DGFT public notice cannot override foreign trade policy; warehoused goods were allowed quota clearance with refund and interest.

A public notice issued by the DGFT could not lawfully impose a condition excluding warehoused goods already lying at Indian ports from clearance against a subsequently issued tariff rate quota authorisation, because such a restriction altered substantive foreign trade policy beyond the DGFT's procedural role. The Gujarat HC held the condition ultra vires and without jurisdiction, and set it aside. Once the restriction fell, the balance warehoused quantity was entitled to clearance against the quota, and excess duty paid on earlier clearance was refundable with interest, consistent with the customs rule that duty is determined by the bill of entry for home consumption.

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Issues: (i) Whether the condition inserted in the public notice and replicated in the tariff rate quota licence, which excluded warehoused goods already lying at Indian ports before issuance of the licence, was within the power of the Director General of Foreign Trade. (ii) Whether the petitioner was entitled to clearance of the balance warehoused quantity against the tariff rate quota and refund of excess duty with interest.

Issue (i): Whether the condition inserted in the public notice and replicated in the tariff rate quota licence, which excluded warehoused goods already lying at Indian ports before issuance of the licence, was within the power of the Director General of Foreign Trade.

Analysis: The power to formulate and amend the foreign trade policy vests in the Central Government under the statutory scheme, while the Director General of Foreign Trade is confined to procedural implementation through handbook-based public notices. A public notice cannot alter the substantive policy or impose a restriction contrary to the policy itself. The impugned condition directly cut down the entitlement recognised under the foreign trade policy for clearance of warehoused goods against subsequently issued authorisation, and therefore went beyond procedural regulation. The condition was also inconsistent with the customs scheme governing warehoused goods and the relevant date for duty on clearance from warehouse.

Conclusion: The condition was held to be ultra vires and without jurisdiction, and was quashed.

Issue (ii): Whether the petitioner was entitled to clearance of the balance warehoused quantity against the tariff rate quota and refund of excess duty with interest.

Analysis: Once the restrictive condition was set aside, the balance quantity could not be denied clearance merely because it had been warehoused before issuance of the quota authorisation. The customs law fixed the applicable duty with reference to the date of filing the bill of entry for home consumption, and the foreign trade policy permitted clearance of warehoused goods against subsequently issued authorisation. The excess duty already paid on earlier clearance was therefore recoverable, and interest was directed on the refunded amount.

Conclusion: The petitioner was entitled to clearance of the balance quantity against the quota and to refund of the excess duty with interest.

Final Conclusion: The impugned condition was struck down, consequential relief for clearance and refund was granted, and the writ petition was allowed to that extent.

Ratio Decidendi: A procedural public notice issued by DGFT cannot amend or contradict the substantive foreign trade policy framed by the Central Government, and a restriction inconsistent with the policy and the customs framework is liable to be struck down.

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