Court affirms Notification No. 38/2015-2020 validity post Gazette publication. Imports exempt under LoCs.

Vinayaga Marine Petro Ltd., Viraj Impex Private Limited, K. Amishkumar Trading Pvt. Ltd., RKB Global Pvt. Ltd. Versus Union of India & Ors.

Vinayaga Marine Petro Ltd., Viraj Impex Private Limited, K. Amishkumar Trading Pvt. Ltd., RKB Global Pvt. Ltd. Versus Union of India & Ors. - 2019 (366) ... Issues Involved:
1. Effective date of the Notification No. 38/2015-2020.
2. Validity of the Notification issued by the Directorate General of Foreign Trade (DGFT).
3. Retrospective application of the Minimum Import Price (MIP) conditions.
4. Exemption of imports under Letters of Credit (LoCs) opened before the notification date.

Issue-wise Detailed Analysis:

1. Effective Date of the Notification No. 38/2015-2020:
The primary issue was whether the Notification No. 38/2015-2020, dated 5th February 2016, was effective from the date it was put on the website (5th February 2016) or from the date it was published in the Official Gazette (11th February 2016). The court held that the notification would be effective from the date of its publication in the Official Gazette, i.e., 11th February 2016. This conclusion was based on the mandate of Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (FT Act), which requires that orders made by the Central Government be published in the Official Gazette to be effective. The court emphasized that publication in the Official Gazette is a condition prescribed to operationalize and make the order effective.

2. Validity of the Notification Issued by the DGFT:
The petitioners contended that the DGFT was not authorized to issue the notification as the power under the FT Act vests exclusively with the Central Government. The court rejected this contention, stating that the notification was indeed issued by the Central Government and not as an act of delegated legislation by the DGFT. The notification clearly stated that it was published by the Ministry of Commerce and Industry, Department of Commerce, and that the Central Government had amended the import policy conditions. Therefore, the notification was valid and issued by the Central Government under the FT Act.

3. Retrospective Application of the MIP Conditions:
The petitioners argued that the notification should not have retrospective effect from 5th February 2016, as it was only published in the Official Gazette on 11th February 2016. The court held that the notification did not have retrospective effect and would apply to imports made on or after 11th February 2016. The court referred to the Supreme Court's decision in Director General of Foreign Trade and Another versus Kanak Exports and Another, which held that subordinate legislation could only be prospective unless the rule-making authority was vested with the power to make retrospective subordinate legislation under the statute. The court concluded that the notification was not given retrospective effect and applied only from the date of its publication in the Official Gazette.

4. Exemption of Imports under LoCs Opened Before the Notification Date:
The petitioners challenged paragraph 2 of the notification, which exempted imports/shipments under irrevocable LoCs opened before 5th February 2016, arguing that the date should be 11th February 2016. The court held that the date of the notification (5th February 2016) was valid for the purpose of paragraph 2, as this was the date on which the decision to impose MIP was made public via the website, even though it was not gazetted until 11th February 2016. The court emphasized that paragraph 2 of the notification specifically referred to the date of the notification and not the date of its publication in the Official Gazette. The court also referred to paragraph 1.05(b) of the Foreign Trade Policy 2015-2020, which allows for exemption of imports under irrevocable LoCs established before the date of imposition of restrictions, provided the conditions stated therein are met.

Conclusion:
1. The notification No. 38/2015-2020 dated 5th February 2016 is effective and applicable to imports made on or after 11th February 2016, the date of its publication in the Official Gazette.
2. The notification was validly issued by the Central Government and not as an act of delegated legislation by the DGFT.
3. The notification does not have retrospective effect and applies only from the date of its publication in the Official Gazette.
4. Exemption for imports under irrevocable LoCs is valid for LoCs opened before 5th February 2016, the date the notification was made public, even though it was not gazetted until 11th February 2016.

Final Order:
The writ petitions were dismissed, and the court concluded that the notification was valid and effective from 11th February 2016, with no retrospective effect. The exemption for imports under irrevocable LoCs opened before 5th February 2016 was upheld. No order as to costs was made.