TaxTMI 
TaxTMI 
2018 (11) TMI 772
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....rs have further stated that as per the provision as contained in Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, the power has been conferred upon Central Government to frame a Export Import Policy (EXIM Policy) and consequently a policy has been framed by the Central Government known as Foreign Trade Policy, 2015-2020 in which Exim Code No.0713 10 00, Item Description - Peas finds place in the category of Free Trade. 04-The petitioners have also stated that the petitioner Firm is engaged in the business of import of Peas since 2014 and has entered into some contract for import of Yellow Peas by executing agreements on the agreed terms and conditions between the parties by depositing part payment in the bank account of seller for supply of Yellow Peas through International Banking System / Channel between 20/03/2018 to 19/04/2018 as per prevailing Exim Policy. The petitioner Firm has entered into as many as eleven contracts. 05-The petitioner Firm has further stated that the respondent No.2 Director General of Foreign Trade has changed the Import Policy for Yellow Peas for which the respondent No.2 has issued a notification dated 25/04/2018 and has amen....
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....cts along with the requisite documents. The petitioners have further stated that another trade notice was issued on 16/05/2018, wherein clarification was made clarifying that Import Policy of item under Exim Code No.0713 10 00-Peas, which includes all Peas has been restricted and it is not restricted to Yellow Peas only and the notification will also be applicable prospectively from the date of notification. 10-The petitioner Firm has further stated that the respondent No.2 has issued further trade notice on 18/05/2018 and the same was contrary to the conditions stipulated in the notification dated 25/04/2018 but was also against the conditions mentioned in the earlier trade notice dated 09/05/2018 and 16/05/2018. By the aforesaid notification, it was made clear that the respondent No.2 will permit those contracts for registration, wherein part payment has been made, however, in the earlier notification dated 18/05/2018, it was clarified that respondent No.2 will permit import of Yellow Peas only against the contracts, wherein full or 100% advance payment was made prior to 25/04/2018. 11-In the trade notice dated 18/05/2018, there were certain other instructions for cancellat....
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....ed on 17/08/2018 by which Registration Certificate for import of minimum quantity of 125 Metric Ton of Peas or less per contract irrespective of advance payment was to be entertained. 15-In the meanwhile, the petitioner Firm has received a Commercial notice from Exporter ILTA that the requisite quantity of Yellow Peas amounting to 257.510 MTs will be shipped for Kolkata Port through Invoice dated 19/08/2018 and as the petitioner Firm is not having Registration Certificate for the said quantity, it is not in a position to receive the same. The petitioner Firm again based upon notification dated 17/08/2018 requested on 25/08/2018 to the respondents to issue fresh Registration Certificate of minimum quantity of 125 Metric Tons in favour of the petitioner Firm and the respondents have issued the Registration Certificate on 29/08/2018 by which permissions were granted to rest of the quantity by deducting the quantity from the earlier Registration Certificates issued on 10/07/2018. 16-While the writ petition was pending, another notification was issued on 29/08/2018, withdrawing the earlier notification dated 02/07/2018, meaning thereby, restriction on import of Peas was withdrawn.....
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....ion is liable to be quashed. 20-He has further stated that it is a settled position of law that taxing statutes are to be interpreted strictly and the language of the statute is to be read as it is. The construction which requires for its support addition or substitution of words or which results in rejection of words has to be avoided and there is no scope for intendment in taxing statutes. The restriction was imposed vide notification dated 25/04/2018 for import of Yellow Peas, wherein it was stipulated that during the period from 01/04/2018 to 30/06/2018 an importer will get a licence to import the Peas and the notification further provided that for contracts against which advance payment has already been made prior to 25/04/2018, the same should be registered with the Regional Authorities and the rigors of licensing requirements will not be applicable to such contracts. 21-The contention of the learned Senior Counsel is that the phrase used in the notification is "Advance Payment" without qualifying the nature of the advance, which can be either in full or in part. He has further argued that in terms of the settled, law there is no scope of intendment in the present case ....
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....in case of the petitioner and the action of the respondents is arbitrary, anarchic and unconstitutional because the respondents are implementing the notification and conditions of trade with retrospective effect which is not acceptable in the eyes of law. The petitioners have executed all the trade contracts before 25/04/2018 and further made part payment / advance payment against the aforesaid trade contracts and therefore, even otherwise in light of notification dated 25/04/2018, the trade contracts of the petitioner Firm are liable to be registered because the petitioner Firm had made advance payment to the other party, which is in accordance to the policy prevailing at the relevant point of time. 26-It has been further contended that it is also a matter of consideration that as per the guideline issued by the Reserve Bank of India, no trader can make payment of more than Rs. 2 Lakhs U.S.D. to the other party. In the present case, the direction issued by respondent No.2 regarding 100% payment is in contravention to the guidelines of the RBI. Learned counsel has submitted that the petitioner has earned goodwill and reputation in the international market because of fair and gen....
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.... "During the period from 01st April to 30th June, 2018 total quantity of one lakh MT of yellow peas minus the quantity already imported from 01/04/2018 till date will be allowed against license as per procedure to be notified by DGFT. "Already Imported" will include shipment already arrived from 01/04/2018 till 25/04/2018 and those shipments backed by Irrevocable Commercial Letter of Credit (ICLC) and Advance Payment made through Banking Channel before 25/04/2018. Both these categories will be required to be registered with Jurisdictional Regional Authority as per Para 1.05 of Foreign Trade Policy, 2015-2020." 29-The contention of the respondent is that the background to the above notification is to safeguard the interests of the farmers. The farmers are one of the most important stakeholders in matters related to import / export of agricultural goods and the Government is required to strike a balance between the interests of domestic producers and importers. Whenever, it is observed that large scale imports of an item is adversely impacting the interest of the domestic producers, due to fall in prices in the local market, the Government in consultation with al....
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....10 dated 16/05/2018, it has been clarified that the Import Policy of item under Exim Code 0713 100 00-Peas (Pisumsativum) includes all Peas i.e. Yellow Peas, Green Peas, Dun Peas and Kaspa Peas and the effect is not restricted to only "Yellow Peas", but to all items classified under Exim Code 0713 100 00. It has been further stated that in cases where the import shipment of Peas are dated 01/04/2018 till 24/04/2018, no registration with DGFT is required for shipments with B/L prior to 25/04/2018 (i.e. 01/04/2018 - 24/04/2018), as the notification No.4 restricting import of Peas was issued only on 25/04/2018. 34-It has been further contended that the Government considered the representations / applications received from various associations / importers with a request for allowing the imports which are backed by part advance payments and considering the hardship faced by the trade, the Government vide Trade Notice No.19/2018-19 dated 05/07/2018 decided to allow imports of Peas under Exim Code 0713 10 00 against advance payments for that much quantity proportional to the part advance payment made before 25/04/2018. 35-Considering that the clarification on inclusion or all kind o....
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....rious Courts across the Country on the operation of such notifications. 2. In this regard, it is clarified that the notification published in the Gazette of India Extraordinary Part-II, Section 3, Sub-Section (ii), by the Directorate General of Foreign Trade, Department of Commerce, Ministry of Commerce and Industry, Government of India are issued with the approval of the competent authority, i.e. Central Government through Commerce & Industry Minister exercising powers conferred under Section 3 of FR (D&R) Act, 1992 read with paragraphs No.1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time. 3. It is further clarified that these notification are being signed by the Director General of Foreign Trade as the authenticating officer on behalf of the President of India under Government of India Authentication (Orders and Other Instruments) Rules, 2002 issued vide notification S.O. 211(E) dated 16/02/2002 and in pursuance of the Order No.A-11013/1/91-E.III dated 24/03/1993 by the Ministry of Commerce." 39-Thereafter, the Central Government vide notification No.32/2015-2020 dated 30/08/2018 notified that import policy of Peas classified ....
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....words "already imported". This is what Policy Condition No. 4 speaks of. It is only, therefore, to take care of the quantity between 1st April, 2018 till 25th April, 2018 and for enabling the deduction or subtraction of that quantity from the total permissible 1 lakh MT that this Notification was issued. This Notification amends Chapter 7 of the ITC (HS) 2017, Schedule-I (Import Policy). The condition, subject to which the existing policy has been revised and the import is restricted, also specifies the period. The period is 1st April, 2018 to 30th June, 2018. The total quantity is one lakh metric ton of yellow peas. There was a quantity already imported from 1st April, 2018 to 25th April, 2018, which is the date of issuance of the Notification. How that quantity, which is already imported, has to be dealt with is provided in this policy condition and because that condition employs the words "already imported", the ambit and scope of these words and expression had to be clarified. If that is clarified in unequivocal, clear and unambiguous terms, as held above, then, we do not see how we can accept the argument that the impugned trade notice amends the Notification. It does not do a....
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....f Government of India and the implementation of the notification is ensured by the Customs Authorities. It has been further stated that the respondents by themselves generally do not make or change a policy on this subject, without an order of the Central Government. He further contended that para 1.02 of Foreign Trade Policy, 2015-2020 prescribes that "Central Government, in exercise of powers conferred by Section 5 of FT (D&R) Act, 1992, as amended from time to time, reserves the right to make any amendment to the FTP, by means of notification, in public interest" and the amended Section 5 of the FT (D&R) Act, 1992 prescribes that "The Central Government may from time to time formulate and announce by notification in the official Gazette the export and import policy and may also in the like manner amend that policy". 42-It has been further contended that the appointment and powers of DGFT is defined in Section 6 of the FT (D&R) Act, 1992 and the same reads as under:- "Appointment of Director General and his functions: (a)The Central Government may appoint any person to be the Director General of Foreign Trade for the purpose of this Act. (b)The Direc....
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....on reads as under:- "Government of India Ministry of Commerce & Industry Department of Commerce Udyog Bhawan, New Delhi Notification No.32/2015-202 Dated the 30 August, 2018 Subject:-Amendment in the import policy of Peas under Chapter 7 of the ITC (HS) 2017, Schedule-I (Import Policy). S. O. (E): In exercise of powers conferred by Section 3 of FT (D&R) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2015-202, as amended from time to time, the Central Government hereby, make the following amendment in ITC (HS) 2017, Schedule I (Import Policy): Import of Peas classified under Exim Code 0713 10 00 (including Yellow Peas, Green Peas, Dun Peas and Kaspa Peas) is "Restricted" till 30.09.2018. Effect of this Notification: Import of Peas classified under Exim Code 0713 10 00 including 'Yellow peas, Green peas, Dun peas and Kaspa peas) is "Restricted" till 30.09.2018. This issues with the approval of the Commerce and Industry Minister. (ALOK VARDHAN CHATRUVEDI) Director General of Foreign Trade & Ex-Officio Additional Secretary to the Government of India Email : [email protected]" 46-The Divisio....
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....cordingly Then, sub-section (4) says that without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export of any goods, nor any goods shall be prohibited for import or export except, as may be required under this Act or rules or orders made thereunder. Thus, by subsection (2) of section 3, there is a power conferred in the Central Government to publish an order making prohibition or prohibiting or otherwise regulating the import or export of goods or services or technology. This can be subject to exceptions. 35. Section 4 continues the existing orders made under the Imports and Exports (Control) Act, 1947, which is an Act repealed by section 20 of the FTDR Act. Section 5 provides for formulating and pronouncing FTP. If it is formulated and announced by a Notification in the Official Gazette, it can also be amended by the Central Government. In the instant case, what we have on record is the FTP of 2015-2020. The relevant para of this is contained in Chapter 1A titled as Legal Framework And Trade Facilitation. Clause 1.00 provides for legal basis of foreign trade policy (FTP) and....
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....rt or import is made within the original validity period of an irrevocable commercial letter of credit, established before the date of imposition of such restriction and it shall be restricted to the balance value and quantity available and time period of such irrevocable letter of credit. For operationalising such irrevocable letter of credit, the applicant shall have to register the Letter of Credit with jurisdictional Regional Authority (RA) against computerized receipt within 15 days of the imposition of any such restriction or regulation. 37. It is, therefore, very apparent that it is the FTP vide its paras, which is stipulating certain measures and when there is any restriction placed on the imports, which are otherwise stated to be free. "Unless otherwise stipulated" are the words and expressions appearing in clause (b) of para 1.05, which would enable us to understand that it is not because there is a blanket provision made in para 1.05 that the restriction or regulation notwithstanding the export or import will ordinarily be permitted. If there is a stipulation otherwise, then, these wide or general words will not be of any assistance. As far as the subje....
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....will be understood as complying with the Policy Condition 4. That would be taken as quantity already imported from 1st April, 2018 to 25th April, 2018. 38. One could not have, therefore, found any fault nor any confusion is resulting from this clear wording. No doubts should be entertained by the Regional Authorities. However, we leave the matter at that and possibly some vested interests have been able to persuade the Regional Authorities to seek a clarification resulting in issuance of a circular dated 9th May, 2018. That circular refers to Notification No. 4 dated 25th April, 2018 and para 2 of this trade notice refers to the Policy Condition No. 4. Para 3 of the same enables assessing the remaining balance. With regard to that, importers who have already contracted the import of peas before the date of issuance of the Notification and have paid any advance (full or part) for the same or have furnished irrevocable commercial letters of credit, before 25th April, 2018, were allowed to forward documents indicating the quantity contracted and the amount paid so as to enable the DGFT to lay down further procedure. We do not see how from this paragraph any benefit c....
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....d the import is restricted, also specifies the period. The period is 1st April, 2018 to 30th June, 2018. The total quantity is one lakh metric ton of yellow peas. There was a quantity already imported from 1st April, 2018 to 25th April, 2018, which is the date of issuance of the Notification. How that quantity, which is already imported, has to be dealt with is provided in this policy condition and because that condition employs the words "already imported", the ambit and scope of these words and expression had to be clarified. If that is clarified in unequivocal, clear and unambiguous terms, as held above, then, we do not see how we can accept the argument that the impugned trade notice amends the Notification. It does not do anything of that kind, but removes the confusion in the minds of the Regional Authorities. It is not that there was confusion throughout, but some Regional Authorities entertained doubts. Else, the trade has clearly understood that condition. If there is a ICLC, then, the shipments backed by such ICLC and already imported between 1st April, 2018 to 25th April, 2018 would be registered under the jurisdictional Regional Authorities as per paragraph 1.05 of the ....
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....as held that these Notifications override the circular. Therefore, 50% of the aggregate Customs duty on the goods cleared to the domestic tariff area would not mean that the payment of the tax has been made. The circular was issued on the basis of representation of the assessees and thus, the Notification could not have, therefore, stood in the way of the assessee. On the other hand, it was argued that the Notification is statutorily issued and that has overriding effect by virtue of the power conferred by sub-section (1) of section 5A of the Central Excise and Salt Act, 1944. The issue has been examined in several cases by the Hon'ble Supreme Court and the settled principle was reiterated that a circular cannot take away the effect of the Notification statutorily issued. This principle is also not applicable in the facts and circumstances of the present case. 42. In the end, we must refer to the orders passed by the High Court of Rajasthan and the High Court of Gujarat. These are but interim orders. We have taken a final view of the matter. At best, these interim orders, which are tentative and, prima facie, have a persuasive value. They have no binding effect. ....
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....ected right by a law to be constitutionally permissible. According to Aharon Barak (former Chief Justice, Supreme Court of Israel), there are four sub-components of proportionality which need to be satisfied[13], a limitation of a constitutional right will be constitutionally permissible if: (i) it is designated for a proper purpose; (ii) the measures undertaken to effectuate such a limitation are rationally connected to the fulfillment of that purpose; (iii) the measures undertaken are necessary in that there are no alternative measures that may similarly achieve that same purpose with a lesser degree of limitation; and finally (iv) there needs to be a proper relation ('proportionality stricto sensu' or 'balancing') between the importance of achieving the proper purpose and the social importance of preventing the limitation on the constitutional right." In the aforesaid case the apex Court has dealt with the theory of proportionality and restriction, scope of Article 19(6) of the Constitution of India and in light of the aforesaid keeping in view the plight of the Indian farmers and other factors, this Court is of the opinion ....
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.... 60. Another significant feature which can be noticed from the reading of the aforesaid clause is that the State is empowered to make any law relating to the professional or technical qualifications necessary for practising any profession or carrying on anyoccupation or trade or business. Thus, while examining as to whether the impugned provisions of the statute and rules amount to reasonable restrictions and are brought out in the interest of the general public, the exercise that is required to be undertaken is the balancing of fundamental right to carry on occupation on the one hand and the restrictions imposed on the other hand. This is what is known as "doctrine of proportionality". Jurisprudentially, "proportionality" can be defined as the set of rules determining the necessary and sufficient conditions for limitation of a constitutionally protected right by a law to be constitutionally permissible. According to Aharon Barak (former Chief Justice, Supreme Court of Israel), there are four sub- omponents of proportionality whichneed to be satisfied [ Aharon Barak, Proportionality: Constitutional Rights and Their Limitation(Cambridge University Press 2012).], a limitation of a ....
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.... and at the same time empowers the State to impose reasonable restrictions on those freedoms in public interest. This notion accepts the modern constitutional theory that the constitutional rights are related. This relativity means that a constitutional licence to limit those rights is granted where such a limitation will be justified to protect public interest or the rights of others. This phenomenon of both the right and its limitation in the Constitution-exemplifies the inherent tension between democracy's two fundamental elements. On the one hand is the right's element, which constitutes a fundamental component of substantive democracy; on the other hand is the people element, limiting those very rights through their representatives. These two constitute a fundamental component of the notion of democracy, though this time in its formal aspect. How can this tension be resolved? The answer is that this tension is not resolved by eliminating the "losing" facet from the Constitution. Rather, the tension is resolved by way of a proper balancing of the competing principles. This is one of the expressions of the multi-faceted nature of democracy. Indeed, the inherent tension b....
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....tion ... Third, there must be a proportionality between the effects of the measures which are responsible for limiting the Charter right or freedom, and the objective which has been identified as of "sufficient importance". The more severe the deleterious effects of a measure, the more important the objective must be if the measure is to be reasonable and demonstrably justified in a free and democratic society." 64. The exercise which, therefore, is to be taken is to find out as to whether the limitation of constitutional rights is for a purpose that is reasonable and necessary in a democratic society and such an exercise involves the weighing up of competitive values, and ultimately an assessment based on proportionality i.e. balancing of different interests. 65. We may unhesitatingly remark that this doctrine of proportionality, explained hereinabove in brief, is enshrined in Article 19 itself when we read clause (1) along with clause (6) thereof. While defining as to what constitutes a reasonable restriction, this Court in a plethora of judgments has held that the expression "reasonable restriction" seeks to strike a balance between the freedom guaranteed by an....