2012 (1) TMI 204 - HC - Customs

Import of popcorn-maize: government allowed to withdraw actual user condition and notify nil customs duty, petition partly allowed

Government policy permitting duty-free import of maize and withdrawing the actual user condition is a permissible policy change because imports remain ... Import of popcorn-maize - actual user condition - N/N. 38/2002-2007 dated 04.10.2002 - Held that: - the petitioners have no vested or accrued right for the issuance of permits on the MEE or NQE, nor is the Government 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 its conclusion that the Government is not barred by the promises or legitimate expectation from evolving new policy in the impugned notification.” The policy of the Government of India stipulating the customs duty at Nil rate and withdrawing the condition of actual user cannot be said to be arbitrary, particularly, in view of the factual position evident from the table, extracted above, that the imports being way below the quota prescribed has no affect on domestic growers or the market and no harm to domestic growers or consumers is caused by notifying duty free import of maize (corn) and withdrawing the restriction of actual user. Petition disposed off - decided partly in favor of petitioner. Issues Involved:1. Whether the impugned public notice issued by the DGFT is without jurisdiction and contrary to the Government of India's policy, particularly, regarding the condition of actual user.2. Whether the impugned public notice is merely a clarification of the decision of the Government of India.3. If the withdrawal of the condition of actual user is held to be a decision by the Government of India, is it not affected by non-application of mind and is it not arbitrary and against public interest.Detailed Analysis:Issue 1: Jurisdiction and Government PolicyThe petitioner contended that the decision to withdraw the 'actual user' condition was that of the Government of India, as reflected in the prayer. The petitioner argued that under the Foreign Trade (Development and Regulation) Act, 1992, Section 5 provides that the Central Government may formulate and announce the export and import policy, and DGFT under Section 6 can only advise and implement but not formulate policy. Section 11 of the Customs Act, 1962 was also cited to argue that the Central Government has the authority to regulate imports for specified purposes.The court noted that the policy of the Government of India under the Customs Act and the Foreign Trade (Development and Regulation) Act was notified through customs notifications and public notices by DGFT from time to time. The decision to remove the 'actual user' condition was taken in an Inter-Ministerial Meeting in 2003 and was reflected in subsequent public notices. The court found that the impugned public notice was a decision of the Government of India, not DGFT, and hence, the petitioner's contention lacked substance.Issue 2: Clarification of Government DecisionThe respondents argued that the impugned public notice was issued to clarify the removal of the 'actual user' condition, which was decided in the Inter-Ministerial Meeting in 2003. The court observed that the public notices issued post-2003 did not contain the 'actual user' condition, and the impugned notice was merely clarificatory. The court concluded that the public notice was in line with the Government of India's policy and not an independent decision by DGFT.Issue 3: Non-application of Mind and Public InterestThe petitioner argued that the withdrawal of the 'actual user' condition was arbitrary and not in public interest, affecting domestic farmers. The court examined the import data and found that the imports were significantly below the prescribed quota, indicating no substantial impact on the domestic market. The court also referred to legal precedents, emphasizing that policy decisions by the Government of India are generally not justiciable unless proven to be arbitrary or against public interest.The court cited Supreme Court decisions, including AKHIL BHARAT GOSEVA SANGH v. STATE OF A.P. and DARSHAN OILS PVT. LTD v. UNION OF INDIA, to support the view that policy changes in public interest are permissible and not subject to judicial review unless they violate fundamental principles of law.Conclusion:The court dismissed the writ petition, holding that the impugned public notice was a clarificatory action by DGFT to implement the Government of India's decision, which was neither arbitrary nor against public interest. The court found no merit in the petitioner's claims and ruled in favor of the respondents, with no order as to costs.