TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 504
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....The members of the Association are engaged in manufacturing Ceramics Glaze and Glass Frit (Mixture). For such manufacturing activity, they require boric acid in large quantities. The boric acid we are informed is used for giving glaze to the tiles. The boric acid is also used in preparation of variety of insecticidal uses in agriculture. The boric acid thus has insecticidal and non insecticidal uses. The petitioners use boric acid for non insecticidal purposes. 3. To meet with the requirement of boric acid, the petitioners would depend heavily on the imports. According to the petitioners, there are few manufacturers of boric acid in India. The price of boric acid in the local market is much higher than in the international market. For long, import of boric acid was freely allowed and was subject to no conditions. The local manufactures however, represented the Government of India to restrict the imports so that the users of boric acid like the petitioners would be compelled to purchase boric acid from them. It is pointed out that on 1.6.2004, Borax Manufacturers Association of India made a detailed representation to the Ministry of Agriculture as under : "Loss of Value addition i....
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....egates from Borax Manufacturers Association of India on 17.6.2004 in which it was concluded as under : "After considering these details, the Hon'ble Agriculture Minister passed the following orders: i. Al importers of the Boric Acid should compulsorily obtain certificate of registration from the Registration Committee for import. ii. Import of Boric Acid should not be allowed as end use of Boric Acid in various industries due to its pesticidal properties and necessary directives be sent to the Customs Department to stop illegal import of Boric Acid till the importers obtain registration under the Act. iii. Indigenous manufacturers of Boric Acid should also submit applications to obtain registration certificate and they may be given two years period for registration." 6. According to the petitioners on account of such efforts by the local manufacturers of boric acid, the Ministry of Agriculture issued a circular dated 26.08.2005 providing certain restrictions on the import of boric acid for non insecticidal use. The circular reads as under : "The undersigned is directed to refer to this Department's communication of even number dated 17.12.2004 on the subject cited....
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....ighly toxic in nature. Therefore, to ensure the safety and to prevent risk to human life or animals or environment and to prevent misuse and abuse of such insecticides, the import of boric acid has been regulated. Such regulatory measures have been provided in cases of similar other multiuse insecticides such as sodium cyanide, copper sulphate, etc. It is further stated that the boric acid has insecticidal as well as non insecticidal uses for industrial application. Looking to the nature of the substance, its application cannot be allowed unregulated. Such use is therefore, regulated. The Registration Committee was competent to assess the quantity requirement of the importer and to grant permission for it to meet genuine requirement. It is further stated that the policy is framed for regulating insecticides for the purpose of safeguarding human health, plant, animal life and environment and the regulation is necessary also to ensure that the product is used only for the intended purpose. It is pointed out that misuse of insecticides can cause wide spread effect on the health of the population. Boric acid is known to have caused deaths in Malaysia. It is pointed out that non insecti....
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.... as 'insecticides' under the Act] require mandatory registration for import. In cases, where the 'insecticide' is imported for non-insecticidal purpose, an import permit is necessary from the Registration Committee under the Department of Agriculture and Cooperation. The Registration Committee while granting registration for a permit for import of an insecticide spells out the conditions for import which inter alia, may include reference to the source of import. No 'insecticide' can be imported from a source other than that specified on the certificate of registration or the permit, as the case may be. In addition, the Registration Committee may issue regulatory guidelines from time to time with respect to safety, efficacy, quality etc. which warrant full compliance from importers." 11. On the basis of such materials on record, learned counsel Shri Devan Parikh for the petitioners raised the following contentions : i) The entire exercise of regulating the imports of boric acid for non insecticidal use was on the basis of representations made by the local manufacturers. The Government of India imposed restriction so that the boric acid users may be compell....
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....ted in (1989) 4 Supreme Court Cases 187, in which it was observed that Rules are liable to be declared invalid if they are manifestly unjust or oppressive or outrageous or directed to an unauthorised end or violative of the general principles of the law of the land or so vague that it cannot be predicted with certainty as to what is prohibited by them or so unreasonable that they cannot be attributed to the power delegated or otherwise disclose bad faith. c) In case of Bombay Dyeing & Mfg. Co. ltd (3) v Bombay Environmental Action Group reported in (2006) 3 Supreme Court Cases 434, in which it was held that though a presumption of constitutionality of a statute would arise also in case of subordinate legislation, such legislation would be susceptible or vulnerable to challenge not only on the ground that the same offends Articles 14 and 21 of the Constitution but also that the provisions of MRTP Act are unreasonable. 13. On the other hand, learned advocate Shri Nikunt Raval for the Union of India submitted that the Government of India policy is sound and merely regulates the import of boric acid. Such regulations are needed since the substance is highly toxic. To ensure that the ....
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....which is to have due regard not only to its impact on the internal or international trade of the country but also on monetary policy, the development of agriculture and industries and even on the political policies of the country involving questions of friendship, neutrality or hostility with other countries. It may be difficult for any court to have adequate materials to come to a proper decision whether a particular policy as regards imports is, on a consideration of all the various factors involved, in the general interests of the public. Even if the necessary materials were available it is possible that in many cases more than one view can be taken whether a particular policy as regards importswhether one of heavy customs barrier or of total prohibition or of entrustment of imports to selected agencies or channelsis in the general interests of the public. In this state of things the burden on the person challenging that the government of the country is not right in its estimate of the effects of a policy as regards imports in the general interests of the public will be very heavy indeed and when the Government decides in respect of any particular commodity that its import shoul....
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....s in future. Later on also instances of food poisoning came to light. The Insecticides Act, 1968, was enacted therefore, in order to combat menace of food poisoning arising from contamination of food and insecticides etc. The Act was therefore, enacted to regulate the import, manufacture, sale, transport, distribution and use of insecticides with a view to prevent risk to human beings or animals, and for matters connected therewith. * Clause (e) of section 3 of the Act defines the term 'insecticides' as under : "Insecticide" means (i) any substance specified in the schedule; or (ii) such other substances (including fungicides and (weedicides) as the Central Government may, after consultation with the Board, by notification in the official Gazette, include in the schedule from time to time; or iii. Any preparation containing any one or more of such substances;" * Section 5 of the Act pertains to constitution of Registration Committee. Under subsection( 1) thereof, the Central Government is required to constitute a Registration Committee consisting of a Chairman, and not more than five persons, who shall be the members of the Board including the Drugs Controller, I....
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....travention of section 27, is liable to punishment. Section 31A of the Act authorises the State Government to set up Special Courts for speedy disposal of cases under the Insecticides Act. Section 38 of the Act is an exemption provision and reads as under : "38. Exemption (1) Nothing in this Act shall apply to: (a) the use of any insecticide by any person for his own household purposes or for kitchen garden or in respect of any land under his cultivation; (b) Any substance specified or included in the Schedule or any preparation containing any one or more such substances, if such substance or preparation is intended for purposes other than preventing, destroying, repelling or mitigating any insects, rodents, fungi, weeds and other forms of plant or animal life not useful to human beings. (2) The Central Government may, by notification in the official Gazette, and subject to such conditions, if any, as it may specify therein, exempt from all or any of the provisions of this Act or the rules made thereunder, any educational, scientific or research organization engaged in carrying out experiments with insecticides." 17. A quick look at these statutory provisions would demonst....
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....on( 1) exempts the use of insecticides for non insecticidal purposes from the purview of the Act. Subsection (2) of section 38 gives powers to the Central Government to grant exemption for use of insecticides for educational, scientific or research purposes. Foreign Trade (Development and Regulation) Act, 1992 19. We may now peruse the relevant provisions of the Foreign Trade (Development and Regulation) Act, 1992 ("the Act of 1992" for short). Section 3 of the Act of 1992 pertains to power to make provisions relating to imports and exports. Under subsection( 1) of section 3, the Central Government has the power by issuing order published in the Official Gazette, to make provision for development and regulation of foreign trade by facilitating imports and increasing exports. Under subsection( 2) of section 3, it is open to the Central Government by issuing order published in Official Gazette, to make provisions for prohibiting, restricting or otherwise regulating involving specified classes of cases and subject to such exceptions, if any, the import or export of goods or services or technology. Under section 5 of the Act of 1992, the Central Government may from time to time form....
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....hat a person can import any goods into India. As is wellknown, the Government of India frames such ImportExport policy typically operating for a period of five years. It is in exercise of such powers that while amending the ImportExport policy by the said notification dated 7.4.2006, it was provided that the import of boric acid may be subject to the condition that same would be imported on a permit issued by the Central Insecticide Board and Registration Committee under the Ministry of Agriculture. It is therefore, a misconception to argue that the Ministry of Agriculture is seeking to regulate the import of boric acid in exercise of powers under the Insecticides Act, 1968. The Central Insecticide Board and Registration Committee under the Ministry of Agriculture is only assigned the task of processing applications by the prospective importers for granting the import permit. There is nothing either unreasonable in this Act or impermissible in the statute for the Government of India so to do. Under the Act of 1992, the Government of India has ample powers to regulate the import policy. While doing so, it is either open for the Government of India to prohibit or restrict import of a....
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.... non insecticidal purposes where it is likely to cause damage to plants, animals or human beings, such policy decision cannot be faulted. The judicial review of a policy decision of Government of India is extremely limited. Ordinarily, this Court would not enter into the correctness or advisability of a certain policy and substitute its own opinion, understanding or wisdom over that of the policy making body. It is the Government of India which has necessary wherewithal, scientific and technical expert advise and more essentially, responsibility of taking policy decisions. Additionally, such policy decision has been given shape of statutory provisions albeit in exercise of powers of subordinate legislation. As is wellknown, even subordinate legislation carries a presumption of constitutionality. It is for one who propounds the same as being arbitrary, unreasonable or in any other manner unconstitutional to establish the same through necessary facts. We have noted the provisions contained in the Act of 1992. We also noticed the provisions contained in the Insecticides Act, 1968. We do not find that the policy of the Government of India to ensure that imports of boric acid for non in....
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....rted for insecticidal purposes is defeated. We find ourselves unable to accept that when a traders imports large quantities of boric acid it could be said to be a case where he intends to use it for noninsecticidal purposes. The intention to use boric acid for noninsecticidal purposes must be determined at a point of time when he actually carries out the import. It may transpire that when a trader imports, he may have the general intention to sell it to customers who may use it for noninsecticidal purposes. It may also be true that if, after the import of boric acid for non insecticidal purposes, he uses it for insecticidal purposes either by himself or by sale to those who do not use it for noninsecticidal purposes the Law may catch up with him. But that is not to say that if the Government thought it fit to put in place the safeguards that only those who are able to show that they have an intention to import boric acid for noninsecticidal purposes with certainty proved by objective criteria supported by documentary evidence and facts and figures should be allowed to import the court should strike it down." 26. We are conscious that in the review petition filed by the importers,....