TaxTMI 
TaxTMI 
2021 (4) TMI 367
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....9029721 dated 02.10.2020, (ii) 9028987 dated 02.10.2020, (iii) 9028862 dated 02.10.2020, (iv) 8845847 dated 17.09.2020, (v) 8843086 dated 17.09.2020, (vi) 8842485 dated 17.09.2020, (vii) 8985829 dated 29.09.2020, (viii) 8987173 dated 29.09.2020, (ix) 8982222 dated 28.09.2020, (x) 8994149 dated 29.09.2020, (xi) 9008104 dated 02.10.2020, (xii) 9029328 dated 02.10.2020, and (xiii) 9029262 dated 02.10.2020 for home consumption (hereinafter referred to as "the bills of entry") which have been held up inspite of having valid registration of Advance Payment Certifcate bearing File No.03/27/008/ 00161/AM18 dated 06.09.2017 and issued on 27.09.2017 by the ofce of the respondent No.5 i.e. the Director General of Foreign Trade (hereinafter referred to as "the DGFT") permitting import of Pigeon Peas under the Foreign Trade Policy 2015-2020 (hereinafter referred to as "the FTP"). 3. Before we advert to the submissions made by learned counsel for the respective parties, it will be apposite to briefy refer to the relevant facts as pleaded for adjudication of the lis. 3.1. Petitioner is a company incorporated under the Companies Act, 2013 and engaged in the business of import and export of a....
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....import of Pigeon Peas from Sudan; however subsequently by amendment sheet No.01 dated 02.11.2017, petitioner was permitted to import Pigeon Peas from Malawi, Myanmar, Mozambique and Tanzania. 3.5. DGFT issued 5 RCs to the petitioner against the trade notice dated 31.08.2017. Petitioner imported Pigeon Peas against 4 RCs to the extent of 11000 MTs by 2018. Import against the 5th RC in respect of balance 11000 MTs was to be completed between 2018 to 2020. 3.6. In view petitioner's contractual obligations shipment was to reach India between February and March 2020 but due to Covid - 19 pandemic and the resultant lockdown enforced by many countries there was delay and the shipment of Pigeon Peas arrived in the month of September 2020. Initially petitioner fled 3 bills of entry bearing Nos. (i) 8845847 dated 17.09.2020, (ii) 8843086 dated 17.09.2020 and (iii) 8842485 dated 17.09.2020 seeking clearance of Pigeon Peas for home consumption. 3.7. Petitioner's shipment was not cleared for home consumption by respondent Nos.2 & 3 as a result of which petitioner incurred demurrage / detention charges due to delay in clearance. Petitioner therefore addressed letter dated 22.....
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....d the petitioner's request for conversion of the 13 bills of entry from home consumption to warehousing. 3.12. Being aggrieved by the non-clearance of the shipment of approximately 2650 MT of Pigeon Peas imported vide RC dated 06.09.2017 under the 13 bills of entry, petitioner has approached this Court by the present petition seeking the relief(s) as indicated above. 4. Mr. Vineet Naik, learned senior counsel appearing on behalf of the petitioner, at the outset has informed that the tenure of the FTP 2015-2020 now stands extended till 31.03.2021 vide notifcation dated 31.03.2020. He submitted that import against 4 RCs was completed by the petitioner in 2018, whereas import against the 5th RC was to be completed between 2018 to 2020; import was thus continuous from the date of issuance of the RCs to the petitioner; RC dated 06.09.2017 issued to the petitioner was without specifying any validity period or date of shipment but categorically stated that the RC would remain valid till the entire quantity is imported; petitioner extended the contract mutually with its foreign supplier from time to time, intimation of which was given to the DGFT at all times; petitioner's RC....
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....ued only to protect the importers who had already entered into contracts with advance payment prior to 05.08.2017 and relaxation was provided beyond the quota but the same was to be completed during the fscal year 2017-18 and could not be extended indefnitely by entering into addendums; thus in the absence of any validity endorsed on the RC issued to the petitioner, the quantity, value and shipment period in the contract as on the date of registration has to be treated as a limiting factor; contention of the petitioner that the FTP permitted import under the RC for the entire duration of FTP is erroneous as trade notice dated 31.08.2017 allowed for registration of contracts as per the terms of the contract as on the date of its registration with the balance value, quantity and shipment period available in the contract as the limiting factor; the relaxation provided was only to alleviate the immediate sufering of the importers and could not be mis-utilized by extending the relaxation beyond the fscal year 2017-18; petitioner while applying for amendment in the RC for adding country of origin did not mention that its contract was extended till 28.09.2020; the RC issued to the petitio....
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....dated 05.08.2017 read with the two trade notices dated 11.08.2017 and 31.08.2017; reliance was placed on the clarifcation issued by the Deputy Director of General of Foreign Trade vide letter dated 24.12.2020 to the Commissioner of Customs, Nhava Sheva, inter alia, clarifying that in the case of the petitioner, validity of the RC was only for the fscal year 2017-18 as the provision for registering RCs was made with reference to notifcation No.19/2015-2020 dated 05.08.2017 and the date of expiry is the date of lapse of notifcation i.e. 31.03.2018. He therefore prayed for dismissal of the petition on the basis of the above submissions. 6. Mr. Pradeep Jetly, learned senior counsel appearing on behalf of respondent Nos.1 to 3 in his reply, at the outset adopted the submissions made on behalf of respondent Nos.4 to 6 and has drawn our attention to the afdavit-in-reply dated 17.12.2020 fled by the Deputy Commissioner of Customs to contend that since the RC dated 06.09.2017 does not bear any validity or expiry clause, the matter was referred to the DGFT; extension of the original contract was never intimated by petitioner and the contract was never revalidated; therefore the petitioner....
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....ontend that the RC is valid only for the frst fscal year of the FTP. 8. Submissions made by the parties have received the due consideration of the Court. Materials on record have been perused. 9. Before we advert to the submissions made by the respective counsel, it would be apposite to consider the relevant provisions of the Foreign Trade Policy 2015-2020 as applicable in the present case. 9.1. Chapter 1 of the Foreign Trade Policy (2015-2020) deals with the legal framework and trade facilitation. The relevant provisions are extracted as under:- 1.00 Legal Basis of Foreign Trade Policy (FTP) The Foreign Trade Policy, 2015-20, (as updated) w.e.f. 05.12.2017 is notifed by Central Government, in exercise of powers conferred under Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992) [FT (D&R) Act], as amended. 1.01 Duration of FTP The Foreign Trade Policy (FTP), 2015-2020, (as updated) w.e.f. 05.12.2017 incorporating provisions relating to export and import of goods and services, shall come into force with efect from the date of notifcation and shall remain in force upto 31st March, 2020, unless otherwise spe....
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....ulation / restriction will be allowed for importer / exporter has a commitment through Irrevocable Commercial Letter of Credit (ICLC) before the date of imposition of such restriction / regulation and shall be limited to the balance quantity, value and period available in the ICLC. For operational listing such ICLC, the applicant shall have to register the ICLC with jurisdictional RA against computerized receipt within 15 days of imposition of any such restriction / regulation. Whenever, Government brings out a policy change of a particular item, the change will be applicable prospectively (from the date of Notifcation) unless otherwise provided for. 9.2. From the above it can be seen that paragraph No.1.01 of chapter 1 of the FTP states that the FTP shall come into force with efect from the date of notifcation and shall remain in force upto 31.03.2020, unless otherwise specifed as stated; the said policy now stands extended upto 31.03.2021. Paragraph No.1.05 relates to transitional arrangements and clause (b) thereof states that in case of change of policy from 'free' to restricted / prohibited / state trading or otherwise regulated, the import / export already made bef....
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....his Notifcation: Import Policy of Pigeon Peas (Cajanus Cajan) / Toor Dal under EXIM Codes 0713 60 00, 0713 90 10 and 0713 90 90 is revised from 'free to 'restricted'. sd/- (Alok Vardhan Chaturvedi) Director General of Foreign Trade E-mail : [email protected] [Issued from File No. M-5012/300/2002-PC 2(A)] 9.4. By the above notifcation amendment in the import policy of Pigeon Peas under chapter 7 of the Indian Trade Classifcation (HS) 2017 for the FTP is made specifcally in respect of import of Pigeon Peas whereby the import is changed from free to restricted category. A further condition is incorporated stating that import shall be subject to an annual (fscal year) quota of 2 lakh MT as per the procedure to be notifed. Condition No.2 states that import shall be subject to an annual quota of 2 lakh MT. From this it can be safely inferred that the import under the FTP is for the duration of the FTP and not for the fscal year 2017-2018. 9.5. Similarly trade notices No.13/2015-2020 dated 11.08.2017 and No.15/2015-2020 dated 31.08.2017 issued by the DGFT are also directly relevant to the present case and are extracted as under :- Government of India ....
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....bsequently registered with the jurisdictional F.As. as per provisions of Para 1.05 of the Foreign Trade Policy (2015-20). 3. Subsequently representations have been received indicating that some frms have entered in contracts prior to 5th August, 2017 for import of Pigeon Peas/Toor Dal with either (i) advance payment , (ii) some advance payment and rest amount payable in Cash against Documents (CAD), or (iii) 100% CAD. 4. The matter has been considered and the Director General of Foreign Trade, in exercise of powers under Para 2.58 of the Foreign Trade Policy (2015-20), by relaxing the provisions of Para 1.05, hereby allowed registration of such Contracts with the Regional Authorities of DGFT for import of Pigeon Peas (Cajanus Cajan) / Toor Dal, wherein advance payment had been made (full or in part) prior to 5.8.2017 and for which contract / purchase invoice and payment details certifed by the bank are available. 5. Further, in relaxation of the provision of time limit for registration of contracts, as in Para 1.05 of FTP, such contracts must be registered with the Jurisdictional Regional Authorities headed only by the Additional DGFTs, latest by 7th Sept....
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....e. Agricom International General Trading LLC for purchase of 22000 MT of Pigeon Peas. Petitioner vide letter dated 05.09.2017 applied for registration of contract for import of the entire quantity of 22000 MT under trade notice dated 31.08.2017. It is seen that the application dated 05.09.2017 was fled along with copy of application submitted online, copies of the fve contracts alongwith addendums, copies of swift messages from bank indicating remittance as per contracts and copy of bank certifcate issued by the bank under the category of advance payment being made prior to 05.08.2017. Respondent No.6 initially issued two RCs both dated 06.09.2017 permitting import of 11000 MTs of Pigeon Peas per certifcate. We have seen that both the RCs are identical except for the bold letter "E" in the second RC. 11. For the sake of convenience, one of the RCs dated 06.09.2017 issued by the Foreign Trade Development Ofcer in the ofce of respondent No.6 is extracted below for reference as under :- GOVERNMENT OF INDIA OFFICE OF THE ADDITIONAL DIRECTOR GENERAL OF FOREIGN TRADE Nishta Bhavan, 48, Vithaldas Thackersey Marg, Churchgate, Mumbai 20 Telephone No.(022) 22017716, 2203....
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....to the petitioner's case as the petitioner's contract was based on advance payment to the supplier and not on the basis of ICLC (Irrevocable Commercial Letter of Credit). Hence this submission of the respondents cannot be accepted. 12. Further it is seen that petitioner was permitted to import Pigeon Peas for the fscal years 2018-19 and 2019-20; this fact is clear on perusal of the shipments of the Pigeon Peas cleared for home consumption on 32 diferent occasions by respondent No.3 between 28.02.2018 to 25.07.2020. This data is placed on record in the additional afdavit dated 10.02.2021 fled by the petitioner at page Nos.165 to 167 of the paper book and is not denied or controverted by the respondents; it is also seen that respondents were duly informed by the petitioner about the extended period of shipment and the subsequent addendums with its foreign supplier and therefore the respondents' objection about the validity period of the RC being restricted to the fscal year 2017-18 cannot be accepted. It is pertinent to note that if any restriction with respect to prescribing limitation of time limit is required to be imposed on any import then the RC should have an en....
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....mportantly the addendums were informed to the DGFT; therefore contention of the respondents that the addendums are to be treated as a supplementary contract or fresh contract cannot arise as it is to be treated as part and parcel of the principal contract between the parties. On perusal of the notifcation dated 05.08.2017 it cannot be said that it imposed restriction to complete the import of goods only during the fscal year 2017-18; though there is a reference to the fscal year appearing in condition No.2 of the said notifcation as regards the quota of 2 lakh MT per annum; this reference is merely for the purposes of procedure to be notifed for such import in terms of para 2.08 of the FTP; however the subsequent trade notice dated 31.08.2017 which directly concerns the petitioner's case in hand does not mention its applicability to the fscal year 2017-2018 and categorically specifes its applicability to the contract under the FTP. 15. We may also note the contents of the clarifcatory email dated 29.10.2020 issued by the Deputy DGFT, Mumbai and addressed to the Deputy (PC-2) DGFT endorsing a copy to the Mumbai DGFT and Joint DGFT which supports the petitioner's case. For....
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....y by placing internal communication dated 24.12.2020 addressed by the Deputy DGFT to the respondent No.3 issuing clarifcation regarding validity of the FTP 2015-2020. This letter is extracted as under:- "No.M.5012/300/2012/PC-2 (AV) Vol/Part - VI/P-9396 Government of India Ministry of Commerce and Industry Department of Commerce Directorate General of Foreign Trade ........ Udyog Bhawan, New Delhgi Dated 24th December 2020 To The Ofce of the Commissioner of Customs (NS- 1)(Kind Attn.: Shri Anil K. Pundir, Asstt. Commissioner) Jawaharlal Nehru Custom House, Nhava Sheva Tal - Uran, District : Raigad MAHARASHTRA - 400 707. Subject : Verifcation of Irrevocable Letter of Credit / Advance Payment under para 1.05. of the FTP 2015-2020 - reg. Sir, I am directed to refer to the letter No.S/26- Misc-184/2011-12 GR. I & IA (Pt.III) dated 24.09.2020 on the subject cited above seeking following clarifcations from the O/o Addl. Director General of Foreign Trade, Mumbai : i. Whether the above said ILC / Advance payment dated 27.10.2017 is still valid ? ii. If yes, please furnish date of exp....
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....l of Foreign Trade and addressed to the Commissioner of Customs (Nhava Sheva-I) issuing clarifcations on the letter dated 24.09.2020. 3. Since this document is not on record and may have a bearing on the outcome of the adjudication, we grant liberty to learned counsel for the petitioner to bring it on record by way of an additional afdavit since the copy of the document was tendered in Court by Mr. Rodrigues; copy of which was also furnished to learned counsel for the petitioner. 4. We also grant liberty to the petitioner to make an averment in the said additional afdavit about the documents in the compilation sought to be relied upon by the petitioner. Let the additional afdavit be fled within two days. 5. In so far the preliminary objection raised by Mr. Rodrigues is concerned, certainly that will be considered by the Court but the Court intends to pass a composite order on preliminary objection as well as on merit. 6. Stand over to 12.02.2021." 19. If the aforesaid objection raised by respondent Nos.4 to 6 is to be countenanced, then there was no reason for the respondents to clear the 25 shipments of the petitioner after 31.03.2018, i.e. f....