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TMI Blog2002 (10) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner on 8th October, 2001. A public notice dated 20th May, 2002 was also issued by DGFT to amend the Hand Book of procedures for 2002-2007 so as to prohibit duty free import of natural rubber. The Petitioner was allowed to amend the petition so as to challenge the validity of the aforesaid show cause notice dated 29th April, 2002 and also challenge the validity of the public notice dated 20th May, 2002. 2. The short question that arises for our consideration in this petition is when the statutory provisions of the import policy specifically permits import of natural rubber duty free under an advance licence, is it open to the implementing agency, namely the DGFT to prohibit/ban import of natural rubber under an advance licence? 3. Before dealing with the facts of the case, it is necessary to set out the relevant policy provisions. 4. Section 5 of the Foreign Trade (Development and Regulation) Act, 1995 [ Act for short] empowers the Central Government to announce the export-import policy (EXIM policy) and also amend that policy from time-to-time. Section 6 of the Act, empowers the Central Government to appoint any person as DGFT to advice the Government in the formulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral rubber could be imported freely in India, either on payment of duty or duty free under an advance licence, as an input for the export product. 8. Now, turning to the facts of the case, the Petitioner who manufactures rubber gaskets and exports the same, was entitled to import natural rubber as an input for using it in the manufacture of the final product namely rubber gasket. The Licensing Authority in accordance with the prevalent EXIM policy had issued an advance licence on 8-10-2001, thereby permitting the Petitioner to import 14,230 Kgs. of natural rubber duty free as it was to be used in the manufacture of rubber gaskets (rings) and then exported. Since the imports were to be effected through the S.T.C. (Respondent No. 5), the Petitioner approached the S.T.C. who by their letter dated 19th December, 2001 (Exhibit-C to the petition) stated that the permissibility of duty free import of natural rubber under the advance licence, is under consideration of the Ministry of Commerce and only on clearance from the said Ministry, the imports can be effected under the advance licence granted to the Petitioner. In the meantime, DGFT had issued various circulars, including the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral rubber, permitted under the policy is not rendered nugatory by the circulars issued by the DGFT and the amendments effected to the Hand Book of procedures. It was submitted that even after the impugned circulars and amendment to the Hand Book of procedures, the natural rubber can be imported as per the EXIM Policy. It was submitted that its was open to the petitioner to import natural rubber on payment of duty and if the same are used as input in the export products, then on export of the said goods, the petitioner is entitled to duty drawback and, therefore, the Petitioner is not in any way prejudiced by the circulars issued by DGFT. It was submitted that over the years there has been considerable decline in the price of natural rubber as a result, the domestic market, which is dominated by the small growers has been badly effected. Under the circumstances, the Government in the past had stepped in with a view to support domestic market and took measures in banning imports of natural rubber against the advance licence with effect from 20th February, 1999 and also took regulatory measures by permitting quantitative import of natural rubber through S.T.C., etc. However, with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho is empowered to prescribe the norms and the procedures for implementing the EXIM policy could not prohibit import of natural rubber under advance licence, when the EXIM policy specifically permits import of natural rubber under an advance licence. The impugned Circulars and the public notice issued by DGFT, in fact, nullify the express provisions of the EXIM Policy framed by the Central Government. Power to amend the policy being within the exclusive domain of the Central Government, the said powers cannot be usurped by the DGFT in the guise of laying down regularly measures. By prohibiting import of natural rubber under the advance licence in the Hand Book of procedures, the DGFT has encroached upon the powers of Central Government and purported to amend the EXIM policy 2002-2007 which power is not conferred upon the DGFT. As stated hereinabove Section 6(3) of the Act expressly prohibits the DGFT from exercising the power of amending the EXIM Policy. Therefore, in the absence of any power under the statute, the A.L.C. circulars and the public notice dated 20th May, 2002 to prohibit import of natural rubber under advance licence could not be issued by the DGFT. The said circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Government announced the EXIM Policy 2002-2007 wherein after considering the issue, the Central Government decided to permit duty free imports of natural rubber under an advance licence. Thus, when the Central Government in exercise of its statutory power and on reconsideration of the matter has taken a policy decision to permit duty free import of natural rubber under advance licence as late as on 2-4-2002, it is not open to the implementing agency namely the DGFT to prohibit duty free imports of natural rubber under advance licence by issuing circulars or by amending the Hand Book of procedure. Thus, the action on the part of the DGFT in purporting to prohibit duty free import of natural rubber is totally in breach of the policy decision taken by the Central Government and, therefore, the circulars and the public notice issued by the DGFT to prohibit the import of natural rubber under advance licence must be held to be null and void, without jurisdiction and liable to be quashed and set aside. 14. The Apex Court in the case of University of Kashmir Ors. v. Mohammed Yasin Ors. (AIR 1974 SC 238) has laid down the following proposition of law :- When a statute creates a b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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