Court deems 'condition x' and TRQ Condition No. 3 illegal; orders refund of excess duty and return of Bank Guarantee.

The court ruled in favor of the petitioner, finding 'condition x' in the Public Notice and Condition No. 3 in the Tariff Rate Quota (TRQ) to be illegal and beyond the jurisdiction of the Director General of Foreign Trade (DGFT). The court directed the respondents to refund the excess duty paid by the petitioner promptly and return the Bank Guarantee furnished by the petitioner.

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Issues Involved:

1. Legality and validity of 'condition x' mentioned in para-2 of the Public Notice dated 14.06.2022.
2. Consequential condition No.3 in the Condition sheet of the Tariff Rate Quota (TRQ) dated 05.07.2022.
3. Refund of excess duty paid by the petitioner.
4. Return of the Bank Guarantee furnished by the petitioner.

Detailed Analysis:

1. Legality and Validity of 'Condition x':

The petitioner challenged 'condition x' in the Public Notice dated 14.06.2022 issued by the Director General of Foreign Trade (DGFT), arguing it was illegal, arbitrary, and beyond the DGFT's jurisdiction. The condition stipulated that only import consignments landing at Indian ports after the issuance of the TRQ license would be considered for clearance under TRQ, which contradicted Para 2.13 of the Foreign Trade Policy (FTP) allowing clearance of warehoused imported goods against a subsequently issued authorization.

The court examined the relevant provisions of the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act) and the FTP. It noted that only the Central Government could formulate and amend the FTP, while the DGFT could issue procedural notices but not alter the FTP itself. The court found 'condition x' to be contrary to Para 2.13 of the FTP, which permits clearance of goods shipped/imported prior to the issuance of a TRQ license. The court concluded that 'condition x' effectively amended the FTP, which the DGFT had no authority to do.

2. Consequential Condition No.3 in the Condition Sheet of the TRQ:

Condition No. 3 in the TRQ dated 05.07.2022 mirrored 'condition x' from the Public Notice. Since 'condition x' was found to be illegal and beyond the DGFT's jurisdiction, the court also quashed Condition No. 3 in the TRQ issued to the petitioner.

3. Refund of Excess Duty Paid by the Petitioner:

The petitioner had paid excess duty on the clearance of goods due to the imposition of 'condition x'. The court directed the respondents to refund the entire excess duty paid by the petitioner as expeditiously as possible and within one month from the date of receipt of the court's order.

4. Return of the Bank Guarantee Furnished by the Petitioner:

The petitioner had furnished a Bank Guarantee pursuant to an interim order by the court. With the quashing of 'condition x' and the related TRQ condition, the court directed the respondents to return the Bank Guarantee to the petitioner.

Conclusion:

The court allowed the petition, quashed 'condition x' in the Public Notice dated 14.06.2022 and Condition No. 3 in the TRQ dated 05.07.2022, directed the refund of excess duty paid by the petitioner, and ordered the return of the Bank Guarantee furnished by the petitioner.

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