TaxTMI 
TaxTMI 
2011 (2) TMI 288
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....shed in the Official Gazette, to make provision for development and regulation of foreign trade by facilitating imports and increasing exports. 5. Section 3(2) of the Foreign Trade Act provides that the Central Government might by order published in the Official Gazette, make provisions prohibiting, restricting or otherwise regulating import or export of goods. 6. Section 5 of the Foreign Trade Act empowers the Central Government to formulate and announce, from time to time, the Import Export Policy, by notification in the Official Gazette and in like manner, to amend that policy. 7. As rightly argued by Mr. Abhrajit Mitra, appearing on behalf of the petitioner, and admitted by the learned Additional Solicitor General of India, appearing on behalf of the respondents, the Foreign Trade Policy can only be amended by notification of the Central Government in the Official Gazette. 8. In exercise of power conferred by Section 5 of the Foreign Trade Act, the Central Government, by notification in the Official Gazette, formulated and announced the Foreign Trade Policy for the years 2009-14. 9. Paragraph 2.1 of the policy provides that exports and im....
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....otification No. 14 (RE-2010)/2009-14 was issued by the Central Government amending Serial No. 161B of ITC (HS) and thereby placing export of cotton yarn, under ITC (HS) Codes 5205, 5206 and 5207, in the restricted category. The said notification was duly published in the Official Gazette. 16. The said notification inter alia provided as follows : "3. Transitional Arrangement :- (i) The Transitional Arrangement as available under para 1.4 & 1.5 of FTP, 2009-14 will not be applicable to the export of Cotton Yarn, under this notification. (ii) However, Exporters who have obtained Registration Certificate from Textile Commissioner, Mumbai before 1st December, 2010 would be permitted to export Cotton Yarn within the quantity limit for which such registration certificate has been issued and within the validity of such registered contract. (iii) If the validity of such registered contract has expired then the registered contract holder will have no right to export under such registered contract. 4. The effect of this notification:- The export of cotton yarn (Tariff Codes 5205, 5206 ....
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....ocuments will be submitted by allottees to the RA's: (a) Application form (ANF 2D) duly filled and signed, (b) Copy of Export Contract alongwith : Either (i) A copy of irrevocable Letter of Credit (LC) duly authenticated by an Indian Bank. Or (ii) FIRC showing receipt of remittance from the concerned foreign buyer as proof of having received 100% Advance Payment. Or (iii) FIRC showing a minimum of 25% Advance Payment and balance Cash Against Delivery (CAD), (c) Copy of IEC (against which the original application to DGFT has been sent) The process of issuance of authorization would be completed by 18th February, 2011. The export under such authorizations would need to be completed before 31st March, 2011 so as to ensure export of 720 Million kg. of cotton yarn as per GoM decision." 19. It is submitted that pursuant to the aforesaid circular the petitioners applied for grant of quota for export of cotton yarn, along with all necessary documents. The petitioners are aggrieved by the Circular No. 17 (RE-2010)/2009-14 dated 10th February, 2011, ....
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....ioners, who have admittedly not exported any cotton yarn in 2009-10, have questioned the decision to allocate quota for export of cotton yarn, only to those applicants with export performance in 2009-10. 21. The Circular dated 10th February, 2011 has been challenged mainly on the ground that the circular in effect purports to amend the Foreign Trade Policy without recourse to the procedure prescribed in Section 5 of the Foreign Trade Act for amendment of the Foreign Trade Policy. 22. Mr. Abhrajit Mitra, appearing on behalf of the petitioner submitted that the Foreign Trade Policy could not be amended by an administrative circular, as has been done in the instant case. The Foreign Trade Policy could only be amended by notification in the Official Gazette. 23. Mr. Mitra also argued that the Circular dated 10th February, 2011 is discriminatory since it discriminates against exporters who did not have export performance in 2009-10. There is no intelligible differentia for discriminating between persons who had export performance in 2009-10 and those who did not have export performance during that year. 24. The learned Additional Solicitor General, appear....
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....CC 730 = 2010 (261) E.L.T. 49 (S.C.) cited by Mr. Mitra. 31. In ITC Bhavor River Board & Anr. v. Mondal Revenue Officer, AP & Ors. reported in (1996) 6 SCC 634, cited by Mr. Mitra, the Supreme Court held that where the parent statute prescribed the mode of publication of promulgation, that mode had to be followed and such a requirement was imperative and could not be dispensed with. The Court held that publication of exemption notification in the Andhra Pradesh Gazette as required by Section 11(1) of the AP Non-agricultural Lands Assessment Act, 1963 was mandatory and not really directory. 32. In MRF Ltd. v. Manohar Parikkar & Ors. reported in (2010) 11 SCC 374, cited by Mr. Mitra, the Supreme Court held that the Business Rules framed under Article 166(3) of the Constitution of India were mandatory a decision could only be treated as a decision of the Government when the decision satisfied the rules of business framed under Article 166(3) of the Constitution of India. A decision having financial implications, taken by the Minister, without the concurrence of the Finance Department as provided by the rules of business could not be treated as decision of the Governmen....
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....r Section 5 of the Foreign Trade Act. Categorization and re-categorization cannot be done by policy circulars as held by the Supreme Court in Atul Commodities (P) Ltd. v. Commissioner of Customs reported in (2009) 5 SCC 46 = 2009 (235) E.L.T. 385 (S.C.). It is not open to the Director General of Foreign Trade to change categorization of items from the category of 'free export' to category of 'restricted export'. 38. Under paragraph 2.3 of the Foreign Trade Policy, the Director General of Foreign Trade is empowered to interpret the policy. If any doubt or question arises in respect of any provision in the Foreign Trade Policy or in the matter of classification of any item in the ITC (HS) or in the handbook, the said question or doubt has to be referred to the Director General of Foreign Trade whose decision is to be binding. Similarly, once an item is placed in the restricted category and made subject to licensing, the Director General of Foreign Trade is empowered to work out details for allocation of quota for export of such item. 39. In Hindustan Granites v. Union of India a question arose as to whether policy circular No. 24 dated 30th August, 2005 limiting issua....