Madras High Court
M/S.Hira Traders vs Http://Www.Judis.Nic.In on 4 April, 2019
Author: Pushpa Sathyanarayana
Bench: Pushpa Sathyanarayana
1
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 04.04.2019
CORAM
THE HONOURABLE Mrs. JUSTICE PUSHPA SATHYANARAYANA
W.P.Nos.15921 to 15924 of 2018, 16934, 16935, 19684, 21083,
21084, 21334, 21454, 21455, 21746, 21747, 22340, 22341, 23854,
24110, 24249, 24281, 24290, 24296, 24363, 24366, 24367, 24371,
24390, 24406, 24427, 25030, 25247, 24248, 25343, 25345, 25362,
25470, 25484, 25485, 25488, 25489, 25519, 25606, 25607, 25616,
25774, 25844, 25890, 26067, 26077, 26090, 26103, 26371, 26388,
26408, 26416, 26424, 26433, 26440, 26464, 26471, 26475, 26479,
26486, 26495, 26789, 26793, 26892, 26895, 26915, 26985, 26987,
26993, 27056, 27062, 27073, 27082, 27268, 27273, 27275, 27281,
27285, 27311, 27312, 27319, 27327, 27334, 27336, 27339, 27342,
27361, 27370, 27378, 27417, 27710, 27735, 27757, 27816, 27817,
27822, 27826, 27828, 27848, 27860, 27871, 27887, 27913, 27921,
27930, 27933 to 27935, 27972, 28021, 28025, 28028, 28036, 28039,
28080, 28082, 28089, 28100, 28119, 28127, 28135, 28152, 28157,
28160, 28168, 28171, 28177, 28178, 28184, 28198, 28258, 28355,
28373, 28392, 28402, 28413, 28418, 28429, 28437, 28448, 28453,
28471, 28510, 28505, 28597, 28603, 28614, 28646, 28653, 28674,
28679, 28685, 28686, 28721, 28724, 28803, 28819, 28912, 28931,
28942, 29270, 29279, 29649, 29810, 29817, 29820, 29824, 29828,
29830, 29833, 29837, 29857, 29863, 29988, 29993, 30001, 30005,
30013, 30153, 30161, 30228, 30314, 30493, 30588, 31447, 31456,
31464, 32134, 32153, 32573, 32956, 32958, 33349, 33362, 33390,
33413, 33593, 33596, 33602, 33604, 33605, 33609 of 2018 and
364, 806, 812, 819, 1296, 1421, 1448, 1450, 1453, 1454, 1472,
1473 and 2107 of 2019
and connected W.M.Ps
W.P.No.15921 of 2018 :
M/s.Hira Traders
No.89/2, Old No.44/2, Varada Muthaiappan Street,
Chennai-600 001
rep by its Partner Shri Haji Sumar Kudus .. Petitioner
Vs.
http://www.judis.nic.in
2
1. The Director General of Foreign Trade,
Ministry of Commerce & Industries,
Department of Commerce,
Udyog Bhavan H Wing, Gate No.2,
Maulana Azad Road, New Delhi-110 011.
2. The Joint Director General of Foreign Trade,
Ministry of Commerce & Industries,
Department of Commerce,
Udyog Bhavan H Wing Gate No.2,
Maulana Azad Road, New Delhi-110 011.
3. The Additional Director General of Foreign Trade,
4th and 5th Floor, Shastri Bhavan Annex Building,
26, Haddows Road, Chennai-600 006.
4. The Commissioner of Customs,
Chennai II Commissionerate,
Custom House, 60, Rajaji Salai,
Chennai-600 001. .. Respondents
***
Prayer : Writ Petition filed under Article 226 of the Constitution of
India praying for issuance of a Writ of Certiorarified Mandamus calling
for records in and connected with Notification No.4/2015-2020 dated
25.04.2018 issued from F.No.M-5012/300/2002-PC 2(A)/ Part-VI/E-
9019 read with Trade Notices No.05/2018 dated 09.05.2018
No.10/2018-19 dated 16.05.2018 and No.12/2018 dated 18.05.2018
and Notification No.05/2015-20 dated 25.04.2018 attributable to the
1st and 2nd respondents and quash the same and further direct the 4th
respondent to permit clearance of approximately 70 MTs of whole
yellow peas (pisum sativum) falling under EXIM Code 07131000 in
terms of sales contract No.6194D dated 31.03.2018.
***
For Petitioner in : Mr.Vijay Narayan, Senior Counsel
for Mr.B.Sathish Sundar
For Respondents : Mr.G.Rajagopalan,
Additional Solicitor General of India
assisted by Mr.J.Madhanagopal Rao,
Senior Panel Counsel for RR 1-3
Ms.Aparna Nandakumar, CGSC for R4
http://www.judis.nic.in
3
COMMON ORDER
Since the prayer of the petitioners in these writ petitions is to quash the notifications and the consequential trade notices issued either by the Director General of Foreign Trade (DGFT) or the Joint Director of Foreign Trade, they are taken up for hearing together and disposed of by means of this common order.
2. The background facts leading to the filing of these writ petitions would run thus :
2.1. The petitioners are importers and exporters of pulses, spices and other products and mostly are engaged in the said business for more than 10 years. Each of the petitioners are favoured with an Import Export code number issued by the DGFT.
2.2. The petitioners import such pulses, cereals or spices from various suppliers from different countries. While so, the first respondent in terms of the powers conferred under the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter referred to as, "the FTDR Act" amended the import policy pertaining to the import of pigeon peas by Notification N.19/2015-2020, dated 05.08.2017. By virtue of the said notification, the import policy of items of Chapter 7 of http://www.judis.nic.in 4 the ITC (HS), 2017, Schedule I with respect to Pigeon Peas/Toor Dal was revised from "free" to "restricted" with an annual (fiscal year) quota of 2 lakh MT.
2.3. The said notification was followed up with another notification in Notification No.22/2015-2020 dated 21.08.2017 once again seeking to amend the import policy. This notification amended the import policy of Beans of the species Vigna Mungo (L.) Hepper (Moong Dal) from "free" to "restricted" with an annual (fiscal year) quota of 3 lakh MT.
2.4. The petitioners submitted that for the purpose of implementation of the Notification No.22/2015-2020, dated 21.08.2017, the second respondent issued a Trade Notice No.19/2017 dated 25.10.2017. In this Trade Notice, it is stated that pursuant to the Notification No.22/2015-2010, dated 21.08.2017, representations have been received stating that some firms have entered into contracts prior to 21.08.2017 for import of moong/urad dal with either
(i) advance payment, or (ii) some advance payment and rest amount payable in Cash Against Documents (CAD), or (iii) 100% CAD and hence, exercising the powers under para 2.58 of the Foreign Trade Policy (in short "FTP"), by relaxing the provision of para 1.05, registration of such contracts were sought for with the Regional http://www.judis.nic.in 5 Authorities (RA) of DGFT for import of the said dals, in case advance payment had been made (full or in part) prior to 21.08.2017 with proof. The last date for such registration was fixed at 5.00 p.m. on 31.10.2017.
2.5. The first respondent issued Notification No.6/2015-2020 on 04.05.2018 seeking to partially modify the Notification No.22/2015- 2020, dated 21.08.2017 to the effect that the import of Urad and Moong Dal shall be subject to an annual (fiscal year) limit of 1.5 lakh MT each, totalling to 3 lakh MT. The said notification was also followed by the Trade Notice No.6/2018-2019, dated 11.05.2018 seeking applications from the millers/refiners for import of 2 lakhs MT of Pigeon Peas (Toor Dal) and 1.5 lakh MT each for Urad and Moong dals. This measure was to ensure that the total quota to be imported should not exceed the prescribed limit.
2.6. By virtue of the above notifications, the emphasis laid in these writ petitions is that the policy of the respondents changed the categorisation from ‘free’ to ‘restricted’ trade with regard to the products and on the conditions mentioned in the notifications.
2.7. With respect to Peas also, the office of the first respondent issued a Notification No.04/2015-2020, dated 25.04.2018 seeking to amend the said import policy under Chapter 7 of the ITC (HS) 2017, http://www.judis.nic.in 6 Schedule -I (Import Policy). In the light of the above notification, the amendment was brought about to the effect that the import of Peas is restricted for the period from 01.04.2018 to 30.06.2018 to the total quantity of one lakh MT of yellow peas minus the quantity already imported from 01.04.2018.
2.8. The said notification was also followed up by three trade notices issued by the second respondent in connection with the implementation of Notification No.4/2015-2020, dated 25.04.2018. Trade Notice No.5/2018, dated 09.05.2018, was issued seeking the importers to submit the documents to prove the quantity contracted and the amount paid enabling the DGFT to assess the remaining quantity and also to lay down further procedure for import of the same.
2.9. Trade Notice No.10/2018-19, dated 16.05.2018 was issued to clarify the Notification No.4 to the effect that the restriction on import of peas includes all pea items classified under EXIM Code 0713 1000 and it was not restricted to 'yellow peas' alone.
2.10. Trade Notice No.12/2018, dated 18.05.2018, was issued to clarify the transitional arrangement. As per the said trade notice, "already imported" will include shipment already arrived from 01.04.2018 till 25.04.2018 and those shipments backed by Irrevocable http://www.judis.nic.in 7 Commercial Letter of Credit (ICLC) and Advance Payment of 100% made through Banking Channel before 25.04.2018. They were sought to be registered with the jurisdictional Regional Authority.
2.11. The petitioners further stated that, in the meanwhile, the first respondent issued Notification No.5/2015-2020, dated 25.04.2018, amending para 1.05 (b) of the foreign trade policy 2015- 2020 referred to in the Trade Notice No.10/2018-19, dated 16.5.2018.
2.12. The operative portions of the Trade Notification No.04/2015-2010, Trade Notice Nos.5/2018, 10/2018-19 and 12/2018 and the Trade Notification No.05/2015-2020 read in that order hereunder :
"Notification No.04/2015-2020, dated 25 April, 2018 **** Subject: Amendment in Import policy of Peas under Chapter 7 of the ITC (HS) 2017, Schedule - I (Import Policy) S.O (E): In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy 2015-2020 as amended from time to time, the Central Government hereby amends the import policy of items of Chapter 7 of the ITC (HS) Schedule - I (Import Policy) as under:
Exim Code Item Existing Policy Existing Policy Revised Imort Revised Policy Description condition Policy condition 0713 1000 Peas (Pisum Free - Restricted Restricted for the period sativum) from 01st April to 30th June, 2018 and subject to Policy Condition 4 of this Chapter Policy Condition 4: During the period from 01st April to 30th June, 2018 total quantity of one lakh MT of yellow peas minus the quantity http://www.judis.nic.in 8 already imported from 01.04.2018 till date will be allowed against license as per procedure to be notified by DGFT.
“Already Imported” will include shipment already arrived from 01.04.2018 till 25.04.2018 and those shipments backed by irrevocable Commercial Letter of Credit (ICLC) and Advance Payment made through Banking Channel before 25.04.2018 Both these categories will be required to be registered with Jurisdictional Regional Authority as per Para 1.05 of Foreign Trade Policy, 2015-20.
2. Effect of this Notification: Import Policy of Yellow Peas under Exim Code 0713 1000 is revised from free to ‘restricted’ for period of three month only.
Sd/-
(Alok Vaardhan Chaturvedi) Director General of Foreign Trade Email:[email protected]"
"TRADE NOTICE NO. 05/2018, 9th May, 2018 **** Subject: Implementation of Notification No. 4 dated 25.4.2018-reg.
Reference is invited to Notification No. 4 dated 25.4.2018 amending the import policy of Peas under Exim Code 0173 1000 Chapter 7 of the ITC (HS) 2017 on the above subject.
2 In this regard, as already notified, total quantity of Peas available for import during thee period from 01st April to 30th June, 2018 is one lakh MT minus the quantity already imported from 01.01.2018 3 Accordingly, to assess the remaining balance, importers who have already contracted for import of peas before the date of issue of the Notification and have paid in advance (full or in part) for the same or have opened irrevocable letters of credit for such imports before 25.04.2018, they may furnish such documents indicating the quantity contracted and http://www.judis.nic.in 9 amount paid, so as to enable this Directorate to lay down further procedure for import of the remaining quantity.
4 The requisite information, alongwith supporting documents may kindly be furnished latest by 18th May, 2018 (5:00 p.m) at policy2- [email protected] and shyama [email protected].
Sd/-
(S.P Roy) Joint Director General of Foreign Trade"
"TRADE NOTICE NO. 10/2018-19 Dated 16th May, 2018 **** The Directorate General of Foreign Trade has been receiving a number of queries seeking clarification on the Notification No. 04/2015-20 dated 25th April, 2018 vide which the import policy of Peas under Chapter 7 of the ITC (HS) 2017 has been amended.
In the matter, it has been observed that even though the Notification clearly lays down that the Import Policy of 07131000 - Peas has been revised with revised policy condition, the effect of Notification, it has been indicated that the Import Policy of Yellow Peas has been restricted. Accordingly, vide this Trade Notice it is clarified that the Import Policy of item under Exim Code 07131000-Peas (pisum sativum), which includes all Peas (Yellow peas, Green peas, Dun peas, and Kaspa peas), has been restricted, and the effect is not restricted to only “Yellow Peas”, but to all items classified under Exim Code 0713 1000.
It is further clarified that in cases where the import shipment of Peas are dated 1.4.2018 till 24.4.2018, no registration with DGFT is required for shipments with B/L prior to 25th April, 2018 (i.e 1.4.2018 - 24.4.2018), as the Notification No. 4 restricting import of peas was issued only on 25.4.2018.
In this regard, please refer to Notification No. 5 dated 25.4.2018 wherein the revised Para 1.05 of FTP (2015-20) clarifies that whenever http://www.judis.nic.in 10 Government brings out a policy change of a particular item, the change will be applicable prospectively, from the date of Notification unless otherwise provided for.
Sd/-
(S.P Roy) Jt.DGFT” "TRADE NOTICE NO.12/2018 Dated 18th May 2018 **** Subject : Implementation of Notification No.4, dated 25.4.2018-reg.
Reference is invited to Notificated No.4 dated 25.4.2018 amending the import policy of Peas under Exim Code 0713 1000, Chapter 7 of the ITC (HS) 2017 from 'Free' to 'Restricted'.
2. In the said Notification, inter alia, the following was provided for transitional arrangement.
"Already Imported" will include shipment already arrived from 01.04.2018 till 25.04.2018 and those shipments backed by Irrevocable Commercial Letter of Credit (ICLC) and Advance Payment made through Banking Channel before 25.04.2018. Both these categories will be required to be registered with Jurisdictional Regional Authority as per Para 1.05 of Foreign Trade Policy, 2015-20.
3. Clarifications were sought by some RAs whether 'advance payment' in the above paragraph will include part advance or only full advance payment. It has been decided that apart from ICLC, only those shipments which are backed by 100% advance payments before 25 April, 2018, will qualify to be registered by the Regional Authorities of DGFT.
4. In cases where RAs have already registered contracts with part advance payments, such cases may be treated as recalled/cancelled http://www.judis.nic.in 11 henceforth. Accordingly, RAs/Customs Commissioners may take necessary action.
Sd/-
(S.P.Roy) Joint Director General of Foreign Trade"
"Notification No.05/2015-2020 dated 25 April, 2018 Subject : Amendment in Para 1.05(b) of Foreign Trade Policy 2015- 2020 S.0. (E): In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time ot time, the Central Government hereby amends the provision in Para 1.05 (b) of the Foreign Trade policy (2015-
20) on Transitional Arrangements as under:
1.05: Transitional Arrangements Existing Para Revised Para
(b) In case an export or import (b) Item wise Import/Export Policy is that is permitted freely under FTP delineated in the ITC (HS) Schedule I is subsequently subjected to any and Schedule II respectively. The restriction or regulation, such importability/ exportability of a export or import will ordinarily be particular item is governed by the permitted, notwithstanding such policy as on the date of restriction or regulation, unless import/export. The date of import/ otherwise stipulated. This is export is defined in para 2.17 of HBP, subject to the condition that the 2015-20. Bill of Lading and Shipping shipment of export or import is Bill are the key documents for made within the original validity deciding the date of import and period of an irrevocable export respectively. In case of change commercial letter of credit, of policy from free' to established before the date of 'restricted/prohibited/state trading' or imposition of such restriction and 'otherwise regulated', the it shall be restricted to the import/export already made before balance value and quantity the date of such regulation/restriction available and time period of such will not be affected. However the irrevocable letter of credit. For import through High Sea sales will http://www.judis.nic.in 12 Existing Para Revised Para operationalising such irrevocable not be covered under this facility.
letter of credit, the applicant shall have to register the Letter of Further, the import/export on or after Credit with jurisdictional Regional the date of such regulation/restriction Authority (RA) against will be allowed for importer/exporter computerized receipt, within 15 has a commitment through days of the imposition of any such Irrevocable Commercial Letter of restriction or regulation. Credit (ICLC) before the date of imposition of such restriction/ regulation and shall be limited to the balance quantity, value and period available in the ICLC. For operationalising such ICLC, the applicant shall have to register the ICLC with jurisdictional RA against computerized receipt within 15 days of imposition of any such restriction/regulation.
Whenever, Government brings out a policy change of a particular item, the change will be applicable prospectively (from the date of Notification) unless otherwise provided for.
2. Effect of this Notification: Transitional Arrangements provision has been detad under para 1.05 (b) of Foreign Trade policy (2015-20).
Sd/-
(Alok Vardhan Chaturvedi) Director General of Foreign Trade"
3. According to the petitioners, such an amendment in the foreign trade policy is the sole prerogative of the Central Government as is set out in Sections 3, 5 and 6 of the FTDR Act. The powers of the first respondent have been clearly demarcated and defined. According http://www.judis.nic.in 13 to the petitioners, when the respondents do not have powers, as the power only vests with the Central Government, the first respondent had revised para 1.05 of Foreign Trade Policy. The contention of the petitioners is that the trade notices did not indicate that they have been issued either with the concurrence or the approval of the Central Government (DGFT), which is the clear mandate of Section 6 of the FTDR Act. According to the petitioners, the DGFT does not have the power to issue the above referred notifications. It is stated that the Notification No.4, dated 25.04.2018 restricted the import of peas (pisum sativum) falling under EXIM Code 0713 1000 for a period of 3 months from 01.04.2018 to 30.06.2018. Thereafter, the first respondent issued Notification No.15, dated 02.07.2018 extending the effectiveness of Notification No.4 dated 25.04.2018 for a further period of three months until 30.09.2018.
3.1. The petitioners uniformly submitted that the above said notifications have caused grave prejudice to the petitioners in as much they are unable to import the contracted quantity of Pigeon Peas/Toor Dal due to the said notifications and trade notices.
3.2. The complaint of the petitioners is that in total contrast to the earlier trade notices and also the conditions stipulated in the notifications, the impugned trade notices have been issued which are http://www.judis.nic.in 14 contrary to law particularly contrary to Sections 3, 5 and 6 of FTDR Act and the judgement of the Hon'ble Supreme Court in the Director General of Foreign Trade V. Kanak Exports, 2016 (2) SCC 226.
3.3. The respondents have sought to tinker with the Foreign Trade Policy without jurisdiction and have sought to amend the import policy by bringing all the groups falling under Exim code 0713 1000 from ‘free’ to ‘restricted’.
3.4. The above notifications and trade notices clearly indicate that they are issued under Section 3 of the FTDR Act, and the purpose of the said notifications is to revise/amend the import policy. When the statute specifically empowers only the Central Government to issue such notifications and also to amend the policy, the same cannot be delegated to the respondents in terms of provisions of Section 6(3) of FTDR Act.
3.5. The petitioners challenge the said Notifications and Trade Notices as without jurisdiction and the same cannot be implemented and they deserve to be quashed in entirety.
4. The first and second respondents resisted the writ petitions contending, inter alia, that the second respondent is a regulator of the Foreign Trade Policy with the main objective of promoting India's http://www.judis.nic.in 15 exports. The decision regarding the said regulation is taken in consultation with the concerned administrative Ministry/Department of the Central Government only. According to the respondents, their role is restricted to the extent of issuing the notification as per the decision of the Government of India. The implementation of the notification is ensured by the customs authorities and that the said respondents by themselves do not make or change the policy without the approval of the Central Government. It is further stated that the notification is always issued by the Central Government and not by the DGFT.
4.1. Reliance is placed upon the judgment of the Constitution Bench of the Apex Court in Dattatraya Moreshwar Pangarkar V. State of Bombay, AIR 1952 SC 181, wherein, it is stated that "clause (1) and (2) of Article 166 are directory only and non- compliance with them does not result in the order being invalid, and that in order to determine whether there is compliance with these provisions, all that is necessary to be seen is whether there has been substantial compliance with those requirements, whereas, in the instant case, as there is no doubt that the notification was signed and released only in its official capacity as Ex-officio Additional Secretary to the Government of India. ...... Therefore, the executive action of the Union under the allocation of Business Rules framed under Clause 3 of http://www.judis.nic.in 16 Article 77 of the Constitution assumed immunity to be called in question that the said action is not made or executed by the President. The compliance of rules clearly discernible from the executive action does not invalidate the same. The rules of business framed under Article 77 of the Constitution for convenient transaction of business of Government of India and the allocation of minister in relation to the decision of any ministers as officers but such rules cannot override the provisions of the Act or statutory rules as held in State of Haryana V. Shri.P.C.Wadwa, IPS AIR 1987 SC 1301. .... Under the allocation of Business Rules, the DGFT is a subordinate officer to discharge the functions of the Central Government except where it acts as a delegate under the FTDR Act. ........."
4.2. As the amendment to the notifications and trade notices were done only by the Central Government, the petitioners ought to have added the Union of India as a party respondent, whereas, without making the Central Government a party to the petitions, these writ petitions are not maintainable.
5. It was submitted by the counsels appearing for the petitioners that the powers of the office of the first respondent to issue such http://www.judis.nic.in 17 notification under Sections 3 and 5 of the FTDR Act was earlier considered by the Hon'ble Supreme Court in Director General of Foreign Trade V. Kanak Exports, 2015 (326) 26 (SC), wherein, it was held as follows :
"..... 94. From the aforesaid explanation, we take it that the Public Notice dated 28-1-2004 was published in the Gazette of India in accordance with the requirement of law. The question, however, is as to whether by this public notice, DGFT was only carrying out the EXIM Policy or this public notice amounted to change in the said EXIM Policy. It is crystal clear that the public notice alters the provisions of the EXIM Policy. It would, therefore, amount to amending the EXIM Policy, whether clarificatory or otherwise. There may be a valid justification and rational for exclusion of four items contained therein, as pleaded by the Union. However, it had to be done in accordance with law. When DGFT had no power in this behalf, he could not have excluded such items from the purview of the EXIM Policy by means of public notice. The power of DGFT is only to be exercised for procedural purposes and both the High Courts have rightly remarked that Para 3.2.6 inserted by the public notice goes beyond the procedural conditions.
95. In fact, the Government itself realised the same, namely, DGFT had no such power. It is for this reason that what was sought to be achieved by the said public notice, was formalised by the Central Government by issuing the Notifications dated 21-4-2004 and 23-4-2004 in exercise of powers conferred on the Central Government by Section 5 of the Act and the same four items were excluded."
http://www.judis.nic.in 18 Therefore, it was urged that the impugned trade notices and notifications issued are ex facie illegal, arbitrary and without jurisdiction.
5.1. It is also contended that the impugned notifications never sought to categorise importers into different categories. Hence, it was submitted that the Notifications and the clarifying Trade Notices are issued in clear violation of Article 14 of Constitution of India, which guarantees equality before the law and also clear violative of Article 19(1)(g) which guarantees free trade.
5.2. In response, it is contended by the learned Additional Solicitor General that the notification is always issued by the Central Government and the DGFT is only signing the notification on behalf of the Central Government. It is also contended that as per the Government of India Authentication (orders and other instruments) Rules 2002, Notification S.O.211(E) dated 16.02.2002, was issued by the Ministry of Home Affairs, in exercise of powers conferred by clause (2) of Article 77 of the Constitution and in supersession of the earlier rules, wherein, the DGFT is authorised to authenticate all orders and other instruments made and executed in the name of the President. Reference to item No.12 is useful in this regard and the same is reproduced hereunder :
http://www.judis.nic.in 19 "... in the case of order and other instruments relating to the Directorate General of Foreign Trade, by the Director General of Foreign Trade, or the Additional Director General of Foreign Trade, or the Export Commissioner or Joint Director General of Foreign Trade."
5.3. The Learned Additional Solicitor General further contended that it is only the Ministry, which has taken the decision and admittedly the DGFT has got no jurisdiction. Though the petitioners contended that it is only the Central Government that has to issue the notification and the DGFT has got no powers, they have not even impleaded the Government - Union Ministry of Commerce and Industries as respondents. The impugned notifications are issued by the Central Government and that the respondent 1 had signed and released the same only in its capacity as Ex-officio Additional Secretary to the Government of India. The said position, being that the DGFT is the Ex-
officio Additional Secretary to the Government of India, is not disputed by the learned counsel for the petitioners. It is categorically contended that the decision to issue the impugned notifications was taken in the wisdom of the Union Ministry and certainly not by respondents 1 and 2.
http://www.judis.nic.in 20 5.4. The notifications in these cases have been issued, in exercise of the statutory powers conferred by Section 3 of the FTDR Act. Therefore, an amendment to the notification has to be in a like manner. Sub-section (1) says that the Central Government may, by order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. Sub-section (2) empowers the Central Government to make provision for prohibiting, restricting or otherwise regulating in all cases or in specific 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 services or technology. Sub-section (3) says that all goods, to which any order under sub-section (2) apply, shall be deemed to be ‘goods’ and import or export of which has been prohibited under Section 11 of the Customs Act, 1962 and all the provisions of that act shall have effect accordingly. Thus, by sub-section (2) of Section 3, there is a power conferred on the Central Government to publish an order prohibiting or restricting or otherwise regulating the import or export of goods or services or technology. Section 4 continues the existing orders made under the Imports and Exports (Control) Act 1947, which is repealed by FTDR Act. In the light of the above and the clarification on the transitional arrangement by the trade notices, it has http://www.judis.nic.in 21 to be held that the trade notices do not contravene the substantive provision of Section 3 of the FTDR Act or the notification of the Central Government.
6. The stand taken is that para 1.02 and 2.01 of the Trade Policy 2015-2020 is issued and referable to the power of the Central Government under Section 5 of FTDR Act. It is also stated that the import of peas under EXIM code 07131000 is restricted for the period mentioned, i.e., from 01.04.2018 to 30.06.2018, in the notification subject to policy Condition No.4 of Chapter 7 of the ITC (HS) 2017, Schedule-I. 6.1. It is contended that the farmers of this country are the most important stakeholders in the matters related to import/export and particularly the framing of its policy on agricultural products as the Central Government is required to strike a balance between the interests of the domestic producers and importers. Whenever it is observed that large scale imports of an item is adversely impacting the interests of the domestic producers due to slide in prices in the local market, the Government in consultation with all the stakeholders tries to protect the interests of the domestic producers by placing restrictions, which could be either import restrictions or Imposition of http://www.judis.nic.in 22 Minimum Import Price and quota restrictions.
6.2. As the high agricultural production in the country resulting in the prices of the pulses sliding below the minimum support price and also owing to increase in area under crop production leading to further fall of price, the Central Government thought it fit to impose quota restrictions on import of certain pulses. The quota restrictions on import of Pigeon Peas and other pulses were imposed taking into account the huge domestic production resulting in price falling below the minimum support price. The policy decision is, thus, taken subject to the prevailing conditions as mentioned above.
6.3. As the Government found that for the current fiscal year, the situation would be identical, as mentioned above, the quota was placed on import of pulses. While modifying the import policy of Peas by notification, the condition is already spelt out. The powers of the Central Government to issue such notification are found in Section 3 of the FTDR Act read with para 1.02 of FTP 2015-2020 as amended from time to time. The Central Government through Ministry of Commerce and Industry, Department of Commerce, DGFT amended the import policy of items of Chapter 7 of ITC (HS) 2017 conditionally. http://www.judis.nic.in 23
7. The learned counsel Mr.Hari Radhakrishnan appearing for some of the petitioners (in W.P.Nos.16934, 16935, 27710, 28721, 28724 and 30493 of 2018) referred to the Foreign Trade Policy Para 1.02 of Chapter 1A. The said provision reads as follows :
"1.02 Amendment to FTP.
“Central Government, in exercise of powers conferred by Section 5 of FTDR Act, as amended from time to time, reserves the right to make any amendment to the FTP by means of notification in public interest”."
7.1. Further, Chapter 2 speaks about general provisions regarding imports and exports. It is alleged that while issuing the said notifications and trade notices, the principles of restrictions enumerated under clause 2.07 of FTP 2015-2020 have to be borne in mind. The said clause reads thus :
"2.07 Principles of Restrictions DGFT may, through a Notification, impose restrictions on export and import, necessary for: -
(a) Protection of public morals;
(b) Protection of human, animal or plant life or health;
(c) Protection of patents, trademarks and copyrights, and the prevention of deceptive practices;
(d) Prevention of use of prison labour;
(e) Protection of national treasures of artistic, historic or archaeological value;
http://www.judis.nic.in 24
(f) Conservation of exhaustible natural resources;
(g) Protection of trade of fissionable material or material from which they are derived;
(h) Prevention of traffic in arms, ammunition and implements of war
(i) Relating to the importation or exportation of gold or silver."
7.2. It is submitted that in view of the failure of the respondents to follow clause 2.07 of FTP 2015-2020, the same are liable to be interfered.
7.3. Clause 1.00 of the FTP 2015-2020 provides for the legal basis of the FTP and it is traceable to Section 5 of the FTDR Act. Clause 1.01 sets out duration of the FTP, while Clause 1.02 provides for amendment to FTP. Clause 1.05 of chapter 1A of the Foreign Trade Policy also speaks about transitional arrangements. A perusal of clause 1.05 would show how clause (a) provides for continuation of a licence/ authorisation/Certificate/scrip/instrument, etc., bestowing financial or fiscal benefits issued before the commencement of FTP. Clause (b) says that even in cases where an export or import is permitted freely under FTP, is subsequently subjected to any restriction or regulation, such import or export will ordinarily be permitted notwithstanding such restriction or regulation unless otherwise stipulated. This is subject to http://www.judis.nic.in 25 the condition that the shipment of export or import is made within the original validity period of an Irrevocable Commercial Letter of Credit, established before the date of imposition of such restriction and it shall be restricted to the balance value and quantity available and time period of such Irrevocable Commercial Letter of Credit.
7.4. From the above provisions of the FTP, it is clear that the condition, which is stipulating certain measures subsequently and even such restriction placed on the imports are otherwise stated to be free.
7.5. The expression “unless otherwise stipulated” appearing in clause (b) of para 1.05 makes it abundantly clear that it is not because there is a blanket provision made in para 1.05 that the restriction or regulation notwithstanding the export or import will ordinarily be permitted. If otherwise there is a stipulation, then these above words will not be of any assistance. Therefore, so far as the impugned Notifications are concerned, it is evident that they are issued in exercise of the powers conferred by section 3. The FTP, as amended from time to time, always contains stipulations with regard to the import.
8. This is not the case where we should allow any principle of law to be canvassed to the effect that the notifications issued under the http://www.judis.nic.in 26 exercise of statutory powers have to be amended in a like manner and not by a circular or any trade notice. However, the petitioners contended that an executive action cannot modify the statutory prescription. The counsels for the petitioners relied on the interim order passed at the time of admission whereby, the impugned notifications were stayed, though they were ex parte orders.
9. Section 19 (3) of the FTDR Act provides for laying every rule and every order made by Central Government under the Act before each house of parliament, which has not been complied with by the respondents. However, Section 3 confers the power of Central Government to make orders and announce the Foreign Trade Policy. Any order made by the President, in exercise of powers conferred under clause (2) of Article 77 of the Constitution of India, whereby powers of authentication of orders and other instruments have been vested in the DGFT.
10. In Notification No.4/2015-2020 the policy condition No.4 specifically states that the import is restricted for a period from 1 st April to 30th June 2018, to the total quantity of one lakh MT of yellow http://www.judis.nic.in 27 peas minus the quantity already imported from 01.04.2018. Thus, the stipulation of policy condition No.4 restricted the import for the period from 1st April to 30th June, 2018 to the total quantity of one lakh MT is as per Section 3 notified by the DGFT. So, there cannot be any import exceeding this quantity within the period stipulated. This will also include the shipment already arrived and this understanding was not in dispute or confusion. In so far as the shipments, which were backed by Irrevocable Commercial Letter of Credit and advance payment made through Banking channel before 25th April 2018 also cannot have any ambiguity, as the policy condition No.4 indicates that if the shipment is secured and backed up by advance payment made through Banking channel then that would be understood as complying with the policy condition No. 4, i.e., the quantity already imported from 01.04.2018 to 25.04.2018. However, whether the advance payment mentioned in the policy condition No.4 is part advance or full advance payment have to be clarified only by the DGFT.
11. In other words, if the contracted quantity in terms of the contract between the local importer and the person abroad, is specified and if the entire amount has been secured in terms of this Irrevocable Commercial Letter of Credit or full advance payment irrespective of http://www.judis.nic.in 28 whether the delivery of the goods will be made in part or not will be covered by the words ‘already imported’. Therefore, it can be understood that if there is an Irrevocable Commercial Letter of Credit, the shipment backed by such Irrevocable Commercial Letter of Credit and if they are already imported between the said notified date, they will be registered as per para 1.05 of FTP 2015-2020. With respect to advance payments made to the extent of hundred percent, they will also be qualified to register with the regional authorities of the DGFT. Thus, the transitional arrangement is already clarified by the trade notices, which are not in contravention to the substantive provisions of the notifications or Section 3 of the FTDR Act.
12. In the light of the above discussions, this Court is of the opinion that the restrictions imposed by the Government of India are justified, which are brought out by the Government of India through the DGFT for the benefit of the farmers, who are cultivators of indigenous peas, as the import of Peas flooding the market reduce the demand for locally grown peas. Hence, the peas growers in India are unable get the right price resulting in loss to small farmers. In such a view of the matter, the restriction imposed can never be said to be in violation of Article 19(6) of the Constitution. http://www.judis.nic.in 29
13. Accordingly, these writ petitions fail and the same are dismissed. No costs. Consequently, connected miscellaneous petitions are closed.
04.04.2019
Speaking / Non-speaking Order
Index : Yes/No
Internet : Yes
gg
To
1. The Director General of Foreign Trade,
Ministry of Commerce & Industries,
Department of Commerce,
Udyog Bhavan H Wing, Gate No.2,
Maulana Azad Road, New Delhi.
2. The Joint Director General of Foreign Trade, Ministry of Commerce & Industries, Department of Commerce, Udyog Bhavan H Wing Gate No.2, Maulana Azad Road, New Delhi.
3. The Additional Director General of Foreign Trade 4th and 5th Floor, Shastri Bhavan Annex Building 26, Haddows Road, Chennai-06.
4. The Commissioner of Customs, Chennai II Commissionerate, Custom House, 60, Rajaji Salai, Chennai-01.
http://www.judis.nic.in 30 PUSHPA SATHYANARAYANA, J.
gg W.P.No.15921 of 2018, etc. batch 04.04.2019 http://www.judis.nic.in