Trade policy restriction cannot defeat lawful customs concessions or treaty benefits under the guise of public interest.

A trade policy notification restricting marble imports from Sri Lanka to the Kolkata Port was held invalid because the stated grounds did not amount to legitimate public interest. The supposed need to prevent non-Sri Lankan-origin marble from entering had no rational nexus with limiting import to one port, since origin checks could be enforced at any port. The further aim of offsetting a customs duty-free concession and discouraging imports was treated as an attempt to defeat a lawful statutory and treaty-based benefit. Power to amend trade policy cannot be used to nullify a customs concession without withdrawing it or amending the underlying treaty or exemption framework.

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Issues: Whether the notification restricting import of marble from Sri Lanka only through the Kolkata Port, issued under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 read with para 2.1 of the Foreign Trade Policy, was valid and in public interest.

Analysis: The impugned notification amended the import schedule and restricted the route of import. The stated ground that the restriction would prevent import of non-Sri Lankan-origin marble was held to have no nexus with confining imports to one port, because such misuse could be checked at any port. The second stated ground, namely to neutralize the duty-free benefit available under the customs exemption and thereby discourage imports, was found to be an object of defeating a lawful statutory concession. An action aimed at overriding a concession under the customs regime or the treaty, without withdrawing the concession or amending the treaty itself, could not be treated as a legitimate public interest measure.

Conclusion: The notification was invalid, as it was not issued for a legitimate public interest purpose and could not lawfully be used to defeat the duty-free concession.

Ratio Decidendi: A power to amend trade policy in public interest cannot be exercised to nullify a lawful customs concession or treaty benefit under the guise of restricting imports, especially where the stated objective has no rational nexus with the restriction imposed.

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