2024 (1) TMI 647 - HC - Customs

Export of non-basmati white ricecourt refuses relief despite shipping bills, citing prohibition and unmet conditions.

Challenge to prohibition on export of non-basmati white rice concerned whether exemptions under two Notifications applied where shipping bills, vessel ... Invocation of principle of substantial compliance and intended use - Seeking directions to the Respondent to permit the petitioner to export non-basmati white rice for which shipping bills had been filed by the Petitioner and the rotation number had also been generated - HELD THAT:- A perusal of the Notification bearing No. 20/2023 dated 20.07.2023 and the subsequent amendment to the said Notification vide Notification No. 29/2023 dated 29.08.2023 indicates that there are five conditions which are to be fulfilled to get exemption for exporting 'Non-basmati white rice (semi-milled or wholly milled rice, whether or not polished or glazed: other)' which has been prohibited by the Government by the issuing the said Notifications. The Government by the said Notifications decided to prohibit completely the export of Non-basmati rice primarily in view of the rising price of the same in the market as huge quantity of rice was being exported from the country which had led to scarcity of non-basmati rice in the country and a consequent increase in prices for the same. A perusal of the facts of the present case does not indicate that the consignment of Non-basmati rice for remaining 11,000 MT rice was handed over to the customs before 21:57:01 hours on 20.07.2023 and was registered in Customs system or the Non-basmati rice consignment had entered the Customs Station for exportation before the appointed time and has been registered in the electronic systems of the concerned Custodian of the Customs Station with verifiable evidence of date and time stamping of these commodities having entered the Customs Station prior to 21:57:01 hours on 20.07.2023. Admittedly out of 28,000 MT of rice only about 11,000 MT of rice could be stored in the warehouse of the port due to space crunch. Paragraph (iii)(i) of the amended notification dated 29.08.2023 was not fulfilled. The Apex Court in State of West Bengal vs. Subhas Kumar Chatterjee, [2010 (8) TMI 1177 - SUPREME COURT] has categorically held that no mandamus lies for issuing directions to a Government to refrain from enforcing a provision of law and no court can issue mandamus directing the authorities to act in contravention of the rules as it would amount to compelling the authorities to violate law and such directions may result in destruction of rule of law. The doctrine of substantial compliance and intended use would not come in aid of the Petitioner because the purport of the Notification is to immediately put a ban on the export of Non-basmati rice, and therefore, the argument raised by the Petitioner that the Petitioner has substantially complied with the Notification and it has shipping bills, vessel call number (VCN) and the customs rotation number which shows the intention of the Petitioner to export rice would not come to its aid. The purpose of the Notification was to immediately put ban on the export of Non-basmati rice in order to meet the internal needs of the country in future. In this light, this Court is not inclined to invoke the principle of substantial compliance and intended use in the facts of the present case. The Writ Petition is dismissed. Issues Involved:1. Whether the Petitioner is entitled to export 11,000 MT of non-basmati white rice despite the issuance of Notification No. 20/2023 dated 20.07.2023 and its subsequent amendment.2. Interpretation of the conditions under the Notification and whether the Petitioner has substantially complied with these conditions.3. Applicability of the Doctrine of Substantial Compliance and Intended Use.4. Whether a writ of mandamus can be issued to compel the Government to breach its own Notification.Summary:Issue 1: Entitlement to Export 11,000 MT of RiceThe Petitioner, an exporter of rice, sought permission to export 11,000 MT of non-basmati white rice. The Petitioner argued that shipping bills were filed, and the vessel's rotation number was generated before the issuance of Notification No. 20/2023 dated 20.07.2023, which prohibited the export of non-basmati white rice. The Notification allowed exemptions under specific conditions, but the Petitioner had paid export duty only for 17 shipping bills covering 17,000 MT of rice. The vessel berthed at the port on 22.07.2023, after the Notification was issued.Issue 2: Interpretation and Compliance with Notification ConditionsThe Notification required that for the exemption to apply, either the loading of rice should have commenced before the Notification, or the consignment should have been handed over to Customs and registered in their system before 21:57:01 hours on 20.07.2023. The Petitioner failed to meet these conditions as the vessel had not berthed, and the rice was not handed over to Customs before the stipulated time. The Petitioner argued that they had taken all possible steps and should be granted an exemption under the Doctrine of Substantial Compliance.Issue 3: Doctrine of Substantial Compliance and Intended UseThe Court held that the Doctrine of Substantial Compliance could not aid the Petitioner as the Notification aimed to immediately ban the export of non-basmati rice to address internal needs. The Petitioner's argument of having shipping bills, vessel call number, and customs rotation number was insufficient as the core conditions of the Notification were not met. The Court emphasized that exemptions in Notifications must be construed strictly, and the Petitioner did not fulfill the mandatory conditions.Issue 4: Writ of MandamusThe Court stated that a writ of mandamus could not be issued to compel the Government to act contrary to its own Notification. The Petitioner sought a direction that would force the Government to breach its own rules, which the Court cannot mandate. The Notification and its amendment were not under challenge; instead, the Petitioner sought to bypass the Notification's conditions, which is not permissible.Conclusion:The Court dismissed the writ petition, stating that the Petitioner did not meet the necessary conditions for the exemption under the Notification. The Government's policy decision to ban the export of non-basmati rice was upheld, and the Petitioner's request for a writ of mandamus was denied.