Export obligation relaxation is discretionary and requires genuine hardship; normal commercial difficulties do not justify extension.

Relaxation of the export obligation period under the Foreign Trade Policy is discretionary and may be granted only on a demonstrated case of genuine hardship causing adverse trade impact. The applicable export obligation period for the goods was twelve months under the Handbook of Procedures, and the petitioner failed to show compelling hardship justifying a much longer extension. Normal commercial difficulties were held insufficient to amount to genuine hardship, and the refusal to grant further relaxation was neither perverse nor arbitrary. The challenge therefore failed and the refusal of extension was upheld.

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Issues: Whether the refusal to extend the export obligation period for the advance authorisation was arbitrary or contrary to the Foreign Trade Policy and Handbook of Procedures.

Analysis: The export obligation under the advance authorisation was a substantive condition for availing duty-free imports. Paragraph 2.5 of the Foreign Trade Policy permits relaxation only on grounds of genuine hardship and adverse impact on trade, and such relaxation lies within the DGFT's discretion. The applicable export obligation period for the goods in question was twelve months under Paragraph 4.22 of the Handbook of Procedures read with Appendix 30A, and the petitioner had not established any compelling hardship warranting extension to a much longer period. The Court also held that normal commercial difficulties do not constitute genuine hardship, and that the refusal to grant further relaxation was neither perverse nor arbitrary.

Conclusion: The challenge to the refusal of extension failed; the decision of the PRC was upheld.

Ratio Decidendi: Relaxation of export obligation conditions under the Foreign Trade Policy is discretionary and can be granted only on a demonstrated case of genuine hardship, not as a matter of right.

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