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2022 (11) TMI 707 - HC - CustomsFixation of minimum price for importation of betel nuts - power to regulate and/or control the importation of any item - competence of the DGFT to issue notification restricting the importation of betel nuts below the CIF value fixed by the DGFT - tariff value fixed by the importer in its shipping bill has been annulled and/or overridden due to the notification issued by the DGFT in fixing the CIF value of betel nuts for the purpose of importation - Foreign Trade (Development and Regulation) Act, 1992. HELD THAT - The Hon ble Supreme Court in Union of India and Others vs. Raj Grow Impex LLP and Others, 2021 (6) TMI 778 - SUPREME COURT while considering the effect of the notification issued by the Central Government under the FTDR Act and also consequential Trade notices issued by the DGFT held that the goods in question are to be held liable to absolute confiscation but with a relaxation of allowing re-export, on payment of the necessary redemption fine and subject to the importer discharging other statutory obligations. The above decision are of much relevance to the case on hand. However, as observed earlier, they could not be placed before the Tribunal because these decisions were rendered much after the order was passed by the Tribunal. The matter should be re-heard by the Tribunal and a fresh decision should be taken on merits after taking note of the legal position - Appeal allowed by way of remand.
Issues Involved:
1. Validity of the Tribunal's order in light of the Foreign Trade (Development and Regulation) Act, 1992. 2. Authority of the Central Government to regulate the importation of betel nuts. 3. Competence of the DGFT to issue notifications restricting importation below the CIF value. 4. Applicability of the tariff value fixed by the importer in the context of DGFT notifications. Detailed Analysis: 1. Validity of the Tribunal's Order: The appeal questions whether the Tribunal's order is a nullity as it failed to consider the provisions of the Foreign Trade (Development and Regulation) Act, 1992, and relevant notifications fixing the minimum price for importation of betel nuts. The Tribunal had followed a precedent from the case of International Seaport Dredging Ltd. vs. C.C. & S.T., Visakhapatnam, and concluded that betel nuts imported below the minimum price were not prohibited goods, thus setting aside the order of confiscation and associated penalties. 2. Authority of the Central Government: The appeal contends that the Tribunal's order undermines the Central Government's authority to regulate imports, potentially harming domestic growers' interests. The judgment references the Division Bench decision in Union of India vs. Navin Kr. Jha, which upheld the Central Government's power to revise minimum import prices under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. The Division Bench emphasized that regulation is essential for planned development and that the DGFT, acting as an arm of the Central Government, has the authority to implement such policies. 3. Competence of the DGFT: The appeal also challenges the Tribunal's failure to recognize the DGFT's competence to issue notifications restricting imports below the CIF value. The Supreme Court in Union of India vs. AGRICAS LLP and Others highlighted that the FTDR Act's provisions are supplementary to other laws, empowering the Central Government to regulate imports through notifications. The Court affirmed that such notifications are intra vires and not ultra vires, reinforcing the DGFT's authority. 4. Applicability of Tariff Value: The Tribunal's decision was criticized for not appreciating that the tariff value declared by the importer and the duty paid thereunder were overridden by the DGFT's notification fixing the CIF value for betel nuts. The Supreme Court in Union of India vs. Raj Grow Impex LLP and Others underscored the importance of balancing national economic interests and the interests of domestic farmers against importers' personal gains. The Court ruled that improperly imported goods under interim orders should be subject to confiscation to prevent market disruption. Conclusion: The High Court found that the Tribunal did not consider binding legal precedents, including the Division Bench decision in Navin Kr. Jha. The Court remanded the matter to the Tribunal for fresh consideration, instructing it to take into account the relevant legal positions and decisions cited, and to issue a reasoned and speaking order on merits. Consequently, the substantial questions of law were left unanswered, and the appeal was allowed.
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