Export controls cannot be expanded by circular; Delhi HC quashes blanket restriction beyond the notified trade policy framework.

Export restrictions must be traceable to the notified Foreign Trade Policy or an existing law; an administrative circular cannot create a new embargo on goods not shown to be specifically restricted. The Delhi HC held that a blanket requirement of a no objection certificate for goods said to be in the nature of military stores was inconsistent with the Foreign Trade Policy and the Foreign Trade (Development and Regulation) Act, 1992 because the items were not shown to fall within the restricted framework, including the SCOMET list. It also held that the Director General of Foreign Trade could not use a circular to enlarge or alter policy beyond the power to specify procedure or clarify the policy. The circular was quashed.

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Issues: (i) Whether the impugned circular barring export of goods apparently in the nature of military stores without a no objection certificate was contrary to the Foreign Trade Policy and the Foreign Trade (Development and Regulation) Act, 1992; (ii) Whether the Director General of Foreign Trade was empowered to issue an omnibus direction restricting exports beyond the policy framework.

Issue (i): Whether the impugned circular barring export of goods apparently in the nature of military stores without a no objection certificate was contrary to the Foreign Trade Policy and the Foreign Trade (Development and Regulation) Act, 1992.

Analysis: The Foreign Trade Policy proceeds on the basis that exports are free unless regulated by the policy or by any other law in force. Schedule 2 of ITC (HS), 2012 contemplated only military stores as specifically identified by the Director General of Foreign Trade, and the policy did not itself impose a general embargo on all goods that might be loosely described as military stores. Since the items in question were not shown to be expressly restricted by the policy or any other law, and were not included in the SCOMET list, the circular created a restriction not found in the notified policy framework.

Conclusion: The circular was held to be inconsistent with the Foreign Trade Policy and the Foreign Trade (Development and Regulation) Act, 1992 and could not stand.

Issue (ii): Whether the Director General of Foreign Trade was empowered to issue an omnibus direction restricting exports beyond the policy framework.

Analysis: The Director General of Foreign Trade is responsible for advising on and carrying out the foreign trade policy, and may specify procedure or clarify interpretation, but cannot modify the policy itself or assume powers reserved to the Central Government under Section 5. The only permissible function under the relevant entry was to specify the items of military stores requiring clearance, not to impose a blanket prohibition by circular. The justification based on broad national commitments could not authorise action outside the statutory and policy scheme.

Conclusion: The Director General of Foreign Trade was held not to have power to issue the impugned omnibus restriction.

Final Conclusion: The writ petition succeeded, the impugned circular was quashed, and the exporter was left free to export items not otherwise prohibited or restricted under the governing policy or law.

Ratio Decidendi: An administrative authority exercising delegated trade powers cannot impose a restriction on exports unless the restriction is traceable to the notified policy or to an existing law, and it cannot enlarge or alter the policy by circular.

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