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TMI Blog2015 (12) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... 014, WRIT PETITION (L)NO.2963 OF 2014 S.C. DHARMADHIKARI AND A.A. SAYED, JJ. Mr. Vikram Nankani, Senior Counsel, a/w Mr. Aqbel Sheerazi, Sushanth Murthy, Sparsh Prasad i/b. Economic Laws Practice for the Petitioners. Mr. Anil C. Singh, Additional Solicitor General of India, with Dr. G. R. Sharma with Mr. D.P. Singh, Dhanesh Shah, Ajay Patil and Dhiren Shah, Mr. Pradeep S. Jetly Mr. Rafiq Dada, D. B. Shroff, Senior Counsels, a/w Mr. Vipin Jain, Vishal Agarwal and P. K. Shetty, Mr. Venkatesh Dhond, Senior Advocate, a/w Rashmin Khandekar, Prateek Pai i/b. Keystone Partners , Ms. Pooja Thorat a/w Mr. Sejal Yadav for Steel Authority of India, Intervenors, Mr. Anjal Amin i/b. B. Amin & Co. for the Respondent JUDGMENT (PER S. C. DHARMADHIKARI, J.) Rule. The Respondents waive service. By consent, Rule made returnable forthwith. 2] By this Writ Petition under Article 226 of the Constitution of India, the Petitioners pray for the following reliefs:"( a) that this Hon'ble Court be pleased to declare that the impugned Circular No.450/176/2014CustIV dated 7th November, 2014 is unconstitutional and ultra vires Articles 14, 19(1)(g) and 300A of the Constitution of India and the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds are alloy steel and classifiable under Heading 7228 of CTA. As per General Note 2A of ITC (HS), all quality conditions imposed under the BIS Act have to be complied with by the steel imported into India. 6] The Petitioners further state that in exercise of powers conferred by section 14 of the BIS Act, the Central Government issued the Steel Quality Control Order dated 12th March, 2012 which, inter alia, provides that no person shall by himself, or through any other person manufacture or store or sell or distribute any steel and steel products specified in the Schedule which do not conform to the specified standards and do not bear standard marks of the Bureau of Indian Standard on obtaining certification marks license as provided for in paragraph 4 thereof. The Schedule contains a list of steel products under mandatory Bureau of Indian Standards Certification and is divided into 3 columns. Column 1 covers the relevant Indian standard numbers. Column 2 refers to the corresponding heading/subheading of ITC (HS). The Schedule to this order was amended vide order dated 31st March, 2014. The said goods are covered by serial No.5 of the amended schedule which now also contains colum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the Writ Petition on several grounds. The Writ Petition was filed on 14th November, 2014. An affidavit in reply has been filed by the Respondent No.4 in which the Respondent No.4 has clarified in para 11 as under; "I also say that the 4th Respondent has further issued Steel and Steel Product (Quality Control), Amendment Order, 2014 on 4th December, 2014 wherein it is clearly set out that ITC (HS) codes are generic and merely indicative in nature. It is not exhaustive. Thus ITC (HS) codes are not the guiding criteria for the BIS Act. The said ITC (HS) codes are only used as a point of reference. The said order clears all the confusion pertaining to inclusion of alloy and nonalloy steel in the Schedule. In view of the said order, the Petitioner cannot raise such allegations as the same are contrary to the statute. 10] Mr. Nankani, learned Senior Counsel, submits that the controversy in the Writ Petition is now restricted to the position prevailing prior to 7th November, 2014. Though the Petitioner is partially satisfied with the above clarification issued in the affidavit in reply, yet, the amendment made vide page 165 of the paper book does not redress the grievance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent, it is based on irrelevant consideration, is without and/or in excess of jurisdiction and, therefore, violative of Article 14 of the Constitution of India. The impugned Circular has been issued with a malafide intention to favour some of the manufacturers and/or rerollers of steel, who have vested interests and discriminate against persons like the Petitioners. The impugned Circular is a clear case of bias against the Petitioners and reveals the case of nepotism in relation to some of the manufacturers and/or rerollers of steel. The impugned Circular, is therefore, arbitrary, unreasonable and violative of Article 14 and Article 19(1)(g) of the Constitution of India. 13] Mr. Nankani has further submitted that the impugned Circular ignores relevant facts and provisions of law. The explanation to the amended schedule, on a plain reading, confirms that in order that the provisions of the Steel Quality Control Order are made applicable, the goods must fall under both the relevant BIS standards a well as ITC (HS) Code. The explanation to the amended schedule reads as under: "Explanation : For the purposes of this Order, it is hereby clarified that while taking a decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been clarified amply. Mr. Singh submits that there are three different statutes and contemplating three different authorities. The standard and quality of goods (BIS) is for the purposes of safety and preserving and protecting public health. Those standards and qualities are evolved and every country is free to prescribe its own standards and qualities of goods. Mr. Singh has relied upon para 9 of the affidavit in reply to submit that the goods imported by the Petitioners are meant for consumption of construction industries that is for concrete reinforcement purposes. Further, it is not disputed that the manufacturer or exporter overseas/abroad has not applied for a BIS license and the goods imported do not bear the standard mark of BIS. 17] Mr. Singh has relied upon para 10, 11 and 15 of the affidavit in reply which read as under:" 10. I say that the Schedule to the Steel and Steel Products Quality control in column 3 thereof gives ITC (HS) Code which has been defined in Clause 2(d) of the Order to mean 'Indian Trade Classification' (Harmonised Systems) Codes as specified in the entries in column (3) of the Schedule. However, there is no reference to the ITC (HS) Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th December, 2014, it is reaffirmed that ITC (HS) Codes are merely indicative and not exhaustive. That is not a guiding criteria for the BIS Act. For all these reasons, it is submitted that there is no violation of the mandate of Article 14 or 21 of the Constitution of India. He submits that there is no merit in the Writ Petition particularly when the allegations of malafide and discrimination are patently false. 19] Mr. Rafiq Dada and Mr. D. B. Shroff, learned Senior Counsel, appearing for some of the Associations have supported the stand taken by Mr. Singh. 20] For properly appreciating the rival contentions, a reference is necessary to the statutes in the field. The Bureau of Indian Standards Act, 1986 is an Act to provide for the establishment of a Bureau for the harmonious development of the activities of standardisation, marking and quality certification of goods and for matters connected therewith or incidental thereto. Section 2 contains the definitions. The term Indian Standard is defined in section 2(g) which reads as under:" 2(g) 'Indian Standard' means the standard (including any tentative or provisional standard) established and published by the Bureau, in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stinguish it from any other article or process; 2(t) "Standard Mark" means the Bureau of Indian Standards Certification Mark specified by the Bureau to represent a particular Indian Standard and also includes any Indian Standards Institution Certification Mark specified by the Indian Standards Institution." 23] Then, Mr. Nankani has relied upon section 11 and to urge that no person shall use, in relation to any article or process, or in the title of any patent, or any trade mark or design the Standard Mark or any colourable imitation thereof, except under a licence. 24] Mr. Nankani has also invited our attention to section 14 of this Act which reads as under:" 14. Compulsory use of Standard Mark for articles and processes to certain scheduled industries.- If the Central Government, after consulting the Bureau, is of the opinion that it is necessary or expedient so to do, in the public interest, it may, by order published in the Official Gazette, - a. notify any article or process of any scheduled industry which shall conform to the Indian Standard; and b. direct the use of the Standard Mark under a licence as compulsory on such article or process. Explanation - For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er subsection (2) applies shall be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly. [(4) without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export of any goods, nor any goods shall be prohibited for import or export except, as may be required under this Act, or rules or orders made thereunder.] 6. Appointment of Director General and his functions. - (1) The Central Government may appoint any person to be the Director General of Foreign Trade for the purposes of this Act. (2) The Director General shall advise the Central Government in the formulation of the [foreign trade policy] and shall be responsible for carrying out that policy. (3) The Central Government may, by Order published in the Official Gazette, direct that any power exercisable by it under this Act (other than the powers under sections 3, 5, 15, 16 and 19) may also be exercised, in such cases and subject to such conditions, by the Director General or such other officer s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es laid down in Part 1 Schedule 1 - Import Policy ITC (HS) Classification for Imports apply to imported goods. Note 2 is important and reads as under:" 2. Indian Quality Standards : (A) Mandatory Indian Standards of Bureau of Indian Standards (BIS) : Quality of the products that are subject to mandatory Indian Standards, as applicable to domestic goods, shall be required to comply with quality specified for the product as per same Indian Standards. For compliance of this requirement, all manufactures/exporters of these products to India, shall be required to obtain BIS license for using Standards mark on their product. The present list of 'Items under mandatory BIS certification' is given in AppendixIII of this Schedule. As and when BIS notifies the quality specifications for new product(s) as an Indian Standards, the said Indian Standards would deemed to be part of AppendixIII from the date of implementation of the said Indian Standards for the said product(s) and the import of that product(s) shall conform to that specified Indian Standard from the date of implementation as specified for the said product(s) by BIS." 31] It is in this context that the ITC (HS) class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 mentions goods falling under CTH 72131090 and 72142090 (Sr. No.5 of the said Order refers). Sine CTH 7228 was not mentioned in the said Steel Products Quality Control Order, 2012 the Commissioner of Customs (Imports), Chennai referred the matter to Bureau of Indian Standards for clarification. The Board also made a reference to Ministry of Steel to align the Steel Products Quality Control Order, 2012 with the correct CTH. In this regard, Ministry of Steel has informed that the Steel Products Quality Control Order, 2012 is strictly based on the relevant Indian Standard though ITC (HS) Code has been provided for reference purposes. This is also clarified in the "Explanation" to the said Steel Products Quality Control Order, 2012. Ministry of Steel has concluded that all products covered by the relevant Indian Standard fall under the said Steel Products Quality Control Order, 2012 and import of such products without BIS certification is in circumvention of the said Order. It is categorically confirmed that rebar/ TMT bar containing 0.0008% or more Boron falling under alloy steel category is covered by Indian Standard IS 1786 regardless of the ITC(HS) Code given in the said Steel Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the Board of Indian Standards and to ITC (HS) Code and, inter alia, to the goods brought in by parties like the Petitioner in India confirming to the standards and quality devised by the Board is to caution that no violation of the quality standards is permissible. We do not see how such a stand taken in the circular can be said to be violating the mandate of Article 14 of the Constitution of India. Chapter 72 of the ITC (HS) is dealing with Iron and Steel and contains Notes and Supplementary Notes. That is classification of Export and Import items with Customs Tariff Rates and Exemptions. The code is to facilitate ImportExport and referable to section 7 of the Foreign Trade (Development and Regulation) Act, 1992. 37] We are in agreement with Mr. Singh, learned Additional Solicitor General of India, that even imported goods and which are to be used in this case for construction industries should meet the standards of quality. Mr. Singh and Mr. Dada were right in contending that larger public interest is subserved by insisting on the imported goods complying with all the domestic laws. 38] We have perused all the relevant material. It is referred by us extensively hereinabove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that there is no merit in the contentions of Mr. Nankani. He would rely upon section 40 of the Bureau of Indian Standards Act, 1986 to urge that this Act shall not affect operation of certain Acts. However, a perusal of section 40 would indicate that the operation of the Agricultural Produce (Grading and Marketing ) Act, 1937 or the Drugs and Cosmetics Act, 1940 or any other law for the time being in force, and which deals with any standard or quality control of any article or process alone is not affected by the Bureau of Standard Acts, 1986. 40] We do not find anything in the provisions and which are relied upon as indicative of the fact that the standards and which are devised so as to take care of the quality and specification of the article or process, do not facilitate foreign trade. The Foreign Trade (Development and Regulation) Act, 1992 or the Customs Act, 1962 cannot be construed so as to override the BIS Act, 1986 insofar as the prescription and devising of standards. If the Petitioners have imported goods which are of the description BIS 1786:2008, then, such goods meant for construction industries not having the BIS license and the imported goods not bearing the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or compliance of imported goods with any laws which are applicable to similar goods produced or manufactured in India. Last but not the least, the power can also be exercised to prevent the contravention of any law for the time being in force or any other purpose conducive to the interest of the general public. In such circumstances, we are not in agreement with Mr. Nankani that the Board lacked the power to issue the impugned circular. 42] Similarly, we are not in agreement with Mr. Nankani that the ITC (HS) is code by itself. His argument overlooks the fact that the same is only to identify the goods which are permitted to be imported or exported. That is a code devised in terms of the Foreign Trade (Development and Regulation)Act, 1992 so as to identify the goods which are imported or exported. It is an importer or exporter code number which is essential. However, the act under which all this is devised itself clarifies that the Central Government may make a provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the order, the import or export of goods or se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s out the Indian standard number, the title of the goods and date of coming into force of the product standard to the extent set out therein. The ITC (HS) Code is for reference purposes. It also indicates as to how the title listing the steel products has to be construed and with reference to the ITC (HS)Code. The standards have to be complied with and from the dates mentioned therein. 45] In the above circumstances we do not find any basis to hold that the Circular issued on 7th November, 2014 is ultra vires Article 14 of the Constitution of India. We are of the opinion that the Circular in no way prohibits the Petitioners from importing the goods. The same does not hold up unnecessarily the consignments. We are also not in agreement with the Petitioners that the Circular is based on irrelevant, extraneous and nongermane considerations. The circular is also not discriminatory or malafide. It is not ignoring any of the provisions of law. The Circular does not violate the mandate of Article 19(1)(g) of the Constitution of India or 300A of the Constitution of India. As a result of this conclusion, the Writ Petitions fail. Rule is discharged in each of these Writ Petitions. There wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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