DGFT clarification on dried garlic classification under EXIM Policy treated as existing policy interpretation and referred to Larger Bench.

A DGFT circular interpreting ITC (HS) Heading 071290.04 treated "dried garlic" as garlic with moisture content not exceeding 10% and was analysed as a clarification issued under express power to resolve doubts on EXIM Policy interpretation. The circular was treated as reflecting the existing policy position, not as a fresh policy change, and was considered capable of operating from the start of the policy period. The reasoning also invoked the presumption of regularity for official acts and rejected the view that commercial parlance could override an express delegated clarification. The validity and binding effect of the circular were not finally decided and the issue was referred to a Larger Bench.

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Issues: Whether the DGFT circular clarifying that "dried garlic" under ITC (HS) Heading 071290.04 would cover garlic with moisture content not exceeding 10% was a valid and binding clarification under Para 4.13 of the EXIM Policy, 1997-2002.

Analysis: The clarification was issued under the DGFT's express authority to resolve questions and doubts on interpretation of the EXIM Policy and ITC (HS) classification. The circular was treated as a clarification of the existing policy position rather than a change in policy, and therefore capable of operating from the commencement of the policy period. The presumption of regularity attached to official acts was also invoked, and the omission of any express reference in the circular to the source of the doubt did not, by itself, undermine its validity. The reasoning rejected the view that commercial parlance could override the statutory clarification where the delegated authority had already spoken on the classification issue.

Conclusion: The validity and binding nature of the DGFT circular was not finally decided in the appeal and the issue was referred for determination by a Larger Bench.

Final Conclusion: The controversy on classification of dried garlic under the EXIM Policy remained unresolved at this stage and was placed before a Larger Bench for authoritative decision.

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