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2020 (6) TMI 140 - HC - CustomsAdvance Authorization Scheme - export of items namely Gold Medallions and Coins or Any Jewellery manufactured by fully mechanized process - HELD THAT - It appears that by impugned public notice No.35/2015-2020 dated 26th September, 2019 (Annexure P-1 to the memo of writ petition) issued by respondent No.1 whereby the Director General of Foreign Trade (DGFT), in exercise of the powers under paragraph 1.03 of the Foreign Trade Policy 2015-2020, disallowed issuance of Advance Authorisations where item of export is Gold Medallions and Coins or any jewellery/articles manufactured by fully mechanized process, has in effect amended the Foreign Trade Policy, in excess of power and jurisdiction of the DGFT. The powers exercised by DGFT while issuing the aforesaid public notice dated 26th September, 2019 which puts restrictions upon issuance of the advance authorisation for the Gold Medallions and Coins is beyond the power, jurisdiction and authority of DGFT. The categorisation or re-categorization cannot be done by the policy circulars, such exercise has to be undertaken by specific amendment to the Foreign Trade Policy under Section 5 of the Act. Hence also, the public notice No.35/2015-2020 dated 26th September, 2019 (Annexure P-1) is beyond the power, jurisdiction and authority of DGFT - the power exercised by DGFT under paragraph 1.03 of the Foreign Trade Policy 2015-2020 is illegal and the same deserves to be quashed and set aside. The public notice dated 26th September, 2019 issued by respondent No.1 and consequential letters dated 1st November, 2019 are set aside which are Annexure P-2 and Annexure P-3 respectively to the memo of writ petition are directed to be decided by respondent No.1 as early as possible and practicable - petition allowed.
Issues Involved:
1. Validity of the Public Notice dated 26.09.2019 issued by DGFT. 2. DGFT’s authority to amend the Foreign Trade Policy (FTP). 3. Retrospective application of the Public Notice. 4. Processing delays of the Petitioner’s applications. 5. Entitlement to Advance Authorization based on the original application date. Issue-wise Detailed Analysis: 1. Validity of the Public Notice dated 26.09.2019 issued by DGFT: The Petitioner challenged the Public Notice dated 26.09.2019, which disallowed the issuance of Advance Authorization for export items "Gold Medallions and Coins" and "Any Jewellery manufactured by fully mechanized process." The Court found that this Public Notice effectively amended the FTP, which is beyond DGFT's jurisdiction. 2. DGFT’s authority to amend the Foreign Trade Policy (FTP): The Court examined whether DGFT had the authority to amend the FTP through a Public Notice. It was noted that under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992, only the Central Government has the power to formulate, announce, and amend the FTP. The DGFT, under Section 6, can only advise and carry out the policy but cannot amend it. The Court referred to the Supreme Court’s decision in *Director General of Foreign Trade vs. Kanak Exports* and *Atul Commodities Pvt. Ltd. vs. Commissioner of Customs, Cochin*, which held that procedural changes by DGFT cannot alter substantive policy provisions. Thus, the Public Notice was deemed ultra vires. 3. Retrospective application of the Public Notice: The Petitioner argued that the Public Notice could not be applied retrospectively to their applications, which were filed before the issuance of the notice. The Court agreed, stating that the benefit extended by a statutory policy cannot be withdrawn by a policy circular and that the application should be processed based on the rules prevalent at the time of filing. 4. Processing delays of the Petitioner’s applications: The Petitioner contended that there was an unreasonable delay in processing their applications, which should have been completed within the time limits specified in the FTP. The Court noted that the delay was not attributable to the Petitioner and that the applications should have been processed promptly. 5. Entitlement to Advance Authorization based on the original application date: The Court held that since the Petitioner’s applications were filed before the issuance of the impugned Public Notice, they should be processed based on the FTP provisions in effect at the time of filing. The delay in processing did not negate the Petitioner’s entitlement to Advance Authorization. Conclusion: The Court quashed the Public Notice dated 26.09.2019 and the consequential deficiency letters dated 01.11.2019. It directed the Respondents to consider and process the Petitioner’s applications as per the FTP provisions existing at the time of their filing. The writ petition was allowed and disposed of accordingly.
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