2022 (12) TMI 154 - HC - Customs

Fixation of the minimum price for importation of betel nuts? - authority of the Central Government to regulate the importation of betel nuts otiose resulting in creating a precedence by which the Central Government shall not have the power to regulate and/or control the importation of any item - power and competence of the DGFT to issue notification restricting the importation of betel nuts below the CIF value fixed by the DGFT - Whether the Learned Tribunal failed to appreciate that the tariff value fixed by the importer and duty paid thereunder is not at all applicable in the facts and circumstances of the case nor the same has any legal validity in view of the fact that the 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? HELD THAT - The issue involved in this appeal is as regards the effect of the notification issued under the provisions of the Foreign Trade (Development and Regulation) Act, 1992. The learned Tribunal had followed the decision of the Co-ordinate Bench of the Tribunal in the case of M/S INTERNATIONAL SEAPORT DREDGING LTD. VERSUS CC ST, VISAKHAPATNAM-CUS 2016 (11) TMI 176 - CESTAT HYDERABAD and held that the betel nuts which were imported by the respondent by declaring the prices which were less than the minimum import price specified by the DGFT cannot be held as import of prohibited goods. Consequently, the order of confiscation was set aside along with the order for payment of redemption fine and penalty. As rightly pointed out by the learned standing counsel for the revenue, the law on the subject as settled by this Court and subsequently by the Hon ble Supreme Court could not be placed before the Tribunal for its consideration, the first of the decisions being the Hon ble Division Bench of this Court in the case of UNION OF INDIA VERSUS NAVIN KR. JHA, ARUP KUMAR GARAI, M/S. SHEROWALI VANIJYA PVT. LTD., SOUMEN DAS, MOHAMMED SABEER, SUNIL AGARWAL, ANGKITA DHAR, RAHUL SOMANI, ARJUN KUMAR CHAUDHURY, MOHAMMED RAZA, M/S. S.S. TRADING CO., AMIT KUMAR, M/S. MAA BARA SHYAMA ENTERPRISES, BIMAL KUMAR MODI, M/S. STAR EXIM AND KANIKA DHAR @ KANIKA DEY DHAR 2016 (2) TMI 1350 - CALCUTTA HIGH COURT . An identical issue arose for consideration in the said case where the intra-court appeal by the Union of India was against an order passed in a batch of writ petitions whereby the notification dated 13th May, 2013 imposing price restrictions by exercising the powers under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 was set aside. The matters are remanded back to learned Tribunal for fresh consideration, to take note of the decision referred to above as well as the decisions and submissions which may be placed before the Tribunal during the course of hearing and a reasoned and speaking order be passed by the learned Tribunal in accordance with law. Appeal allowed by way of remand.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Validity of the Tribunal's order vis-à-vis the Foreign Trade (Development and Regulation) Act, 1992 and related notifications.
3. Authority of the Central Government and DGFT in regulating the importation of betel nuts.
4. Applicability and legal validity of tariff values fixed by the importer versus CIF values fixed by DGFT.

Detailed Analysis:

1. Condonation of Delay:
The Court addressed an eight-day delay in filing the appeal. Satisfied with the reasons provided in the affidavit, the Court allowed the application and condoned the delay.

2. Validity of the Tribunal's Order:
The Court examined whether the Tribunal's order was against the provisions of law, particularly the Foreign Trade (Development and Regulation) Act, 1992. The Tribunal had followed a previous decision in International Seaport Dredging Ltd. vs. C.C. & S.T., Visakhapatnam, and held that imported betel nuts below the minimum import price specified by the DGFT were not prohibited goods. Consequently, the order of confiscation was set aside along with redemption fine and penalty.

However, the Court noted that the Tribunal did not consider the law settled by the Calcutta High Court and the Supreme Court, particularly in Union of India vs. Navin Kr. Jha, where the Division Bench upheld the power of the DGFT to issue notifications fixing the minimum import price.

3. Authority of the Central Government and DGFT:
The Court emphasized that the Foreign Trade (Development and Regulation) Act, 1992, authorizes the Central Government to regulate foreign trade, including fixing and revising minimum import prices. The Court cited the Supreme Court's decision in Union of India and Others vs. AGRICAS LLP and Others, which clarified that the FTDR Act's provisions are in addition to other laws and empower the Central Government to impose restrictions on imports.

The Court further referenced Union of India and Others vs. Raj Grow Impex LLP and Others, highlighting that the Central Government's notifications balancing domestic and import interests are valid and enforceable. The Court stressed that personal business interests of importers cannot override public interest and regulatory measures.

4. Applicability of Tariff Values:
The Court addressed whether the tariff value fixed by the importer and the duty paid thereunder had any legal validity in light of the DGFT's notification fixing the CIF value for betel nuts. The Court noted that the Tribunal failed to consider that the goods imported below the CIF value set by the DGFT are liable for confiscation.

Conclusion:
The Court allowed the appeals, set aside the Tribunal's orders, and remanded the matters back to the Tribunal for fresh consideration. The Tribunal was instructed to take into account the legal positions established by higher courts and to issue a reasoned and speaking order based on merits and in accordance with the law. Consequently, the substantial questions of law were left unanswered, and the applications for condonation of delay were disposed of.