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TMI Blog2023 (3) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... e FTP and consequently, the DGFT does not have jurisdiction or authority of law to stipulate any condition contrary to the FTP and which has the effect of amending, modifying or altering the FTP, thereby establishing that condition x in the Public Notice dated 14.06.22 being contrary to Para 2.13 of FTP, the same clearly tantamounts to amending the provisions of the FTP, which power cannot be exercised by the DGFT, especially when the power to amend the FTP is within the sole domain of the Central Government and not by the DGFT and on this ground also, the impugned condition x and consequential condition in the TRQ issued in favour of the petitioner deserve to be quashed. Issuance of license is only procedural aspect and in any case, the DGFT cannot impose conditions and restrictions in license which are contrary to FTP and FTDR Act and any such condition cannot be sustained in law. On this score also, the impugned condition x is not sustainable in law. Under similar circumstances in Kanak Export s case supra, the Apex Court held that exports and imports shall be free, except in cases where they are regulated by the provisions of the said Policy or any other law for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Notification No. 30/2022-Cus dated: 24.05.2022 on such clearance. (d) Issue a writ of Mandamus or any other appropriate writ, order or direction while directing the Respondents to account for the clearance of 4000 MT s of of the subject goods, as stated above, against the Tariff Rate Quota dated: 05.07.2022 vide Annexure-M issued to the petitioner while also extending the benefit of Notification No. 30/2022- Cus dated: 24.05.2022 vide Annexure-F on such clearance and refund excess duty of Rs.3,79,33,896/- paid on clearance of the said 400 MTs of the subject goods with interest @ 12 % p.a. (e) Pass any other appropriate Order(s) as this Hon ble Court may deem fit and proper in the facts and circumstances of the instant case and in the interest of justice. 2. The brief facts giving rise to the present petition as contended by the petitioner in its amended petition are as follows:- Petitioner Company is engaged in the business of solvent extraction, refining of oils, manufacture of soya food products, import, export and trading of agricultural commodities. Petitioner Company was earlier known as M/s. Ruchi Soya Industries Ltd. and the name of the Petitioner Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied online to the office of Respondent No.2 for allocation of TRQ Authorisation/ License for import of Crude Soya-bean oil and Crude Sunflower seed oil by means of Application dated 17.06.2022 and the said application was duly acknowledged by the office of Respondent No.2 vide its email dated 17.06.2022. 2.3 Petitioner submits that subsequently, Respondent No.2-DGFT, in exercise of his powers under Para1.03 and 2.04 of FTP, issued another Public Notice No.15/2015-20 dated 14.06.2022 amending para-2 of the aforesaid Public Notice No.10/2015-20 dated 24.05.2022 in addition to imposing/inserting certain further conditions. Amongst others, an additional condition was imposed as per condition x whereby import consignments landing at Indian Ports after the date of issuance of TRQ license shall only be considered for clearance under TRQ. The said condition x also stipulates that any quantities lying at the Indian ports (under warehousing etc) before the date of issuance of the TRQ license shall not be considered for import clearance under TRQ. 2.4 It is contended that after the aforesaid vessel carrying the subject goods secured berth, discharge of the subject goods in the cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of compelling circumstances and without prejudice to Petitioner s rights and contentions in law to challenge condition x imposed by Public Notice No. 15/2015-20 dated 14.06.2022. Petitioner had taken clearance of 2000 MTs of the subject goods on payment of applicable duty and on such clearance, Petitioner had paid excess duty amount of Rs.1,89,66,948/-, without prejudice its rights and contentions in law. 2.7 It is contended that subsequent to filing of the present petition on 20.07.2022, petitioner urgently needed the subject goods to keep its manufacturing unit functioning and to avoid losses. Petitioner wanted to clear the goods against the aforesaid TRQ license and had approached the Department accordingly, who pointed out that the said request cannot be entertained since the goods stood warehoused before issuance of TRQ license. Since the goods were urgently needed, Petitioner had no option but to clear 2000 MTs out of the balance quantity of 3973.04 MTs of the subject goods without tendering TRQ license for such clearance. Petitioner had accordingly filed Ex-Bond Bills of Entry dated 22.07.2022 and 28.07.2022 seeking clearance of 2000 MTs for home consumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner submitted that the impugned condition x in the Public notice dated 14.06.2022 issued by the DGFT is illegal, arbitrary and without jurisdiction or authority of law, inasmuch as the same is contrary to Clause 2.13 of the FTP and has the effect of altering and amending the FTP which is impermissible in law, since the same lies within the exclusive domain of the Central Government and not the DGFT. The FTP is framed by the Central Government under the Foreign Trade(Regulation and Development Act), 1992 (for short, the FTDR Act ) and the same provides for the DGFT to issue a Handbook of Procedure by way of a Public Notice and also amend/vary/alter the Handbook of Procedure by way of a Public Notice. The DGFT is empowered or authorized only to issue a public notice as aforesaid to regulate the procedure and not change/alter/modify the FTP which can be done only by the Central Government. In the instant case, the impugned condition x in the Public Notice is issued by the DGFT and not by the Central Government and the same being contrary to the FTP and having the effect of altering and modifying clause No.2.13 of the FTP is clearly illegal and without jurisdiction. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Traders Anr.- W.A.No.480/2011 dated 02.11.2020 High Court of Kerala at Ernakulam. 7. The only question that arises for consideration in the present petition is with regard to the legality and validity of condition x mentioned in para-2 of the Public Notice at Annexure-J dated 14.06.2022 and consequential condition No.3 in the Condition sheet of the TRQ dated 05.07.2022 (Annexure-M) issued / allotted to the petitioner, whereby the subject goods of the petitioner lying at Indian Ports (under warehousing etc.,) before the date of issuance of TRQ licence are directed by the respondents not to be considered for import clearance under TRQ. 8. Before adverting to the rival contentions, it is necessary to refer to certain provisions of the Foreign Trade (Development and Regulation) Act, 1992 (for short the FTDR Act) and the Foreign Trade Policy 2015-2020 (FTP); FTDR Act: As per Section 5 of the FTDR Act, the Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner, amend that policy. As per Section 6(3) of FTDR Act, the Central Government may, by O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may, by means of Public Notice, notify Hand Book of Procedure, including Appendices and Aayat/Niryat Forms or amendment thereto, if any, laying down the procedure to be followed by an exporter or importer or by any Licensing/Regional Authority or by any other authority for purposes of implementing provisions of FT (D R) Act, the Rules and the Orders made there under and provisions of FTP. As per Para2.04 of FTP, DGFT may by means of Public Notice specify procedures, amongst others, to be followed by an exporter or importer or by any Licensing / Regional Authority or by any other authority for purpose of implementing provisions of FT (D R) Act, the Rules and the Orders made there under and provisions of FTP. Para 2.04 of FTP is reproduced below for ready reference: Para 2.04 Authority to specify Procedure - DGFT may, specify Procedures to be followed by an exporter or importer or by any Licensing/Regional Authority (RA) or by any other authority for purpose of implementing provisions of FT (D R) Act, the Rules and the Orders made there under and provisions of FTP. Such procedures, or amendments if any, shall be published by means of a Public Notice. 8.2 A pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e procedure for implementation of the FTP and the same cannot override the provisions of the FTP which is formulated and framed by the Central Government and not by the DGFT. 9. It is significant to note that as per Para 1.02 of the FTP, only the Central Government can amend the FTP by means of Notification, in public interest; further, as per Para1.03 and Para2.04 of the FTP, the DGFT by means of Public Notice can notify and amend only the Hand Book of Procedure, amongst others, for laying down the procedure to be followed by an exporter or importer for the purpose of implementation of the FTP. In other words, while the power to amend the FTP vests solely and exclusively with the Central Government, the DGFT has the power to issue a Public Notice prescribing and amending only the procedure; in this context, a perusal of the Public Notice dated 24.05.2022 issued by the DGFT will clearly indicate that he traces his power to Para1.03 and Para 2.04 of the FTP for the purpose of issuing the Public notice; similarly, even in the Public Notice dated 14.06.22 containing the impugned condition x , the DGFT traces his power only to Para 1.03 and Para 2.04 of FTP and in both the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stained in law. On this score also, the impugned condition x is not sustainable in law. 13. Under similar circumstances in Kanak Export s case supra, the Apex Court held as under: 2. Vide Notification No. 28 dated 28-1-2004, the Central Government sought to amend certain provisions of the EXIM Policy by inserting Notes 1 to 5, which was unpalatable to the exporters of the goods mentioned therein as, according to them, under the guise of the said Notes, some benefits which had already accrued to these exporters under the EXIM Policy were taken away. Vide Public Notice dated 28-1-2004, the Government announced exclusion of export performance in relation to four classes of goods mentioned in Para 2 thereof from computation of the entitlement under the Scheme and, at the same time, sought to disallow the import of agricultural products falling under Chapters I to XXIV of ITC (HS) under the said Scheme. Thereafter, Notification No. 38 dated 21-4- 2004 was published under Section 5 of the Act on the same lines on which Public Notice dated 28-1- 2004 was issued. The exporters of these goods, naturally, felt aggrieved thereby. There was an innocuous amendment to Notification No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be delegated by virtue of Section 6(3) of the Act. Section 19 again confers power upon the Central Government to make rules for carrying out the provisions of the Act generally and in respect of various matters specifically enumerated in subsection (2) of Section 19. This power of the Central Government also cannot be delegated. 9. It may be noted that under Section 5 of the Act, the Central Government has been formulating EXIM policies from time to time. The Policy with which we are concerned is the EXIM Policy for the period 2002-2007, which was substituted by EXIM Policy 2004-2009. 10. The EXIM Policy of 2002-2007 was announced and came into force from 1-4-2002. Amendment to this Policy was notified on 31-3-2003 and the revised edition of the Policy was to come into force from 1-4-2003. Even though the Central Government is generally entitled and empowered to carry out amendments in this Policy from time to time, in the EXIM Policy 2002-2007, such a right was specifically reserved stating that however, the Central Government reserves the right in public interest to make any amendments to this Policy in exercise of powers conferred by Section 5 of the Act . I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by means of a public notice. It was permissible to amend this procedure from time to time. 86. The next issue relates to the validity of the Public Notice dated 28-1-2004. The question that is posed for determination on this issue is as to: III. Whether Public Notice dated 28-1-2004, issued by DGFT, which sought to exclude the export performance related to class of goods, is without jurisdiction? 87. The main submission of the petitioners, which was before the High Courts as well and reiterated before us, was that the Public Notice dated 28-1-2004 seeks to amend the EXIM Policy and DGFT does not have any such power inasmuch as this EXIM Policy is statutory which is issued under Section 5 of the Act by the Central Government and, therefore, it is only the Central Government which has the power to make amendments to the EXIM Policy. Therefore, the Public Notice issued by DGFT dated 28-1-2004 was without jurisdiction. An additional ground of retrospectivity was also taken to challenge the public notice. It was also argued that DGFT by the said public notice was seeking to impose additional conditions, not forming part of the original policy which was again imper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subordinate to the Director General, as may be specified in the Order. 90. From the aforesaid, it is clear that Section 5 provides that the Central Government may, from time to time, formulate and announce, the EXIM Policy. This has to be done by issuing/announcing this Policy by way of notification in the Official Gazette. The Central Government also has the power to amend the Policy so announced by adopting the same procedure i.e. by issuing notification in the Official Gazette. It is not in dispute that the EXIM Policy in question was issued by notification in exercise of powers conferred under Section 5 of the Act. This Policy, thus, is infested with statutory flavour. 91. For the purpose of carrying out the objectives of the Act which includes implementation of the Policy, the Central Government is authorised to appoint DGFT as per Section 6 of the Act. The main functions of DGFT are advising the Central Government in formulation of the Policy and he is also responsible fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Policy. Such procedures shall be included in the Handbook (Vol. 1), Handbook (Vol. 2), Schedule of DEPB Rate and in ITC (HS) and published by means of a public notice. Such procedures may, in like manner, be amended from time to time. The Handbook (Vol. 1) is a supplement to the EXIM Policy and contains relevant procedures and other details. The procedure of availing benefits under various schemes of the Policy are given in the Handbook (Vol. 1). 93. It is explained by the learned counsel for the Union of India that a notification issued under Section 5 of the Act or any change brought about by DGFT in exercise of the powers under Para 2.4 of the Import and Export Policy in the Handbook Procedure, by way of a public notice the same are gazetted and notified in the Gazette of India. It is also pointed out that the notification/public notices issued relating to non-statutory rules, regulations, order and resolutions issued by the Ministries of Government of India (other than the Defence Ministry), and by the Supreme Court of India are published under Part 1 Section 1 of the Gazette of India. On the other hand, notifications issued by the Ministries of Government of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra. 15. Insofar as the judgment of the Apex Court in AGRICAS LLP s case supra relied upon by the respondents is concerned, a perusal of para-15 of the said judgment will indicate that the same were issued by the Central Government and that the DGFT had performed only the ministerial act of publication and that the decision to amend and issue the Notification was that of the Central Government. The said judgment is inapplicable to the facts of the instant case, since, as stated supra, the power to amend the FTP is vested solely and exclusively with the Central Government in terms of Para 1.02 of the FTP. In this context, as is clear from the Public Notice dated 14.06.2022 containing the impugned condition x , the said Public Notice is traceable to Para 1.03 and Para 2.04 of the FTP and not to Para 1.02 of the FTP. To put it differently, amendment to the FTP can be done only by the Central Government under Para 1.02 of the FTP, whereas amendment to the procedure can be done by the DGFT under Para 1.03 and Para 2.04 of the FTP. 16. Under these circumstances, in the light of the undisputed fact that the Public Notice dated 14.06.2022 containing the impugned condition x has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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