TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 318
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....itioners have also challenged the Notification dated 27.12.2017 (Annexure-P to the petition) and seek a declaration that defining "Animal Feed" in the Definition clause of Schedule-VII of the Plant Quarantine Order (Regulation Of Import Into India), 2003 (hereinafter referred to as "the Plant Quarantine Order") is bad in law and arbitrary. 3. The facts briefly stated are that the petitioner, in its routine course of business and being a regular importer/trader of agricultural products and related activities, imported a consignment of "Grain De Cotton" (Cotton Seeds) for cattle feed consumption from Benin, Africa. These imports were a part of contracts signed between the parties for import of 10,000 metric tonnes of cotton seeds by the petitioner from the Benin Supplier - Sunshine Global. 4. The Bill of Entry was filed at Mundra Customs with all relevant documents to support the same since the item is freely importable under the EXIM policy of India and the Customs Tariff Act, without any legal restrictions. The import of goods was also supported with the Phytosanitary Condition Satisfied Certificate from the exporting country along with the fumigation clearance. The Customs, Mund....
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....ing permitted on such documents, the petitioner and some parties, whose similar consignments were so held up, filed writ petitions before this court. 7. By an order dated 18.09.2017, this court, initially, directed the petitioner to file a representation to the Parent Department and Office of the respondent No.2 - Plant Protection Advisor. On 20.09.2017, the petitioner filed a representation with several details and RTI replies, etc. showing that the objection of the Plant Quarantine Department is entirely bad in law. The petitioner also sought a personal hearing. However, nothing was done by the respondent Department and ultimately, the representation came to be rejected. Thereafter, the petitioner and others approached this court by filing further writ petitions. 8. On 27.12.2017 the Plant Quarantine Office issued a notification that henceforth, "Animal Feed" means only items in crushed-kibbled seeds/pellet/dried cake form, without effecting any corresponding change in the Customs Tariff Act or the EXIM policy or issuing any notification thereunder. By a judgment and order dated 30.01.2018, this court disposed of the petition by directing the respondents to clear the goods for ....
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....are imported as "animal feed". It was submitted that the Customs Tariff Act continues to permit import of cattle feed freely so is the case under the EXIM policy. Thus, by the impugned action, the Plant Quarantine Department is indirectly trying to override and tread over the jurisdiction of the authorities under the Customs Act and is trying to negate the provisions of the EXIM Policy by stating that the product cannot be imported within the country. It was submitted that restricting the import of cotton grain without effecting any change in these provisions and defining this product under the Plant Quarantine Order, merely by issuing a notification changing the definition of "animal feed", the import of which, otherwise is not restricted, is not permissible. It was submitted that there is no applicability of the Plant Quarantine Order in this case in any manner as cotton seeds for cattle feed consumption are not defined as a "restricted commodity" under the Plant Quarantine Order and the Schedule thereunder. 11.1 Reference was made to the Destructive Insects and Pests Act, 1914 (hereinafter referred to as "the DI&P Act") to submit that the same does not confer any right upon the....
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....at admittedly, in case of the petitioner, cotton seeds are being imported as cotton grains for consumption purpose and not for any sowing purpose, since they cannot be used for sowing as they have failed all germination tests so far. The exporting country has also certified that these "grain de cotton" for cattle feed consumption is incapable of any sowing purpose since it does not have the required strength and germination quality, which is very high in cotton. It was contended that the impugned notification has been issued in colourable exercise of power as the notification has been issued during the pendency of the earlier petition. 11.4 It was further submitted that the amendment of the definition of "animal feed" is de hors the EXIM Policy and the Customs Tariff Act, which continues to allow the import of cotton grain and other products, as provided under Chapter-XII therein. According to the learned advocate, the impugned notification has been issued in colourable exercise of powers only at the whims of the Ministry of Agriculture based on misconceptions and misapprehensions. It was submitted that by adding the definitions of "grain" and "seeds" under the Plant Quarantine Or....
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.... to impose further conditions on import of "cotton seed for consumption" as grains, as is done for all other commodities like coriander, sesame, sunflower, rabi and many other seeds. Hence, to ensure that these seeds are not being used for sowing, checks and tests could be undertaken, instead of expressing mere doubts and apprehensions that they may be used for sowing. It was submitted that additional checks and balances can be prescribed for import of cotton grains as "animal feed" in the form of whole grains so that they are not consumed for any other purpose. It was, accordingly, urged that the impugned notification defining "animal feed" deserves to be quashed and set aside and the petition deserves to be allowed by granting the reliefs as prayed for. 12. Opposing the petition, Mr. Nirzar Desai, learned senior standing counsel for the respondents, invited the attention of the court to the findings recorded by this court in Special Civil Application No.22428 of 2017 in the earlier round of litigation. It was submitted that the DI&P Act empowers the Union of India to issue notification in the Gazette of India in public interest for imposing restrictions for the import into India....
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.... and hence, the importer has the legitimate right to ask the exporter to supply kibbled/crushed and non viable animal feed, as defined under the impugned notification, instead of forcing the Government to allow import of cotton seeds as animal feed. 12.4 It was submitted that the impugned notification providing for a definition of "animal feed" is a policy decision taken by the Ministry of Agriculture in the larger public interest and, therefore, this court, in exercise of powers under article 226 of the Constitution, may not interfere with the wisdom of the authorities in framing such policy decision. In support of such submission, the learned senior standing counsel placed reliance upon the decision of the Supreme Court in State of T.N. and another v. P. Krishnamurthy and others, (2006) 4 SCC 517, wherein the court held thus: "15. There is a presumption in favour of constitutionality or validity of a subordinate legislation and the burden is upon him who attacks it to show that it is invalid. It is also well recognized that a subordinate legislation can be challenged under any of the following grounds: (a) Lack of legislative competence to make the subordinate legislation. ....
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....the form of pellet or dried cake and the added requirements are more in the nature of conditions imposed for the import of any substance as animal feed. The court observed that such conditions cannot be seen as clarificatory in nature and only on this basis, it would not be open for the Ministry of Agriculture to prevent the import of the consignment. However, keeping in mind the anxiety of the Ministry of Agriculture as well as the concerns of environmental damage or the spread of unknown diseases to plant and animal species, the court, with a view to balance equities, directed that the respondent No.2 therein shall have the samples of consignment tested through Government or Government recognized laboratory for the purpose of germination and if it is found that the rate of germination is so low that the seeds are incapable of being used for sowing, this condition shall stand fulfilled. The court further directed that the petitioner shall file an undertaking before this court that the goods would not be sold to the ultimate consumer before being crushed or kibbled or converted into cake form. The court observed that such an agreement will be entered into with the local purchasers ....
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.... Central Government has made the Plant Quarantine (Regulation of Import into India) (Tenth Amendment) Order, 2017. The part of the order which is relevant for the present purpose is extracted hereunder:- "2. In Chapter I of Plant Quarantine (Regulation of Import into India) Order, 2003, under the existing entries relating to clause 2 under the heading 'Definitions' after serial number 'xxxiv' the following entries shall be inserted, namely:- (xxxv) Animal Feed - Kibbled-crushed seeds/ pellets/ dried cake form thereby denatured and free from weed seeds, bacterial and fungal pathogens." "5. Amendment of Schedule VII - In Schedule VII to the Plant Quarantine (Regulation of Import into India) Order, 2003: Against the existing serial numbers 19 and the entries relating thereto, respectively, the following entries shall be replaced namely:" 19. Animal Feed - Kibbled-crushed seeds/ pellets/ dried cake form thereby denatured and free from weed seeds, bacterial and fungal pathogens." 18. The Plant Quarantine Order has been made in exercise of powers under subsection (1) of section 3 of the DI&P Act. Subclause (vii) of clause (2) of the Plant Quarantine Order defines "grain" t....
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....ed in Schedule-V, VI or VII shall be accompanied by an original Phytosanitary Certificate issued by the authorised officer at the country of origin or a Phytosanitary Certificate for reexport issued by the country of re-export along with attested copy of Phytosanitary Certificate from the country of origin, as the case may be, with the additional declarations being free from pests mentioned under Schedule-V and VI of the Plant Quarantine Order or that the pests as specified do not occur in the country or state of origin. Sub-clause (4) of Clause 10 provides that the consignment of plant and planting material shall be imported subject to the conditions stipulated in Clause 3(4). 22. Thus, "animal feed", in terms of Entry No.19 of the Plant Quarantine Order, when imported, is required to be accompanied by a Phytosanitary Certificate issued by the country of origin. Subclause (xix) of Clause 2 of the Plant Quarantine Order defines "phytosanitary certificate" to mean a certificate issued in the model format prescribed under the International Plant Protection Convention of the Food and Agricultural Organization and issued by an authorized officer at the country of origin of consignment....
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.... hand, pertains to "animal feed", where conditions for importers understandably are less stringent. The court observed that if one compares Schedules V and VII, and in particular Entry No.19 of Schedule VII, the contentions of respondent No.2 therein that import of cotton seeds for any purpose other than for sowing is not permissible, cannot be accepted. The court held that cotton seeds imported for sowing would fall under Entry No.7 of Schedule V. If cotton seeds happen to be animal feed, the same would fall under Entry No.19 of Schedule VII. It was the case of the respondents that any grains, including cotton seeds, if are in kibbled-crushed/ broken form, would be considered as "animal feed" and as such, whole grain or any crop would not be considered as "animal feed" and therefore, is listed separately in the Plant Quarantine Order. The court found that cotton seeds for sowing purpose would fall under Schedule V, whereas cotton seeds meant for animal consumption would fall under Schedule VII. The court concluded that it is open for the importer to import cotton seeds for animal feed consumption by complying with the conditions contained in Schedule VII. The court further observe....
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....mage the entire crop and the bio-security will be exposed to such threats. 26. As regards the query as to how animal feed, which are imported, would impact plant/bio-security, it is stated that cotton is an economically important crop and introduction of the above devastating pests will lead to economic loss, directly affecting the livelihood of farmers and textile industry and shall also affect the export of cotton and hence, it is considered as a biological threat. Once the plant quarantine clearance is given, there is no way to trace the use of the commodity, whether they are used for consumption or sowing or crushed-kibbled or processed for any other purpose. Moreover, there are chances of whole seeds escaping during transportation/handling for the purpose of processing and the seeds can even be misused for sowing purposes, which is a grave threat. 27. Insofar as the object behind amending Entry No.19 of Schedule VII of the Plant Quarantine Order is concerned, a copy of the Draft Notification F.No.821/ 2017-PP. II was placed on record, which indicates that the intention behind introducing the definition of "animal feed" is that they have been receiving representations to elab....
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....osite to refer to the decision of the Supreme Court in Parisons Agrotech (P) Ltd. v. Union of India, (2015) 9 SCC 657, wherein the court has held thus: "14. No doubt, the writ court has adequate power of judicial review in respect of such decisions. However, once it is found that there is sufficient material for taking a particular policy decision, bringing it within the four corners of Article 14 of the Constitution, power of judicial review would not extend to determine the correctness of such a policy decision or to indulge into the exercise of finding out whether there could be more appropriate or better alternatives. Once we find that parameters of Article 14 are satisfied; there was due application of mind in arriving at the decision which is backed by cogent material; the decision is not arbitrary or irrational and; it is taken in public interest, the Court has to respect such a decision of the executive as the policy making is the domain of the executive and the decision in question has passed the test of the judicial review. 15. In Union of India v. Dinesh Engg. Corpn.,(2001) 8 SCC 491,this Court delineated the aforesaid principle of judicial review in the following m....
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....e expanding horizon of judicial review has taken in its fold the concept of social and economic justice. While exercise of powers by the legislature and executive is subject to judicial restraint, the only check on our own exercise of power is the self-imposed discipline of judicial restraint. 19. When a State action is challenged, the function of the court is to examine the action in accordance with law and to determine whether the legislature or the executive has acted within the powers and functions assigned under the Constitution and if not, the court must strike down the action. While doing so the court must remain within its self-imposed limits. The court sits in judgment on the action of a coordinate branch of the Government. While exercising power of judicial review of administrative action, the court is not an appellate authority. The Constitution does not permit the court to direct or advise the executive in matters of policy or to sermonise qua any matter which under the Constitution lies within the sphere of legislature or executive, provided these authorities do not transgress their constitutional limits or statutory powers." 17. The aforesaid doctrine of separat....
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....tions have to be examined by the Central Government from time to time and rules in regard to export and import suitably adjusted. It would, therefore, be idle to suggest that there should be unfettered and unrestricted freedom of export and import or that the policy of the Government in regard to export and import should be fixed and not changed according to the requirements of the country. ... 7. ... It was open to the Government, and indeed national interests made it their duty, to intervene and regulate the distribution of the commodity in a suitable manner." 31. According to us, we need not deal with these submissions elaborately as the aforesaid contention of the learned Senior Counsel for the appellants need to be discarded on an altogether different reason. These arguments ignore the crucial words appearing in sub-section (2) of Section 3, namely, the provision for prohibiting, restricting or otherwise regulating, the import or export of goods, etc. can be made "subject to such exceptions, if any, as may be made by or under the Order". These words are of wide amplitude giving necessary powers to make such exceptions as the Central Government deems fit while issuing the....