a country cap. This cap is to be approved by the Department of Revenue, based on a recommendation by the Narcotics Commissioner, a representative of the Directorate General of Foreign Trade, and a representative of the Department of Revenue. The clause clearly says that the country cap will be based on stock and production of poppy seeds as communicated by the Turkish Grain Board (TMO) or the Turkish Embassy in India. Clearly, therefore, this cap is not ad hoc or without basis. The power to impose quantitative restrictions can be traced to Chapter III-A of the Foreign Trade (Development Regulation) Act 1992. This was inserted by a 2010 amendment, and confers power on the Central Government to impose quantitative restrictions on imports. Section 9-A says that the Central Government may, after conducting a suitable enquiry, if satisfied that any goods are imported into India in large quantities and under such conditions as injure or threaten to injure domestic industry, it may impose quantitative restriction. These restrictions can continue for a maximum of four years, extendable by a like period - Once, therefore, we find that there is a power to regulate and a power to impose quantitative restrictions, and there is no challenge to the exercise of that power, it is difficult to see what remains in the Petition. Merely saying that a certain clause is, in the Petitioner s view, sub-optimal, or leaves something to be desired, is not enough to warrant a striking down of the notification. We cannot, equally, substitute our view for government policy framed in legitimate exercise of statutory power. Once, therefore, we see that the presently impugned Guidelines are but a step towards implementing a policy that has not only been in place in some form for many years previously, but is in furtherance of a policy to promote the larger public interest, then the narrow commercial interests of the Petitioners must yield. Petition is entirely without merits and is dismissed.

Issues Involved:
1. Constitutionality of guidelines dated 25th June 2019 issued by the Central Bureau of Narcotics (CBN) regulating the import of poppy seeds from Turkey.
2. Allegation of creating a monopoly and unreasonable restrictions due to new guidelines.
3. Validity and necessity of the registration process for Indian importers.
4. Power of the Central Government to impose quantitative restrictions on imports.

Detailed Analysis:

1. Constitutionality of Guidelines:
The Petitioners challenged the guidelines issued by the CBN on 25th June 2019, arguing that they impose unconstitutional restrictions on their right to trade and carry on business. The court disagreed, stating that there is no fundamental right to import poppy seeds or any commodity without restrictions. The guidelines were framed pursuant to a Memorandum of Understanding (MoU) dated 23rd May 2018 between India and Turkey and were intended to give effect to the National Policy on Narcotic Drugs and Psychotropic Substances, controlled by the Narcotic Drugs & Psychotropic Substances Act, 1985 (NDPS Act).

2. Allegation of Creating a Monopoly:
The Petitioners argued that the new registration process would create a monopoly favoring large importers, as opposed to the old system of drawing lots. The court found no merit in this argument, emphasizing that the guidelines aim to filter out non-genuine importers and prevent cartelization and artificial price hikes. The court highlighted that no other importers had complained about the guidelines, and one importer even sought to intervene to contest the petition, indicating compliance with the guidelines by other importers.

3. Validity and Necessity of Registration Process:
The Petitioners contended that requiring Indian importers to register, even after the Turkish exporter is registered with the Turkish Grain Board (TMO), was arbitrary and introduced unnecessary red tape. The court rejected this argument, explaining that the registration process was designed to ensure that only bona fide importers could import poppy seeds, thereby preventing misuse and ensuring adherence to the guidelines. The court noted that the guidelines were not ad hoc but based on stock and production data provided by the Turkish authorities.

4. Power to Impose Quantitative Restrictions:
The court examined the source of power for the Central Government to impose quantitative restrictions on imports, tracing it to Chapter III-A of the Foreign Trade (Development & Regulation) Act 1992. The court noted that the Petitioners did not question the power to regulate and impose such restrictions. The court emphasized that once the power to regulate and impose quantitative restrictions is established, the challenge to the guidelines becomes untenable. The guidelines were seen as a step towards implementing a long-standing policy aimed at promoting public interest over narrow commercial interests.

Conclusion:
The court dismissed the writ petition, finding it entirely without merit. The guidelines were upheld as a legitimate exercise of statutory power aimed at regulating the import of poppy seeds in line with national and international policies on narcotic drugs and psychotropic substances. The court emphasized that the Petitioners' preference for the old policy, without substantiating their reasons with data, was insufficient to warrant striking down the new guidelines. The civil application was disposed of accordingly, with no costs awarded.

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