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VIBHU BAKHRU, J

1. The petitioner is a two star export house status holder and has filed the present petition impugning the communication dated 31.05.2013 issued by the office of Additional Director General of Foreign Trade (hereinafter referred to as "Additional DGFT"). By the said communication, hereinafter referred to as the 'impugned communication', the Additional DGFT had informed the petitioner that it's entitlement under the Advance Authorization No. 0510324315 dated 09.05.2012, was limited to a sum of `38,83,52,050/- instead of `77,03,73,810/- (USD 1,54,07,476.20). The petitioner was further advised to submit the said Advanced Authorization for endorsement of Bank Guarantee condition for the differential amount.

19) may also be exercised, in such cases and subject to such conditions, by the Director General or such other officer subordinate to the Director General, as may be specified in the Order."

10. It is thus seen that the DGFT is appointed for the purposes of the FT(D&R) Act and is responsible for carrying out the export-import policy that may be formulated by the Central Government.

11. In exercise of powers under Section 5 of the said FT(D&R) Act, the Central Government has notified the Foreign Trade Policy, 2009-2014. Paragraph 2.4 of the said policy expressly empowers DGFT to specify the procedure to be followed by an exporter/importer/licensing authority/competent authority for the purposes of implementing the FT(D&R) Act, the Rules and Orders made there under and the Foreign Trade Policy. Admittedly, the Handbook of Procedures has been notified by the DGFT in terms of the Foreign Trade Policy.

20. Given the scheme of the FT(D&R) Act, the Foreign Trade Policy and the role of DGFT, the Handbook of Procedures as notified by the DGFT is to specify the procedure for the purpose of carrying out the policy as formulated by the Central Government. Since the Foreign Trade Policy expressly provides that a status holder will have the privilege of exemption from providing a Bank Guarantee in respect of any scheme, the Handbook of Procedures - which is for providing the procedure in aid of the Foreign Trade Policy - cannot impose a condition which militates against the said Policy. Thus, in this view, the repugnancy between clause 4.7.3 of the Handbook of Procedures and paragraph 3.10.4(v) of the Foreign Trade Policy must be resolved in favour of the Foreign Trade Policy. The condition imposed under clause 4.7.3 of the Handbook of Procedures to the extent that it requires a "status holder" to provide a bank guarantee to the Custom Authorities for the duty free inputs is contrary to policy and is, thus, liable to be disregarded.

21. A Division Bench of the Bombay High Court in the case of Narendra Udeshi v. Union of India: 2003 (1) BomCR 500 has also expressly held that the circular in public notices issued by DGFT which are inconsistent with the Foreign Trade Policy framed by the Central Government would be liable to be set aside. The court further held that:

"The Hand Book of procedures prescribed by the DGFT must be in consonance with the policy and must aid and advance the policy of the Central Government and not scuttle or defeat the policy. In the instant case, the Hand Book of procedure has been amended by the DGFT to prohibit duty free import of natural rubber under the advance licence when the EXIM Policy expressly permits duty free import of natural rubber under an advance licence. Therefore, the impugned circulars and the public notice are beyond the scope and ambit of the powers vested in DGFT and, therefore, liable to be quashed and set aside."