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TMI Blog2015 (1) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... ly specifies the nature of items that may be specified by the DGFT. This entry cannot be read as restricting all items in the nature of ‘military stores’ unless made freely exportable by the DGFT. Given the underlying intent of FTP - items are freely exportable unless restricted - it is not possible to read any restriction under entry no. 4 unless the DGFT specifies those items. - Plainly, the FTP empowered the DGFT to specify items of military stores that would be freely exportable subject to obtaining a NOC from DoDP. Admittedly, the DGFT has not specified any such list but, by the impugned circular, has sought to pass an omnibus order disallowing export of all goods which are ‘apparently in the nature of ‘Military Stores’’. Clearly, the same is not in conformity with the FTP read with Schedule 2 of ITC (HS), 2012 as notified by the Central Government. Whether the DGFT is empowered under the legal framework to issue such omnibus directions which are, apparently, not in conformity with the notified FTP. - Held that:- entry no. 4 of Table A of Schedule 2 of ITC (HS), 2012 requires that a NOC be obtained from DoDP in respect of items specified by the DGFT. In the circumstances, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the DGFT has proscribed export of goods, which are apparently in the nature of military stores, without a No Objection Certificate (NOC) from Department of Defence Production and Supplies, Ministry of Defence (hereafter DoDP ). 2. According to the petitioner, the impugned circular is ultra vires the Foreign Trade (Development and Regulation) Act, 1992 (hereafter the FTDR Act ) and the Foreign Trade Policy (hereafter FTP ) notified thereunder. 3. The petitioner is a proprietorship concern of one Dinesh Kumar and is stated to be engaged in exporting products required for personal protection. These products include products like bullet proof jackets and other items for personal safety of the security personnel. The imports of such goods are not restricted under the FTP and such goods are freely importable. The petitioner asserts that it received a purchase order for supply of bullet proof vests of the required specification from the Ministry of Interior, Tunisia. It is contended that although such bullet proof vests are freely exportable under the FTP, the petitioner has been unable to export the goods on account of the insistence of the respondent to obtain a NOC from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, as specified in ITC (HS) notified by DGFT, as amended from time to time. 9. A plain reading of paragraph 2.1 of the FTP indicates that there is no restriction as to export of any item unless it is expressly provided under the FTP or any law in force. In the present case, there is, admittedly, no law that expressly prohibits or restricts the exports of bullet proof vests. Thus, the only question that needs to be addressed is whether any such restriction can be read in the FTP. ITC (HS) indicates the policy in respect of separate items and it is necessary to refer to entry 4 5 of Table-A of Schedule 2 of ITC (HS), 2012 which reads as under:- S. No. Chapter Item Description Policy Nature of Restriction 4 Any Chapter Military stores as specified by Director General of Foreign Trade Free No Objection Certificate from Department of Defence Production and Supplies, Ministry of Defence, New Delhi, except the goods as specified at Export Licensing Note 1 below which are freely exportable without the No Objection Certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he schedule and its appendices does not preclude control by way of a Public Notice Notification under the Foreign Trade (Development and Regulations) Act, 1992. Goods listed as Free in the Export Licensing Schedule may also be exported without an export licence as such but they are subject to conditions laid out against the respective entry. The fulfillment of these conditions can be checked by authorized officers in the course of export. 12. At this stage, it is also necessary to consider the relevant contents of the impugned circular which are quoted below:- 2. Table A (S. No. 4) of Schedule II of ITC(HS) Classification of Export Import items, 2004-09 lays down the policy for export of 'military stores' i.e. a No Objection Certificate from Department of Defence Production (MoD) is required except in respect of goods as specified at Export Licensing Note 1 which are freely exportable without No Objection Certificate. 3. Keeping in view the above, it is reiterated that no export of goods, which are apparently in the nature of 'Military Stores' may be allowed without No Objection Certificate from Department of Defence Production, by all units includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITC(HS) or HBP-v1 or HBP-v2, or Schedule of DEPB Rates (including content, scope or issue of an authorization there under) said question or doubt shall be referred to DGFT whose decision thereon shall be final and binding. Procedure 2.4 DGFT may, specify procedure to be followed for an exporter or importer or by any licensing or any other competent authority for purpose of implementing provisions of FT (D R) Act, the Rules and the Orders made there under and FTP. Such procedures shall be published by means of a Public Notice, and may, in like manner, be amended from time to time. 18. The role of the DGFT although important and significant does not extend to modifying the FTP in any manner. Section 6(3) of the FTDR Act, clearly, indicates that the Central Government may direct certain powers exercisable by it may be exercised by the DGFT. However, the same would not extend to powers exercised by the Central Government, inter alia, under Section 5 of the FTDR Act. Thus, notifying the FTP or any amendment thereto can be done only by the Central Government and not by the DGFT. Whilst the DGFT has the power to issue any clarification in respect of any doubts that may arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to as SCOMET goods ) as specified in Appendix 3 would be either prohibited, restricted or free. 25. Concededly, Appendix 3 does not contain the item of bullet proof vests. It is contended that Appendix 3 includes category 6, which is reserved for munitions list and the same is yet to be finalized. The respondent contends that munitions list would be notified by the DGFT following the decision taken by the Government at an appropriate time. 26. Thus, admittedly, bullet proof vests are not included in the SCOMET list as yet. In the circumstances, I am unable to accept that the FTP, in any manner, restricts export of bullet proof vests. In any event the impugned circular does not purport to notify any item of SCOMET list but seeks to restrict items, which are apparently considered as military stores . 27. Before concluding, it would also be necessary to observe that it is not disputed that bullet proof vests are freely importable in the country. In the circumstances, it does not stand to reason to read in any restriction for export of such items in the FTP. 28. It is also relevant to note that on 28.02.2014, the learned counsel appearing for respondent no.1 had stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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