Madras High Court
M/S.Vaas Exports vs Director General Of Foreign Trade on 17 July, 2008
Author: P.Jyothimani
Bench: P.Jyothimani
BEFORE THE MADURAI BENCH OF THE MADRAS HIGH COURT DATED: 17/07/2008 CORAM THE HONOURABLE MR.JUSTICE P.JYOTHIMANI W.P.(MD)Nos.6004 to 6006 of 2008 and M.P.(MD)Nos.1,1 and 1 of 2008 M/s.Vaas Exports Through its partner ... Petitioner in Mr.T.P.S.Ponkumaran all WPs. 289-B, Sivanthakulam Road, Tuticorin - 628003. Vs. 1.Director General of Foreign Trade Office of Director General of Foreign Trade Udyog Bhavan, New Delhi - 110 001. 2.The Joint Director General of Foreign Trade Office of the Joint Director General of Foreign Trade Plot No.117, K.K.Nagar, 1st Main Road, Madurai - 625 020. 3.The Commissioner of Customs Customs House, Harbour Estate, Tuticorin - 628 004. ... Respondents in all WPs PRAYER IN ALL WPs Writ Petitions filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Mandamus, directing the respondents (i) to frame and announce such interim measures or exceptional provisions to facilitate the petitioner to fulfill the export orders that are committed prior to any change or amendment in the Foreign Trade Policy published by the 1st respondent, by any Notification or other means like the Notification dated 03.07.2008 prohibiting export of maize (ii) to consider and allow the export of that quantity of maize for which shipping bills are filed with customs prior to the change in the Foreign Trade Policy through the Notification dated 03.07.2008, or for which quantity export applications are filed with Tuticorin Port prior to the change in the Foreign Trade Policy through the Notification dated 03.07.2008 or for that quantity of maize for which vessels are declared with customs prior to the change in the Foreign Trade Policy through the Notification dated 03.07.2008. !For Petitioner ... Mr.N.Dilip Kumar ^For Respondents... Mr.C.Arul Vadivel alias Sekar Asst. Solicitor General of India :COMMON ORDER
Heard Mr.N.Dilip Kumar, learned counsel appearing for the petitioner and Mr.C.Arul Vadivel @ Sekar, learned Assistant Solicitor General of India appearing for the respondents.
2.These writ petitions are filed by the same party, and the buyers under the contract of export are different and hence the common order is passed.
3.The petitioner's partnership firm has been carrying on business of export of commodities like Salt and Maize since 1993. The first respondent by virtue of the Foreign Trade Policy of the Government of India, has announced certain conditions as to export of Maize and in these years. As per the said policy, which has been consistently followed by the Government, the export of Maize has been freely allowed without any restrictions. It was because of the erstwhile policy of the Government, the farmers have increased their cultivation in respect of Maize in States like Tamil Nadu, Karnataka and Andhra Pradesh. According to the petitioner, Maize is not a staple food for the people and it is used as a poultry feed. It is based on the said Policy, the petitioner's firm stated to have entered into the contract with foreign buyers M/s.Hapiways Management Services Pvt. Ltd., Singapore, on 09.05.2008, for shipment of 4000 MT of Indian Yellow Maize to Colomobo during June-2008 to July 2008. Pursuant to the contract entered by the petitioner with the foreign buyers, the petitioner has procured Maize and signed with the Shipping Company M/s.Marine Export and Trading Company, on 26.06.2008 fixing a vessel, mv.Medhu Faru, to carry the quantity of 1700 MT to Colombo between 1st July to 8th July 2008. A similar arrangement was entered with an another Shipping Company M/s. EBC Marine Pvt. Ltd., on 30.06.2008, fixing a vessel called mv.Bagawan, to carry a quantity of 2100 MT to Colombo between 3rd to 5th July 2008. Therefore, the contract was entered with the said two shipping Companies for the purpose of export of 3800 MT of Maize.
4.The case of the petitioner is that the petitioner has submitted their shipping bills to Customs Authority at Tuticorin based on the then existing Foreign Trade Policy. According to the petitioner, the shipping companies have filed intimation of arrival of vessels to Customs at Tuticorin on 28.06.2008 and 01.07.2008. Furtherance to the process of export, the "Export Applications" were filed to the Port Authorities also. While so, the first respondent has issued a Notification on 03.07.2008, prohibiting export of Maize with immediate effect. Aggrieved by the said Notification dated 03.07.2008, the petitioner and many other exporters have made representations to the Government, and according to the petitioner, there was no reply.
5.In the meantime, the first respondent has allowed export of Maize from Kakinada, Jam Nagar and Kandla Ports on 05.07.2008 in respect of some exporters and according to the petitioner, those permissions were granted inspite of the fact that there was no loading or part-loading or waiting for loading which were either covered under "Let Export Order" (LEO) or Shipping Bills etc., Therefore, according to the petitioner, the conduct of the first respondent in allowing export of Maize in the said three Ports viz., Kakinada, Jam Nagar and Kandla and on granting such permission to them are discriminatory. The petitioner, being exporter, is equivalent to that of those exporters, who have been permitted to export of Maize from Kakinada, Jam Nagar and Kandla Ports.
6.In these circumstances, according to the petitioner, the change in the Policy of the Government in putting an embargo on the export of Maize affects the right under Article 19(1)(g) of the Constitution of India, since it is not reasonable restriction imposed on the right to carry on trade. That apart, it is the case of the petitioner that the conduct of the respondents in choosing few of the exporters, who are similarly situated as that of the petitioner and permitting them to export is discriminatory and therefore, it violates Articles 14 and 21 of the Constitution of India.
7.The first and second respondents have filed counter affidavit. A preliminary objection is raised about the maintainability of the writ petitions. According to the said respondents, what is challenged in these proceedings is the Policy of the Government, which cannot be questioned in a Court of Law.
8.The case of the first and second respondents is that the Government while framing a Policy or changing the Policy is presumed to have taken into consideration the public interest at large and that cannot be within the domain of judicial review. According to the first and second respondents, Foreign Trade is incidental to the objective to see that the food grains are available to the people, while denying that the Maize is not a staple food. It is also the case of the first and second respondents that in respect of applicability of Policy, there is no legitimate expectation in commercial field. The first and second respondents would also rely upon the various judgments of the Apex Court to state that the Foreign Trade Policy is the Government's domain, which cannot be questioned. It is also the case of the first and second respondents, that withdrawal of concessions, namely, transitional arrangements given in the Foreign Trade Policy 2004-09 in para 1.5 is incidental and the first and second respondents, while deciding or changing the Policy have the right to withdraw such concessions. It is also the case of the first and second respondents that the permission given to three exporters in the Kakinada, Jam Nagar and Kandla Ports are not similarly situated as that of the petitioner. According to the first and second respondents, they are the cases, where either "Let Export Order" has been issued or in respect of part of goods, "Let Export Order" has been issued and the remaining part of the goods were awaiting orders from the customs Department. Whereas, in the case of the petitioner, it is the preliminary stage wherein the documents alone have been submitted to the Customs Department and no further steps have been taken. According to the first and second respondents, there is no accrued right which has been conferred on the petitioner and such accrued right concept is not applicable in the case of Policy making process of Governance. The granting of license or permission for import or export is an Executive or Legislative Policy and while making such Policies, the Government gives greater priorities to various items in the over all larger interest of the economy of the country. In the counter affidavit, the first and second respondents have also relied upon various judgments of the Hon'ble Supreme Court to show that the legitimate expectation policy is not applicable in matters of Policy making.
9.The third respondent, the Commissioner of Customs, Tuticorin, has filed counter affidavit. It is stated in the counter affidavit that the first respondent is the proper authority to give reasons for the purpose of issuing Policy Notification, and therefore, the Policy Notification has been issued by the first respondent dated 03.07.2008 which is perfectly in order and the third respondent, being the implementing authority, has to follow only the Notification issued on 03.07.2008. It is also stated by the third respondent that the petitioner has not presented the cargo for Customs Examinations before 06.07.2008 except one S/B.No.1946277 dated 21.06.2008, in which shipment of 6445.66 Kgs of Maize was allowed for export on 25.06.2008. It is also stated by the third respondent that the petitioner, by a letter dated 04.07.2008 addressed to the third respondent, has requested to grant permission to move the export of cargo stuffed in 10x20 feet containers in respect of S/Bill No.1946193 dated 21.06.2008 and 1946194 dated 21.06.2008 from 'Raja Container Freight Station (CFS)', Tuticorin to Port after the truckers strike was withdrawn. In order to consider the request of the petitioner, a report was called for from the Customs Officer in charge of 'Raja Container Freight Station', who in turn reported that the said two S/Bills were not registered in the Customs at all and the cargo was not at all examined and the export cargo not falling under the custody of the Customs Authority prior to the prohibition of export of Maize. Therefore, according to the third respondent, on the factual situation, the petitioner's case is distinctive, since no initial steps have been taken on the part of the petitioner and therefore, the petitioner cannot claim equality as per Notification issued in respect of the other three exporters, as stated above viz., Kakinada, Jam Nagar and Kandla Ports.
10.Mr.N.Dilip Kumar, learned counsel appearing for the petitioner would fairly submit that the petitioner is not covered under Policy 9.12 of the Foreign Trade Policy and Handbook of Procedures (Foreign Trade Procedures Part-
2). The said Policy of 9.12 deals with the date of shipment and despatch in respect of exports. As far as the petitioner's case is concerned, the shipping bills have been produced before the Customs Authority and the next steps is to get "Let Export Order" but that will be possible only after getting wharf. According to him, when once the shipping bills are handed over to the Customs Department, the process of export has commenced and therefore, in all fairness, the first respondent should have permitted the petitioner also to complete the export like the other three exporters, stated above. Even though he would fairly submit that in respect of questioning the policy, the power of judicial review is restricted, there are cases, wherein the Courts are empowered to interfere in the policy when the said policies are irrational and opposed to the basic norms or affecting fundamental rights. According to the learned counsel, the very conduct of the respondents in discriminating the petitioner with that of the other exporters is to be treated as grossly illegal, and therefore, the Court should interfere on the basis that the policy is unwarranted. It is his further contention that even in respect of the other three exporters in whose favour, export has been permitted by the Notification dated 05.07.2008, it is seen that in respect of few of the quantity of materials, the "Let Export Order"
has not been issued and in spite of it they were permitted. On the other hand, in the case of petitioner, even though the "Let Export Order" was not issued in respect of any of the quantities submitted by the petitioner, the petitioner should be treated equivalent to that of the other exporters, and therefore, according to him, the conduct of the first respondent in denying the same right which has been given to the other exporters on 05.07.2008 is arbitrary and discriminatory in nature and violative of Article 14 of the Constitution of India. He would also submit that by applying the paragraph 9.12 of the said Policy, the other three exporters, as stated above, ought not have been allowed. The contention of the learned counsel is that, all the shipping bills were presented to the customs authority prior to the Notification of the Government.
11.On the other hand, Mr.C.Arul Vadivel @ Sekar, learned Assistant Solicitor General of India, would submit that, as stated by the Customs Department, on fact the petitioner has not complied with the requirements for completion of process of export. The factual aspect which is explained by the third respondent in the counter affidavit is highlighted by the learned Assistant Solicitor General, stating that on enquiry it was found that the shipping bills were not even registered with the Customs Department and cargo was never examined by the Customs Department at all and the export cargo cannot be falling under the custody of the Customs Authority prior to prohibition of export of Maize. Therefore, according to the learned Assistant Solicitor General, it is only in respect of cases where the goods have passed on to the level of custody of the Customs Authority prior to the imposition of prohibition, the benefits have been given as per the Notification dated 05.07.2008. He would also refer to the representation of the petitioner dated 04.07.2008, which has been properly answered on the basis that the petitioner has not taken any initial step for the purpose of proceeding with the export procedure. He would also reiterate by referring to the various judgments of the Apex Court to contend that in respect of the Policy matters, the power of Judicial Review of the Courts are limited and the Courts must be slow in interfering with the Policy matters because it is the Government which is obliged to maintain the over all economic situation of the country. He would also refer to various judgments of the Apex Court in support of his contentions viz., (i) U.P.Power Corporation Ltd., & another Vs. Sant Steels & Alloy (P) Ltd., reported in (2008 (2) SCC 777), (ii) Reliance Energy Ltd., and Another Vs. Maharastra State Road Development Corpn., Ltd., reported in (2007 (8) SCC
1), (iii) Union of India and Others Vs. Asian Food Industries reported in (2006 (13) SCC 542) and (iv) Ashoka Smokeless Coal India (P) Ltd., and Others Vs. Union of India and Others reported in (2007 (2) SCC 640).
12.I have heard Mr.N.Dilip Kumar, the learned counsel appearing for the petitioner and Mr.C.Arul Vadivel @ Sekar, learned Assistant Solicitor General of India, appearing for the respondents and perused the entire records after giving my anxious thought to the issue involved in these cases.
13.On the basis of the pleadings available on record, it is clear that the petitioner has not challenged the order of the first respondent dated 05.07.2008 by which, by considering the representation of some of the exporters the first respondent has granted permission to export in respect of vessels in Kakinada, Jam Nagar and Kandla Ports, wherein there has been either "Let Export Order" issued by the Customs Department or cases where in respect of the larger quantity of materials, part of which have been covered with "Let Export Order"
and the remaining part were awaiting for issuance of such order and was in the shipping bills stage.
14. The main thrust as made by the learned counsel appearing for the petitioner basing reliance on the Notification of the first respondent dated 05.07.2008 to substantiate his contention regarding the discrimination made against the petitioner bound to fail on the sole reason that this Court is not called upon in these writ petitions to decide about the validity or otherwise of exemptions/benefits granted in respect of some of the exporters as a matter of Policy on 05.07.2008. In such circumstances, I am of the considered view that it is not for this Court to hold that the Notification dated 05.07.2008 showing exemption or lenience to some of the exporters are bad in law. However, as the basic foundation of the case of the petitioner appears to be on the ground of discrimination and violative of Article 14 of the Constitution of India, I deem it fit to consider the said contention also.
15.On fact as it is stated in the counter affidavit by the third respondent Customs Department, there is no difficulty to come to the conclusion that as far as the procedure followed by the petitioner for export of Maize, the same is in the initial stage and steps have not been taken even for the purpose of presenting the cargo to the Customs to examine and therefore, the same was not within the custody of the Customs authority. While considering the said procedure, it is relevant to narrate the various steps to be followed for the purpose of completing the export process before going in to the Policy in cases of export. The first step to be taken is that the exporter has to present the shipping bills to the Customs Department and thereafter, it reaches the next stage of wharf during which, the Department consider the bills and then decide whether to give an order permitting the exporter to export the particular commodity. It is in the third stage, when the authority is satisfied that the exporter is entitled to export, the "Let Export Order" is issued. Once it is issued, it imposes certain obligations on the part of the respondents to permit the goods to effect shipment and the last stage, being the shipment of cargo, whereby the procedures comes to an end.
16.On the factual situation as I have narrated above, in respect of the steps taken by the petitioner for export of Maize, it is in the first stage of shipment bills having been submitted before the Customs Authority and no further steps have been taken and it is not in dispute that in respect of the petitioner, the Customs Authority, who are competent have not issued the "Let Export Order".
17. As far as the other three exporters in whose benefit permission has been granted to export Maize namely, the same commodity, the Notification of the Government dated 05.07.2008 which reads as follows:-
"Subject: Notification 22 dated 3rd July 2008 regarding ban on export of maize.
Maize exporters have represented that consequent to issue of Notification 22 dated 3.7.2008 banning export of maize, maize export shipments are not being allowed by Customs even in cases which are covered by Foreign Trade Policy / Procedures in force.
2. In this regard, following have been reported:
(a) Following 8 Vessels, i.e., 7 vessels at Kakinada Port and I vessel at Jam Nagar Port, part loading has been completed with "Let Export Order' and the balance loading quantity is covered either under 'Let Export Order' or for which shipping bills have been filed.
Port/Ship Name Quantity Loaded (MT) Balance to load (MT)
1. Kakinada / Lion Trader 13500 2500
2. Kakinada / Van Lee 16100 8000
3. Kakinada / Vinasin Sun 8500 3700
4. Kakinada / Huang Yun 4600 2200
5. Kakinada / Pacific Bangan 3700 16500
6. Kakinada / Cailan 2 1400 4700
7. Kakinada / Fu Shen 1100 6500
8. Jamnagar / Thor Jupiter 6410 15600
(b) Also, it is reported that following 6 vessels at Kandla Port, where `Let Export Order (LEO)' has been passed by Customs for significant quantity but the loading is still to commence.
Port/Ship Name Quantity Loaded (MT) Balance to load (MT)
1.Kandla / Tai Shun 0 11000 Kandla / Noor e Mustaffa 0 15000 (both vessels substituted by M.V. Fuyang for 22000 MT - Vessel already in Port waiting for berth) (with LEO for 22000 MT)
2.Kandla / Halina 0 24000 (with LEO for 12000 MT)
3.Kandla / Ivan Makran 0 22000*
4.Kandla / Aqva Star 0 6500*
5.Kandla / Sea Trader 0 17000*
6.Kandla / Shebelle 0 25000* * with LEO for full quantity
3. It has been decided that above mentioned vessels may be allowed for export of maize subject to Irrevocable Commercial Letter of Credit (LC) supporting these shipments, of a date upto 3.7.2008.
4. This issues with the approval of Director General of Foreign Trade.
Sd/-
(Anil Aggarwal) Jt. Director General of Foreign Trade"
18.In the said order dated 05.07.2008, the first respondent, as a matter of Policy, permitted the said exporters to complete the export due to the reason that in respect of the commodities, which are the subject matter of the export, either "Let Export Order" has been issued by the Customs Authority or in respect of the larger quantity of materials, for a part of it "Let Export" Order has been issued and for the remaining part awaiting orders from the Customs Department, since the shipping bills are pending with the Customs Department. In respect of the permission granted to the exporter from Kandla Port, it is seen that the "Let Export Order" has been issued by the Customs for significant quantity, however, the loading is yet to start. It is on the above said three reasons, the Government as a matter of Policy, has granted permission to export in respect of the said traders. In such circumstances, the contention of the learned counsel for the petitioner that at least in respect of the Kandla Port, it is admitted as per the Notification, dated 05.07.2008 that even though the "Let Export Order" has been issued, there was no shipment or loading and which has to be comparable to that of the petitioner wherein there is no loading as on date and only the shipping bills are pending with the Customs Department. Therefore, according to the learned counsel, in all fairness, the petitioner should have been treated along with the other exporters who have permitted to export from Kandla Port. I do not accept the said contention. The concept of equality is not a blind and meaningless concept as it has been established by the Supreme Court repeatedly, that equality as enshrined under Article 14 of the Constitution of India is among the equally situated people.
19.The question now is as to whether the petitioner can be treated equal with that of the three other exporters who have been permitted by the first respondent to export Maize?. Except that the commodity Maize is same in all the cases and petitioner and the said three traders are exporters, I do not see any equality among them. As I have narrated above, the Notification of the Government dated 05.07.2008 is self-explanatory, which makes it clear and distinguishable to that of the petitioner's case. The petitioner cannot say that he is an exporter and the other three exporters who have been given permission were also exporters and therefore, all of them should be treated equal. The equality concept which is applicable as far as policy making in this case depends upon the factual situation which can be comparable to "taxable event" in taxing law. In the present case, it is only when the goods pass on to the Customs Authority under its custody, the question of completion of the export will arise and in cases where the permission has been granted in respect of the three other exporters, they are distinct and they have crossed the first stage and in some cases the second stage has also been crossed where "Let Export Order" has been issued and the goods are awaiting for shipment. In view of the same, the contention of the learned counsel for the petitioner that there is a violation of Article 14 of the Constitution of India, is not sustainable and notification of the first respondent dated 05.07.2008 granting permission to export in respect of three traders cannot be held to be invalid.
20.Now, coming to the Policy of the Government, the Import and Export Policy of the Government is made as per statutory compulsion under the Foreign Trade (Development and Regulation) Act, 1992. Under the above said Parliamentary law, Section 3 provides power to the Central Government to make various orders and announce Export and Import Policy. Section 3 (2) of the Foreign Trade (Development and Regulation) Act, 1992 is as follows:
"(2) The Central Government may also, by Order published in the Official Gazette, make 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".
21.It is by virtue of the power conferred under Section 3 of the Said Act (No.22 of 1992), the Government has framed the Foreign Trade Policy for the year 2004-09. Inasmuch as the Policy making power has been given to the Government which also empowers the Government to make change in the Policy, there is no difficulty to come to the conclusion that the present Policy of the Government in prohibiting export of Maize is a change in the Policy and therefore it is within the jurisdiction of the first respondent. It is also seen that based on the Policy made by the first respondent, the first respondent issued various procedural notifications for the purpose of implementing the policy. Therefore, in respect of the Export and Import Policy, it is seen that there are three stages, viz., (i) The statutory power given under the Act to the Government to frame policy. (ii) Framing of Policy based on Section 3 of the said Act. (iii) Based on the Policy, the first respondent issues various notifications imposing procedures to be followed in implementing the Policy.
22.In framing Policy in respect of Foreign Trade, Chapter 1(A) of the Foreign Trade Policy of 2004-2009, especially, in Clause 1.5 is as follows:-
"In case an export or import that is permitted freely under FTP is subsequently subjected to any restriction or regulation, such export or import will ordinarily be permitted notwithstanding such restriction or regulation, unless otherwise stipulated, provided that shipment of export or import is made within original validity with respect to available balance and time period of an irrevocable commercial letter of credit, established before date of imposition of such restriction. However, a time limit for operationalising such LCs may be prescribed".
23.According to the said clause, certain transitional arrangements have been made protecting transaction of import and export may based on irrevocable commercial letters of credit established before the date of imposition of any restrictions. Therefore, as per the said Policy, it enables the Government to permit export, in spite of imposing restrictions, in cases where certain transactions have crossed a limit of a period of an irrevocable commercial letter of credit. The Policy is not a matter of right for a trader, since the Policy is subject to change. Therefore, while issuing the Notification by the Central Government on 03.07.2008, by which, the Government by exercising its power under Section 5 r/w Section 3 (2) of the Foreign Trade (Development & Regulation) Act, 1992 (No.22 of 1992) and also based on para 1.3 and 2.1 of Foreign Trade Policy of 2004-2009, has issued an amendment to be effected immediately in respect of entry No.46B in Table B under Schedule 2 of ITC (HS) Classifications of Export and Import Items, 2004-09 by prohibiting export of Maize(Corn). While issuing such notification of imposing of ban on export of Maize dated 03.07.2008, the Government has also taken away the applicability of transitional arrangement conferred in Para 1.5 of Foreign Trade Policy 2004-09. The said Notification dated 03.07.2008 is as follows:-
"S.O.(E) In exercise of the powers conferred by Section 5 read with Section 3(2) of the Foreign Trade (Development & Regulation) Act, 1992 (No.22 of 1992) and also read with Para 1.3 and Para 2.1 of the Foreign Trade Policy, 2004-09, the Central Government hereby makes the following amendments in the ITC (HS) Classifications of Export and Import items, 2004-09, as amended from time to time:
2.With immediate effect, the entry at 46B in Table B under Schedule 2 of ITC (HS) Classifications of Export and Import Items, 2004-09, stands substituted as under:
Sl. Tariff Item Unit Item Export Nature of No. HS Code No. Description Policy Restriction 46B 1005 Kg. Maize (corn) Prohibited Export shall 1005 10 00 Seed not be permitted 1005 90 00 Kg. Other Prohibited Export shall not be permitted
2.The above prohibition / restriction shall remain in force till 15th October, 2008.
3.The transitional arrangements under Para 1.5 of the Foreign Trade Policy, 2004-09, as amended from time to time, shall not be applicable for export of the aforesaid items.
4.This issue is in public interest".
24.Apart from the fact that the said Notification dated 03.07.2008 imposing a ban on export of Maize is not in question in these writ petitions and therefore the validity or otherwise of such Notification need not be gone into these writ petitions, admittedly it is as per the Policy of the Government as permitted under the provisions of Foreign Trade (Development and Regulation) Act, 1992 and taking into consideration that the said restriction has been imposed on the basis of public interest. There is no difficulty in come to the conclusion that the said Notification is a Policy Notification of the Government.
25.While so, the contention of the learned counsel for the petitioner that the said Policy Notification should be taken as arbitrary, causing gross injustice to "Maize" exporters and ultimately to the maize growers is absolutely baseless. The further contention that permission granted to the three exporters on 05.07.2008 is against para 9.12 is also unsustainable. It relates to the procedures to be followed for the purpose of "date of shipment and despatch" in respect of exports. The repeated insistence by the learned counsel for the petitioner in respect of the term in Para 9.12 of the Handbook of Procedures that in cases where the procedures or Policy has been modified to the disadvantage of an exporter, the same shall not be applicable to the consignment already handed over to Customs for examination and subsequent export upto public Notification/Notification date, is also baseless. The said Para of 9.12 reads as follows:-
"
Mode of Transportation Date of Shipment / Dispatch
(i) By Sea For bulk cargo, date of Bill of Lading or date of mate receipt, whichever is later.
(a) For containerised cargo, date of "Onboard Bill of Lading", or "Received for Shipment Bill of Lading ", where the L/C provides for such Bill of Lading. For exports by containers from Inland Container Depot (ICD), date of Bill of Lading issued by shipping agents at the time of loading of export goods in ICD after customs clearance.
(b) For Lash barges, date of Bill of Lading evidencing loading of export goods on board.
(ii) By Air Date mentioned by appropriate Officer of Customs on Shipping Bill, evidencing loading or handing over of goods to air cargo complex, which are not international airports, or by way of rotation of flight number and date.
(iii) By Post Parcel Date stamped on postal receipt
(iv) By Rail Date of RR (Railway Receipt)
(v) By Registered Date affixed on Courier Receipt / Waybill Courier Service
(vi) By Road Date on which goods crossed Indian border as certified by Land Customs Authorities However, wherever Procedural / Policy provisions have been modified to disadvantage of exporters, same shall not be applicable to consignments already handed over to Customs for examination and subsequent exports upto Public Notice / Notification date.
Similarly, in such cases where goods are handed over to the customs authorities before expiry of export obligation period but actual Exports take place after expiry of the export obligation period, such exports shall be considered within export obligation period and taken towards fulfillment of export obligation".
26. A reading of the said clause in the Handbook of Procedure makes it clear that permission granted in respect of three exporters dated 05.07.2008 cannot be held to be against the said para 9.12.
27. The said stand is fallacious for various reasons namely, as far as the petitioner's goods are concerned, they have not gone to the hands of the Customs for examination, which is also admitted by the learned counsel for the petitioner. But, as far as the other three exporters, who have been granted permission on 05.07.2008, is concerned, his contention is that, at least a part of the quantity have not been handed over to the Customs for examination, in respect of which shipping bills are pending with the Customs and therefore in respect of that part, when the other exporters were given permission, the same should have been given to the petitioner also. As I have elicited above, there is no equality between the petitioner and the other three exporters to whom permission has been granted.
28.The admitted case of the petitioner is that, in respect of no quantity of materials of Maize belonging to the petitioner, the goods have gone to the Customs for examination and it is at the stage of shipping bill under the consideration of the Customs Department. Whereas, in cases where exemption was granted i.e., in respect of three exporters, regarding some of them, "Let Export Order" has been issued for the whole quantity and regarding some of the items, only for a part of the quantity. "Let Export Order" is issued and for the remaining part, shipping bill is pending. When the entire quantity forms part of one consignment, out of which, "Let Export Order" had been issued for a part of the quantity and the remaining part is pending with the Customs Department for clearance, it cannot be equated with that of the petitioner's case, since, the entire commodity is only at the shipping bill stage i.e., the preliminary stage in the process of export. On the factual situation, I do not see any discrimination between the petitioner and the other three exporters and any illegality in granting permission, by applying Para 9.12 of the Handbook of Procedures.
29.In P.T.R. Export (Madras) Pvt. Ltd., Vs. Union of India, reported in (1996 (86) ELT 2 (SC)), the Apex Court had an occasion to consider about the scope of judicial review against the Policy Making Powers of the Government and also applicability of the principle of estoppel. The Supreme Court, while analysing various case laws on the issue, has in no uncertain terms held that even though in certain cases Government is bound by the doctrine of promissory of estoppel, the question of applicability of the doctrine of legitimate expectation in respect of Policy matters has been clearly held to be out of the purview of judicial review. In fact, the Supreme Court has held that the Courts should leave the authority to decide its full range of choice of course, within its executive and legislative power. It has also held that in the matter of economic policy, the Court gives large leeway to the executive and the legislature and granting license for import or export is a matter of executive and legislative policy and the power of the Court to interfere is very limited and there is no question of applicability of legitimate expectation in respect of public policy. The relevant portions of the judgment reported in (1996 (86) ELT 2 (SC)) cited supra reads as follows:-
"3.In the light of the above policy question emerges whether the Government is bound by the previous policy or whether it can revise its policy in view of the changed potential foreign markets and the need for earning foreign exchange? It is true that in a given set of facts, the Government may in the appropriate case be bound by the doctrine of promissory estoppel evolved in Union of India v. Indo-Afghan Agencies (1968) 2 SCR 366. But the question revolves upon the validity of the withdrawal of the previous policy and introduction of the new policy. The doctrine of legitimate expectations again requires to be angulated thus: whether it was revised by a policy in the public interest or the decision is based upon any abuse of the power? The power to lay policy by executive decision or by legislation includes power to withdraw the same unless in the former case, it is by mala fide exercise of power or the decision or action taken is in abuse of power. The doctrine of legitimate expectations plays no role when the appropriate authority is empowered to take a decision by an executive policy or under law. The court leaves the authority to decide its full range of choice within the executive or legislative power. In matters of economic policy, it is settled law that the Court gives the large leeway to the executive and the legislature. Granting licences for import or export is by executive or legislative policy. Government would take diverse factors for formulating the policy for import or export of the goods granting relatively greater priorities to various items in the overall larger interest of the economy of the country. It is, therefore, by exercise of the power given to the executive or as the case may be, the legislature is at liberty to evolve such policies.
4. An applicant has no vested right to have export or import licences in terms of the policies in force at the date of his making application. For obvious reasons, granting of licences depends upon the policy prevailing on the date of the grant of the licence or permit. The authority concerned may be in a better position to have the overall picture of diverse factors to grant permit or refuse to grant permission to import or export goods. The decision, therefore, would be taken from diverse economic perspectives which the executive is in a better informed position unless, as we have stated earlier, the refusal is mala fide or is an abuse of the power in which event it is for the applicant to plead and prove to the satisfaction of the Court that the refusal was vitiated by the above factors.
5. It would, therefore, be clear that grant of licence depends upon the policy prevailing as on the date of the grant of licence. The Court, therefore, would not bind the Government with a policy which was existing on the date of application as per previous policy. A prior decision would not bind the Government for all times to come. When the Government are satisfied that change in the policy was necessary in the public interest, it would be entitled to revise the policy and lay down new policy. The Court, therefore, would prefer to allow free play to the Government to evolve fiscal policy in the public interest and to act upon the same. Equally, the Government is left free to determine priorities in the matters of allocations or allotments or utilisation of its finances in the public interest. It is equally entitled, therefore, to issue or withdraw or modify the export or import policy in accordance with the scheme evolved. We, therefore, hold that the petitioners have no vested or accrued right for the issuance of permits on the MEE or NQE, nor the Government is bound by its previous policy. it would be open to the Government to evolve the new schemes and the petitioners would get their legitimate expectations accomplished in accordance with either of the two schemes subject to their satisfying the conditions required in the scheme. The High Court, therefore, was right in this conclusion that the Government are not barred by the promises or legitimate expectations from evolving new policy in the impugned notification."
30.In a recent judgment rendered by the Supreme Court in State of N.C.T. of Delhi and another Vs. Sanjeev alias Bittoo, reported in AIR 2005 S.C. 2080, it was held that the judicial review of administrative action can be exercised on the grounds of "illegality", "irrationality" and "procedural impropriety". That was the decision rendered in the context of externment order issued by the Executive Authority under the Delhi Police Act, 1978. The doctrine of immunity as well as the principles of judicial review has been elicited by the Supreme Court in the following passage:
"15. One of the points that falls for determination is the scope for judicial interference in matters of administrative decisions. Administrative action is stated to be referable to broad area of Governmental activities in which the repositories of power may exercise every class of statutory function of executive, quasi-legislative and quasi-judicial nature. It is trite law that exercise of power, whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary (See State of U.P and others V. Renusagar Power Co. and others (AIR 1988 SC 1737). At one time, the traditional view in England was that the executive was not answerable where its action was attributable to the exercise of prerogative power. Professor De Smith in his classical work "Judicial Review of Administrative Action", 4th Edition at pages 285 - 287 states the legal position in his own terse language that the relevant principles formulated by the Courts may be broadly summarized as follows. The authority in which discretion is vested can be compelled to exercise that discretion, but not to exercise it in any particular manner. In general, discretion must be exercised only by the authority to which it is committed. That authority must genuinely address itself to the matter before it; it must not act under the dictates of another body or disable itself from exercising discretion in each individual case. In the purported exercise of its discretion, it must not do what it has been forbidden to do, nor must it do what it has been authorized to do. It must act in good faith, must have regard to all relevant considerations and must not be influenced by irrelevant considerations, must not seek to promote purposes alien to the letter or to the spirit of the legislation that gives it power to act, and must not act arbitrarily or capriciously. These several principles can conveniently be grouped in two main categories: (i) failure to exercise a discretion, and (ii) excess or abuse of discretionary power. The two classes are not, however, mutually exclusive. Thus, discretion may be improperly fettered because irrelevant considerations have been taken into account, and where an authority hands over its discretion to another body it acts ultra vires.
16. The present trend of judicial opinion is to restrict the doctrine of immunity from judicial review to those classes of cases which relate to de- ployment of troupes, entering into international treaties, etc. The distinctive features of some of these recent cases signify the willingness of the Courts to assert their power to scrutinize the factual basis upon which discretionary powers have been exercised. One can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground is "illegality", the second "irrationality", and the third "procedural impropriety". These principles were highlighted by Lord Diplock in Council of Civil Service Unions V. Minister for the Civil Service (1984(3) Al.ER.935), (commonly known as CCSU case). If the power has been exercised on a non-consideration or non-application of mind to relevant factors, the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated. (See Commissioner of Income-tax v.Mahindra and Mahindra Ltd. (AIR 1984 SC 1182). The effect of several decisions on the question of jurisdiction has been summed up by Grahame Aldous and John Alder in their book "Applications for Judicial Review, Law and Practice" thus:
"There is a general presumption against ousting the jurisdiction of the Courts, so that statutory provisions which purport to exclude judicial review are construed restrictively. There are, however certain areas of governmental activity, national security being the paradigm, which the Courts regard themselves as incompetent to investigate, beyond an initial decision as to whether the government's claim is bona fide. In this kind of non-justiciable area judicial review is not entirely excluded, but very limited. It has also been said that powers conferred by the Royal Prerogative are inherently unreviewable but since the speeches of the House of Lords in Council of Civil Service Unions v. Minister for the Civil Service this is doubtful. Lords Diplock, Scaman and Roskili appeared to agree that there is no general distinction between powers, based upon whether their source is statutory or prerogative but that judicial review can be limited by the subject-matter of a particular power, in that case national security. Many prerogative powers are in fact concerned with sensitive, non-justiciable areas, for example, foreign affairs, but some are reviewable in principle, including the prerogatives relating to the civil service where national security is not involved. Another non-justiciable power is the Attorney General's prerogative to decide whether to institute legal proceedings on behalf of the public interest".
31.Applying the dictum laid down by the Supreme Court to the facts on hand, I do not see any reason to interfere and issue directions to the respondents due to the reason that there is absolutely no "illegality" or "irrationality", or "procedural impropriety" in the Notification of the first respondent issued on 03.07.2008 and also exemptions given to some of the exporters on 05.07.2008.
32.The reliance placed by the learned counsel for the petitioner on the judgment of the Supreme Court in U.P. Power Corporation Ltd., and another Vs. Sant Steels & Alloy (P) Ltd., reported in 2008 2 SCC 777, has no application to the facts of this case. That was a case where a rebate given under the Electricity Supply Act, 1948 in respect of hill development was withdrawn at a premature stage. It was in those circumstances, considering the concept of faith, which is imposed by the citizen on the Government, the Supreme Court held that while withdrawing any such concessions, it is the duty of the Government to abide by its commitment, in order to avoid shortsightedness of the governance and loss of credibility of the Government. Likewise, the judgment of the Hon'ble Apex Court in Reliance Energy Limited and Another Vs. Maharashtra State Road Development Corpn.Ltd., and others reported in 2007 (8) SCC 1, relates to the doctrine of "level playing field", which is the basis of the right conferred under Article 19(1)(g) of the Constitution of India relating to Government contracts. The Supreme Court has held that such terms of contract must provide certainty and the norms and standard to be satisfied should be clear. While the celebrated concept enshrined by the Supreme Court in the above said judgment is unquestionable, especially, in the changing liberalized and Globalised Indian economy, the ratio laid down by the Hon'ble Apex Court in the said judgment cannot be made applicable to the facts and circumstances of the present case.
33.The Judgment in Union of India and others Vs. Asian Food Industries reported in 2006(13) SCC 542 relates to the Foreign Trade (Development and Regulation) Act, 1992. While considering the date of effect of commencement or amendment of the policy, the Supreme Court has held that by such amendment a vested or accrued right which has been given to a trader cannot be taken away. On the facts of the present case, inasmuch as the petitioner's case has not even fallen under the category of custody under customs authority while following the export procedures, there is no question of any accrued right vested with the petitioner.
34. Likewise, the judgment of the Supreme Court in Ashoka Smokeless Coal India (P) Limited and Others Vs. Union of India and Others reported in 2007(2) SCC 640 relates to fixing of price regarding essential commodities. In the light of the nationalization of Coal under the Coking (C) Coal Mines (Nationalization) Act, 1972, considering the categorization of consumers into two sectors, the Supreme Court has held that fixation of price of Coal, which is a vital product in Indian industries, should be fair and such policy decision of the executive of the Central Government must be construed in terms of Article 77 of the Constitution of India. The Supreme Court has held that the doctrine of legitimate expectation has been developed in the context of the principles of natural justice, which is construed on the basis of fixation of price on the point of view of the consumers. The dictum laid down in the above said judgments of the Hon'ble Apex Court are not applicable to the factual situation which has arisen for consideration in this case. As far as the argument made by the learned counsel for the petitioner that the shipping bills were presented to the Customs Authorities prior to the Notification issued by the Government is concerned, on the factual situation, the shipping bills have been entrusted by the petitioner in respect of his proposed export before the date of Notification by the Government, viz., 03.07.2008. It is always open to the first respondent, as policy matters, to re-consider the same, taking into account the fact that the quantity of maize, which the petitioner is attempting to export, is very small, but not for this Court to issue such directions. At this stage, learned counsel for the petitioner argued that the procedures adopted in respect of export policy by the various Ports are not equal, especially, in respect of the stage at which "Let Export Order" is to be issued. It is not for this Court to consider the said argument. It is always for the policy makers of the respondent to formulate uniform policy in future to be adopted equally by all the ports.
35.In view of the above said narration of the entire facts and looking from any angle, I am not able to see that the petitioner is entitled for any relief as claimed in these writ petitions. In view of the same, the writ petitions fail and the same are dismissed. Incidentally, I am placing my appreciation to the presentations of the case by the learned counsel for the petitioner and his sincere efforts of persuasion. No costs. Consequently, connected Miscellaneous Petitions are closed.
mpk/tk To
1.Director General of Foreign Trade Office of Director General of Foreign Trade Udyog Bhavan, New Delhi - 110 001.
2.The Joint Director General of Foreign Trade Office of the Joint Director General of Foreign Trade Plot No.117, K.K.Nagar, 1st Main Road, Madurai - 625 020.
3.The Commissioner of Customs Customs House, Harbour Estate, Tuticorin - 628 004.
After the judgment was delivered in the above said Writ Petitions on 17.07.2008, these matters are again posted today i.e., on 23.07.2008, under the caption 'for being mentioned' at the instance of the learned counsel for the petitioner.
2.The learned counsel appearing for the petitioner would rely upon a subsequent notice issued by the Government of India in Notification No.24(RE- 2008)/2004-09, dated 18.07.2008, in which, the Government has retained the transitional arrangement given in para 1.5 of Foreign Trade Policy 2004-09, applicable to export of Maize. It was based on the said subsequent Notification pertaining to retention of para 1.5, wherein, in respect of the goods covered by irrevocable Letter of Credit, in order to protect the interest of exporters, the transitional arrangement has been given by way of an exemption, in respect of one of the items of export made by the petitioner in W.P.No.6006 of 2008, the petitioner has been permitted to export the quantity covered in the said item. However, in respect of W.P.Nos.6004 & 6005 of 2008, such benefits has not been given. Even though, regarding one case, the entire amount has been received by advance telegraphic transfer from the intending purchaser and in respect of another consignment, the documents are with the Bank and the benefit will be given only after bankers make necessary information on receiving the amount. The learned counsel's submission is that this is subsequent event and therefore, in respect of three of the cases, petitioner in one is permitted while in respect of the other two denied and it is discriminatory.
3.In such circumstances, I am of the view that it is always open to the petitioner to work out his remedy in the manner known to law either by the way of Review or otherwise.