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TMI Blog2020 (7) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... eds will continue till self-sufficiency is achieved. Therefore, the intent of the policy is clearly to promote consumption of the domestic production. In the present case, though the Committee appointed in terms of Clause 1 of the Guidelines acknowledges the availability of 8438 MTs of poppy seeds in Turkey for exports to India, the Competent Authority has taken into account the imports allowed from China and Czechoslovakia, the domestic licit production of poppy seeds in 2019, and the expected production/availability of poppy seeds in April-May, 2020, for its decision to finalize the Country Cap at 18000 MT. Such determination cannot, therefore, be said to be arbitrary or unreasonable - In terms of Clause I of the Guidelines, the Competent Authority has to base its decision determining the Country Cap on the recommendation of the Committee constituted in terms of the said Clause. However, it cannot be said that such recommendation is binding on the Competent Authority, that is, the Department of Revenue. The Competent Authority, for germane reasons, may decide not to agree with the recommendations, as has happened in the present case. The submission of the learned counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py seeds from Turkey (hereinafter referred to as the Guidelines ) to contend that the determination of the Country Cap for the purpose of import of poppy seeds from Turkey has to be made on the basis of the recommendation by a Committee comprising of the Narcotics Commissioner; one representative of the Directorate General of Foreign Trade (DGFT); and one representative of the Department of Revenue, and is to be based upon the stock and production of the poppy seeds as communicated by the Turkish Grain Board (TMO) or the Turkish Embassy in India. 5. The petitioners further place reliance on the MOU executed between India and Turkey on trade in poppy seeds and specifically Clause 2 thereof to contend that the said Agreement also acknowledges that the determination of the Country Cap shall be made by the Government of India in consultation with the Government of Turkey and after taking into account the production of poppy seeds in Turkey in a crop year, balance from the previous crop years and domestic or other export requirement of Republic of Turkey. 6. Based on the above documents, the learned counsels for the petitioners submit that the purpose of fixing the Country Cap f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Policy being a statutory document, cannot be derogated from. Therefore, the respondents cannot arbitrarily fix the Country Cap or deny registration of the contracts of the petitioners on arbitrary ground. 10. As far as the registration of their agreements by the respondent no.2 is concerned, the learned counsels for the petitioners submit that in terms of the Guidelines, the respondent no.2 has to register all contracts that have been duly registered with the TMO. They submit that the sale contracts of the petitioners have been registered by the TMO and documents acknowledging such registration have been filed on record. However, in spite of such registration by the TMO, the respondent no.2 in turn is not registering the sale contracts of the petitioner presumably because the Country Cap has been exceeded. They submit that if the Country Cap has been exceeded, the respondents are under an obligation to devise a fair and transparent manner of distribution of such Country Cap amongst various importers. They submit that the respondents cannot resort to a first cum first serve manner of allocating such Country Cap amongst various importers of poppy seeds. They place reliance on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Committee appointed in terms of Clause 1 of the guidelines was duly considered by the Competent Authority and taking into account the domestic production in the summer crop of 2020, it was decided not to increase the Country Cap beyond the already fixed limit of 18000 MT. He submits that the fixation of the Country Cap being a policy decision, this Court cannot sit in an appeal on such decision. 13. As far as the registration of the contract is concerned, the learned counsel for the respondents submits that in terms of the procedure prescribed in the Guidelines, it is the obligation of the exporting company in Turkey to get the sales contract registered with the TMO. As far as the respondents are concerned, once the application is made by the importer for registration of the sales contract, the respondent no.2 is to verify the fact of registration of the sales contract by TMO through the online system maintained by the TMO. Only where the sales contract is found to be registered by the TMO on such online system, provisional registration to importer is granted. In the present case, on the online system maintained by the TMO, the contracts of the petitioners were not fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a include fixing of the Country Cap. 17. The National Policy on Narcotic Drugs and Psychotropic Substances , in Clause 17 provides that the import of poppy seeds will continue till self-sufficiency is achieved. Therefore, the intent of the policy is clearly to promote consumption of the domestic production. The said Clause further provides for registration of the import contracts. Clause 17 of the Policy is reproduced hereinbelow: 17. Import of poppy seeds will continue till self-sufficiency is achieved. The policy is to allow import of poppy seeds from any country provided it has originated in any of the countries authorized internationally to grow opium poppy for export and that it has been legitimately cultivated. No import will be allowed from countries where opium poppy is not legitimately cultivated. All contracts for import of poppy seeds will be compulsorily registered with the Narcotics Commissioner. Before registering such contracts, the Narcotics Commissioner shall satisfy that the country from which the poppy seeds are proposed to be imported legally cultivates opium poppy and can produce the quantity of seeds which are sought to be imported. 18. The Guide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmination is to be based on the production of poppy seeds in Turkey in a crop year, the balance available from the previous crop year and the domestic or other export requirement of Turkey, it cannot be said that the Government of India becomes obliged to allow the import of the entire quantity of poppy seeds as may be communicated by the Government of Turkey to be available for export from it. 22. A fair and harmonious reading of the above Clauses would clearly show that even though one of the relevant consideration for determination of the Country Cap is the quantity of the poppy seeds available in Turkey for exports, the same is not the sole criteria, and such determination can take place based on other relevant criteria/considerations, such as domestic production and demand of poppy seeds in India. 23. In the present case, though the Committee appointed in terms of Clause 1 of the Guidelines acknowledges the availability of 8438 MTs of poppy seeds in Turkey for exports to India, the Competent Authority has taken into account the imports allowed from China and Czechoslovakia, the domestic licit production of poppy seeds in 2019, and the expected production/availability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Foreign Trade (Development and Regulation) Act, 1992. 28. This argument, however, need not detain me as in none of these petitions, there is a challenge laid to the Guidelines. In any case and as noted therein above, Clause 3(c) of Section II, Chapter-12 of the Schedule-1 of the Import Policy states that the registration of the contracts is to be in accordance with the guidelines issued by the Department of Revenue, which may, inter-alia, include fixing of country cap. I may also note the judgement of the Bombay High Court in Chailbihari Trading Private Limited Ors. v. Union of India Ors. MANU/MH/2412/2019 and of the Karnataka High Court in Om Traders Ors. v. The Union of India Ors. MANU/KA/0457/2018 on which reliance has been placed by the learned counsel for the respondent to contend that the Guidelines have been upheld by the court. 29. As far as the decision of the respondents not to register the contracts of the petitioners is concerned, the procedure for registration is prescribed in the Guidelines, the relevant clauses of which are reproduced hereinbelow: III. PROCEDURE (i) Once the application is received by Narcotics Commissioner, reque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to enable regulation of export of poppy seeds from Turkey to India. Exporting companies shall submit application through the Agean Exporters Association (EIB) (responsibility given by law) to TMO for obtaining membership of the online System. 2. Each year, the quantity of poppy seeds which shall be imported by India from Turkey shall be decided by Government of India in consultation with Government of Turkey taking into account the production of poppy seeds in Turkey in a crop year, balance from previous crop years and domestic or other export requirement of Republic of Turkey. 3. The exporting companies shall get registered with the TMO. Each sales contract entered into by the exporting company with Indian importer shall be registered with TMO through the online system referred. It shall be the responsibility of TMO not to register sales contract in excess of the quantity referred to in Para 2 above. xxxxxx 5. The Central Bureau of Narcotics (CBN) will register the sales contract registered by TMO as per details accessed on the online system maintained by TMO in accordance with guidelines for registration laid down by Ministry of Finance, Government of India. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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