Direct import entitlement under import policy applies when canalised supply fails and indigenous arrangements are not made.

An actual user may seek direct import of carbon steel re-rollable scrap under the Import Export Policy when the canalising agency does not arrange supply within the stipulated period and adequate indigenous supply is not made. The Court treated the policy as intended to ensure raw material availability for industrial production, and found that the petitioners had followed the prescribed channel, repeatedly sought supply, and received only a small part of the assessed requirement. As indigenous arrangements were not shown to have been made within the policy period, relief was granted, subject to proportional adjustment for limited foreign exchange availability, rather than a total denial of the import facility.

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Issues: Whether the petitioners were entitled to direct import of carbon steel re-rollable scrap under para 155(1) of the Hand Book of Import Export Procedure AM-1984 after the canalising agency failed to effect supply within the stipulated time and the indigenous supply arrangements were not made.

Analysis: The entitlement of an actual user to approach the Monitoring Committee for direct imports arises when the canalising agency does not indicate supply arrangements within 90 days of registration or does not effect deliveries for which it has or could have taken financial cover. On the facts, the petitioners had registered their requirements, pursued the prescribed channel, and repeatedly sought supply from the canalising agency and the steel agencies. The record showed that only a small part of the assessed requirement had been supplied, while the respondents failed to establish that adequate indigenous arrangements had been made within the policy period. The policy was intended to ensure supply of raw material to actual users and not to frustrate industrial production. The Court also accepted that limited foreign exchange could justify a proportional adjustment, but not a total refusal of the facility.

Conclusion: The petitioners were entitled to relief and the respondents were required to first arrange indigenous supply and, failing that, issue a direct import licence to the extent of the balance assessed requirement.

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