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TMI Blog2021 (3) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... . LTD. VERSUS UNION OF INDIA [ 2008 (9) TMI 213 - MADRAS HIGH COURT] , considering the similar notification dated 4.6.2008 issued by the DGFT with regard to restricting the import of betel nuts valued at ₹ 35/- or more per kg., held that the DGFT has no power to issue the notification under section 5 read with section 6(3) of the Foreign Trade Act on artificial basis. Thus, it is clear that DGFT has not exercised powers under section 3 of the Foreign Trade Act but has merely authenticated an order which relates to the DGFT in accordance with the authentication rules. Therefore, the contention raised by the petitioners that DGFT has no authority to issue such notification is not sustainable in view of above dictum of law. In view of the provisions of the Customs Act and Foreign Trade Act, notification issued by the DGFT is to be considered as notification issued by the Central Government which is binding upon the petitioners as the same is issued in exercise of powers vested in the Central Government under section 3(2) of the Foreign Trade Act - the contentions raised by the petitioners with regard to the validity of the notification fails. The impugned notification cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons that may be deemed fit by this Hon'ble Court; (D) Pending hearing and final disposal of the present petition, Your Lordship may be pleased to restrain the Respondents, their servants and agents from recovering any amount from the petitioner pursuant to Notice F.No.VIII/48-622/Gr-I/MCH/19-20 dated 16.8.2019 (Annexure- D ); (E) An ex-parte ad-interim relief in terms of Para 13 (C) and (D) above may kindly be granted. (F) Any other further relief that may be deemed fit in the facts and circumstances of the case may also please be granted. 4.Brief facts of the case are as under : 4.1) The petitioners are engaged in trading of the various commodities for last seven years and has been importing broken cashew kernels for trading of such commodity in the local market. 4.2) In the course of business, the petitioners entered into contracts with two Vietnam based suppliers i.e. M/s. Gotec Commodities (Vietnam) Co. Ltd and M/s. Thien Ma Production Trading Import Export Co. Ltd. for purchasing broken cashew kernels from them and regular sale/purchase contracts have been made by the petitioners incorporating therein the commercial details and terms like grade of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to agree for paying customs duties for two consignments on the basis of MIP of ₹ 288 per Kg for two bills of entry filed on 15.06.2019 and 19.06.2019 as these consignments were not assessed at the transaction value and the petitioners accordingly paid customs duties aggregating to ₹ 29,47,660/- for these two consignments. Since these two consignments were not being cleared by assessing duties on transaction value and the petitioners were suffering on account of go-down charges etc; a letter dated 1.07.2019 was submitted by the petitioners requesting the respondent no.2 for clearance of these goods on MIP; and therefore duties were assessed and recovered from the petitioners on MIP and not the transaction value. 4.7) Therefore, the petitioners have preferred this petition for examination of dated 2.12.2013 issued under section 5 of the Foreign Trade Act as the same being ultra vires to section 5 of the Foreign Trade Act and also section 14 of the Customs Act. 5. The learned advocate Mr. Paresh M. Dave with learned advocate Amal P.Dave for the petitioners submitted that the notification no. 53 issued under section 5 of Foreign Trade (Regulation and Development) Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 14 of the Customs Act and therefore, the MIP as tariff value for any imported goods including cashew kernel can be fixed and notified only by the Board while exercising powers under section 14(2) of the Customs Act. It was submitted that the notification no. 53 dated 2.12.2003 is not issued by the Board under section 14(2) of the Customs Act fixing and notifying the tariff value of cashew kernel (broken) as well as cashew kernel (whole) and hence such notification is ultra vires to section 14(2) of the Customs Act. 9. The learned advocate Mr. Dave would submit that the powers conferred upon the Government and the DGFT under the provisions of Foreign Trade Act do not empower to fix any price or minimum value for importing any goods in India because section 5 of the Foreign Trade Act only provides for empowering the Central Government to formulate and announce the Foreign Trade Policy from time to time. Reference was made to section 3 of the Foreign Trade Act to point out that the Foreign Trade Policy is for making provision for development and regulation of foreign trade by facilitating imports and increasing the exports and under sub-section (2) of section 3, the Central Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tification is contrary to Article 14 the Constitution Of India, firstly, on the ground that the price is fixed on an artificial basis as far back as in December 2013 which continued even when the petitioner imported the commodities in question, almost after six years without any change or amendment and secondly, one single or uniform price is fixed for all varieties and grades of cashew kernel(broken) and thereby equally treating unequal. It was therefore, submitted that the impugned notification is ultra vires to Article 14 of the Constitution of India. 13. The learned advocate Mr. Dave further submitted that the impugned notification is issued on 2.12.2013 fixing MIP of cashew kernel (broken) as ₹ 288/- per kg, whereas the commodity in question was actually being sold and offered for sale in the international market at much lower price and therefore, fixing of an artificial higher import price of ₹ 288/- per kg is not based on any reliable data or information about actual price at which such commodity was sold or offered for sale in the international trade. 14. The learned advocate Mr. Dave therefore, submitted that the impugned notification prescribing the MIP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned notification no.53 on the same grounds which were considered by the Madras High Court and Calcutta High Court in the above judgments. The learned advocate Mr. Dave therefore, prayed that on similar grounds as considered by the Madras High Court and the Calcutta High Court, the impugned notification no.53 also be held unconstitutional. 18. On the other hand, learned Standing Counsel Mr. P.Y.Divyeshwar appearing for the respondents raised the preliminary objection that the petition is not maintainable as there is alternative efficacious remedy available to the petitioners under the section 130 of the Customs Act whereby an appeal may be preferred before the Commissioner (Appeals) against the order passed by the Assistant Commissioner. 19. The learned advocate Mr. Divyeshwar with regard to the challenge to the constitutional validity of the impugned notification no. 53 dated 2.12.2013 submitted that when the petitioners filed bill of entry no. 3673973 dated 15.06.2019 and BE No. 3715746 dated 19.6.2019 for clearance of imported goods having same description as cashew kernels (broken) Grade BB (Broken Bits) under CTH 08013290, it was found during the examination t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) of the Customs Act, 1962 as the petitioners were required to declare correct details/particulars in Bill of Entry being filed by them. It was submitted that according to Section 111(m) of the Customs Act, the goods imported by the Petitioner were 'restricted goods' as they were imported at a price lower than the prescribed MIP for that category of goods and therefore liable for confiscation under 111(d),111(m) and 111(o) of the Customs Act, 1962. 22. The learned advocate Mr. Divyeshwar further submitted that section 3 of the Foreign Trade Act prescribes powers to make provisions relating to imports and exports empowering the Central Government to make provisions for the development and regulation of foreign trade by facilitating imports and increasing exports. In exercise of such powers, the impugned notification no. 53 was issued. It was submitted that by the impugned notification, amendment made by the Central Government in the import policy by exercising its powers under section 3 of the Foreign Trade Act is authenticated by the Director General of Foreign Trade since the same relates to the DGFT. It was therefore, submitted that the DGFT has not exercised powers u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of the Customs Act and the Foreign Trade Act as well as to the Article 14 of the Constitution of India or not? 26. With regard to the preliminary issue raised by the respondents regarding maintainability of the petition as the petitioner has challenged the Constitutional validity of the impugned notification, the petition is held to be maintainable under Article 226 of the Constitution of India. 27. It is not in dispute that the petitioners imported cashew kernel (broken) from Vietnamese suppliers for a price ranging from ₹ 151/- to ₹ 180 /- per kg in Indian currency which is the transaction value ordinarily required to be considered for levy of custom duty as per provision of section 14 of the Customs Act. 28. Notification no. 53 (RE-2013)/2009-2014 dated 2nd December, 2013 reads as under : In exercise of powers conferred under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraph 2.1 of the Foreign Trade Policy, 2009-2014, as amended from time to time, the Central Government hereby makes the following amendment in Chapter 8 of ITC (HS) 2012, Schedule 1 (Import Policy). 2. The minimum CIF value of Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een evolved for such import and the said notification goes contrary to such policy. 31. This Court in case of Premium Pulses Products Kusum Agency (supra), while considering such notification issued by the Central Government under section 3 of the Foreign Trade Act, held as under : 12. A perusal of the impugned notification reveals that by virtue of such notification the Central Government, in exercise of powers conferred by section 3 of the Act read with paragraphs 1.02 and 2.01 of the Act as amended from time to time, has amended the import policy of items of Chapter 7 of ITC(HS)2017, Schedule-1 (Import Policy) as provided there under. On a plain reading of the notification, it is clear that powers under section 3 of the Act have been exercised by the Central Government, and it is the Central Government which has amended the import policy. At the same time it can also be seen that such amendment bears the signature of the Director General of Foreign Trade, which is the root cause of the dispute raised in these petitions. On behalf of the respondents it has been contended that the import policy has been amended by the Central Government in exercise of powers under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 3 of the Foreign Trade Act but has merely authenticated an order which relates to the DGFT in accordance with the authentication rules. Therefore, the contention raised by the petitioners that DGFT has no authority to issue such notification is not sustainable in view of above dictum of law. 34. With regard to the contention of the petitioners that the price fixed by the DGFT in the year 2013 did not vary and therefore, the same is without any rationale, it is emerging from the facts that the petitioner having accepted such price for two of the bill of entries being bill of entry nos. 3673973 and 3715746 and custom duty being paid accordingly, the petitioner now cannot say that such price fixed by the impugned notification is without any rationale. The petitioners have raised such contentions only with a view to see that proper adjudication is not done by the authority for levy of duty on the differential price as per the notification no. 53 and the price at which the petitioner imported the goods. The notification no. 53 dated 2.12.2013 is similar to what is challenged before this Court as well as before the Madras High Court and the Calcutta High Court and all the High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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