2008 (2) TMI 947 - HC - Customs

Court Upholds Ban on Palm Oil Imports in Kerala Ports

PARISONS FOODS (P) LTD. AND N.K. HARIS Versus THE UNION OF INDIA, NEW DELHI, THE DIRECTOR GENERAL OF FOREIGN TRADE, NEW DELHI AND THE COMMISSIONER OF CUSTOMS, COCHIN

The court upheld the legality of notifications prohibiting the import of palm oil through ports in Kerala, citing the power of the Central Government and ... - Issues Involved:1. Legality of the notifications prohibiting the import of palm oil through Kerala ports.2. Request for extending the ban on palm oil imports to other South Indian ports.Detailed Analysis:1. Legality of the Notifications Prohibiting the Import of Palm Oil Through Kerala Ports:The challenge to the impugned notifications is based on the plea that there is no power to issue such notifications prohibiting the import of goods through any particular port. The petitioners argue that the imposition of the ban on import, initially in Kochi and later through all the ports in Kerala, is without jurisdiction in terms of Sections 3 and 5 of the Foreign Trade (Development and Regulation) Act, 1992, and that they are irrational and hence arbitrary, resulting in hostile discrimination due to unintelligible differential treatment. They contend that the materials available with the Central Government and DGFT do not reveal that the recommendation of the Coconut Development Board (CDB) was for prohibition of the import of palm oil through the southern States as a whole. Additionally, they argue that the import of coconut oil and other coconut produce had been a matter of great concern for the CDB in controlling the price of coconut and coconut oil, and the imposition of import on palm oil without any restriction on the import of coconut oil is unreasonable and illegal.The court examined the statutory provisions under Sections 3 and 5 of the Act, which allow the Central Government to make provisions for prohibiting, restricting, or otherwise regulating the import or export of goods. The Foreign Trade Policy (F.T. Policy) also empowers the DGFT to notify item-wise export and import policy as specified in ITC(HS), as amended from time to time. The court upheld the power to issue the impugned notifications, stating that the power to regulate import includes the power to prohibit, and the existence of the power with the DGFT to issue the notifications is sustained.The court noted that the impugned notifications were issued after the Chairman of the CDB wrote to the Department of Agriculture and Co-operation in the Ministry of Agriculture, furnishing details and disclosing the requirement to impose a ban on import of palm oil through the southern ports. The Chief Minister of Kerala also addressed the Prime Minister of India, espousing the cause of farmers and stating specific reasons for the necessary ban. The court found that the policy under consideration was drawn on the basis of relevant materials and hence, the challenge on the ground of lack of material fails.2. Request for Extending the Ban on Palm Oil Imports to Other South Indian Ports:WP(C).35648/2007 was filed seeking the issuance of a writ of mandamus directing the Central Government and the DGFT to give effect to the recommendations of the CDB and impose a ban on import of palm oil through Chennai, Mangalore, Tuticorin, and Beypore ports, in addition to Kochi Port. The court noted that neither the Central Government nor the State Government would be bound to act on the recommendation of the CDB. The cry of the farmers, as expressed in WP(C).35648/2007, is insufficient for the judiciary to compel the Central Government and the DGFT to accept the recommendations of the CDB in toto and impose a ban on import of palm oil through the other South Indian ports. The court emphasized that drawing up an economic policy may depend on various factors, including political policies, foreign policies, bilateral agreements, and covenants between India and her reciprocal countries. It would be beyond the bounds of judiciary to step in and issue directions as sought in WP(C).35648/2007.Conclusion:The court dismissed the writ petitions, upholding the legality of the notifications prohibiting the import of palm oil through the ports in Kerala and denying the request to extend the ban to other South Indian ports. The court emphasized the broad spectrum of power conferred by the Act and the F.T. Policy, and the necessity to allow discretion to the delegate in regulating foreign trade policies.