TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 493
X X X X Extracts X X X X
X X X X Extracts X X X X
....ied thereunder. 3. The petitioner is a proprietorship concern of one Dinesh Kumar and is stated to be engaged in exporting products required for personal protection. These products include products like bullet proof jackets and other items for personal safety of the security personnel. The imports of such goods are not restricted under the FTP and such goods are freely importable. The petitioner asserts that it received a purchase order for supply of bullet proof vests of the required specification from the Ministry of Interior, Tunisia. It is contended that although such bullet proof vests are freely exportable under the FTP, the petitioner has been unable to export the goods on account of the insistence of the respondent to obtain a NOC from the DoDP. 4. In the aforesaid backdrop, the controversy to be addressed is whether the condition requiring the exporters to obtain permission of DoDP for exports of products such as bullet proof vests is contrary to the FTP and/or the FTDR Act. 5. Prior to the enactment of the FTDR Act, the import and export of goods was regulated under the Import and Exports (Control) Act, 1947. The Preamble of the said Act indicated that the said Act was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n can be read in the FTP. ITC (HS) indicates the policy in respect of separate items and it is necessary to refer to entry 4 & 5 of Table-A of Schedule 2 of ITC (HS), 2012 which reads as under:- S. No. Chapter Item Description Policy Nature of Restriction 4 Any Chapter Military stores as specified by Director General of Foreign Trade Free No Objection Certificate from Department of Defence Production and Supplies, Ministry of Defence, New Delhi, except the goods as specified at Export Licensing Note 1 below which are freely exportable without the No Objection Certificate. 5 28, 29, 30, 35, 36, 37, 38, 39, 40, 48, 49, 59, 69, 70, 71, 72 to 91, 93 Special Chemicals, Organisms, Materials, Equipments & Technologies (SCOMET) goods as specified in Appendix 3 of this schedule of this book. Prohibited/ Restricted/ Free Exports governed as per the conditions indicated in Appendix-III of this schedule. Further where no specific conditions as at category 2 to 7 are enumerated, licence shall be required. 10. It is not disputed that the aforesaid entries have to be read as a part of the FTP. Entry no. 4, which relates to military stores indicates that military stores are freely ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tary stores' i.e. a No Objection Certificate from Department of Defence Production (MoD) is required except in respect of goods as specified at Export Licensing Note 1 which are freely exportable without No Objection Certificate. 3. Keeping in view the above, it is reiterated that no export of goods, which are apparently in the nature of 'Military Stores' may be allowed without No Objection Certificate from Department of Defence Production, by all units including EOU/EHTP/STP/BTP units." 13. The challenge to the validity of the impugned circular must be considered in the context of Schedule 2 of ITC (HS), 2012. 14. Plainly, the FTP empowered the DGFT to specify items of military stores that would be freely exportable subject to obtaining a NOC from DoDP. Admittedly, the DGFT has not specified any such list but, by the impugned circular, has sought to pass an omnibus order disallowing export of all goods which are 'apparently in the nature of 'Military Stores''. Clearly, the same is not in conformity with the FTP read with Schedule 2 of ITC (HS), 2012 as notified by the Central Government. 15. The next question that needs to be addressed is whether the DGFT is empowe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly, indicates that the Central Government may direct certain powers exercisable by it may be exercised by the DGFT. However, the same would not extend to powers exercised by the Central Government, inter alia, under Section 5 of the FTDR Act. Thus, notifying the FTP or any amendment thereto can be done only by the Central Government and not by the DGFT. Whilst the DGFT has the power to issue any clarification in respect of any doubts that may arise in respect of interpretation of the FTP and also specify the procedures to be followed for export or import of goods, the DGFT cannot step outside the framework of the FTP. 19. In the present case, entry no. 4 of Table A of Schedule 2 of ITC (HS), 2012 requires that a NOC be obtained from DoDP in respect of items specified by the DGFT. In the circumstances, the only role that the DGFT could play in respect of the said entry was to specify a list of items covered under the said entry. Clearly, the impugned circular is not in conformity with this entrusted function. 20. The counter affidavit filed on behalf of the DGFT indicates that the DGFT has sought to justify the impugned circular by stating that although "DGFT is a facilitator of e....