Subject Matter : Import and Export Policy.
Relevant Section : Section 3: The Central Government has power to make provisions for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases for the development and regulation of foreign trade by facilitating imports and increasing exports.
Section 4: All Orders made under the Imports and Exports (Control) Act, 1947, and in force immediately before the commencement of this Act shall, if they are not inconsistent with the provisions of this Act, continue to be in force and shall be deemed to have been made under this Act.
Section 5: The Central Government may, from time to time, formulate, announce and amend, by notification in the Official Gazette, the foreign trade policy.
Key Issue : a) Whether the power to make provisions relating to import and export also includes power to modify such provisions?
b) Whether the Circular dated 21st January, 2009 is illegal on the ground that it is contrary to the Foreign Trade Policy 2004-2009?
Citation Details : Nola Ram Dulichand Dal Mills and Ors. vs. Union of India (UOI) and Ors. (14.02.2020 - SC): MANU/SC/0185/2020
Summary Judgment :

Facts: The present case pertains to "Vishesh Krishi Upaj Yojna" for giving incentives to promote export of fruits, vegetables, flowers, minor forest produce, dairy, poultry and their value added products. In the Scheme notified for the year 2005-06, few exports were not to be taken into account for duty credit entitlement. The Appellant has sought quashing of the Circular, on the ground that it is contrary to the Policy notified on 7th April, 2006. The Scheme has been notified under the Act, therefore, such Scheme has a statutory force which cannot be amended or modified by the Executive issuing the impugned Circular. The Revenue has drawn distinction between the two Schemes notified on the same day, which shows that the Revenue has treated two Schemes differently, therefore, exports other than by units in SEZ and EUO units are entitled to benefit of exports. The benefit of exports is not available if the exports are made by EOU or units situated in SEZ Units. It is contended that only exports by these units are not entitled to incentive whereas the Appellants are not part of either EOU or SEZ Unit as the expression used is exports made 'by' EOU and SEZ Unit and not 'through' them.

Held: a) The court held that Section 5 of the Act empowers the Central Government to formulate and announce Foreign Trade Policy and may also amend it. The Circular dated 21st January, 2009 does not modify or amend the Scheme notified for the year 2006-07. It only clarifies that 100% export-oriented units which are not entitled to seek exemption cannot avail benefit indirectly through the purchasers from them. It is modification or amendment of the Scheme which is required to be carried out by publication in the official gazette but not the clarifications to remove ambiguity in the existing Scheme.
b) Since the Government has reserved right in public interest in terms of the Scheme notified under the Act, therefore, the Circular dated 21st January, 2009 cannot be said to be illegal in any manner. The purpose of the Scheme is that 100% Export Oriented Units or units situated in Special Economic Zone are not to be granted incentives. The purpose and object of the Scheme notified cannot be defeated by granting incentives to units which exports through 100% Export Oriented Units. Since the Appellant is a purchaser from 100% export-oriented unit, therefore, the medium of the Appellant cannot be used to avoid the intended purport of the policy for the year 2006-07. It was held that the export-oriented units cannot use the Appellant for export under the Scheme and to claim benefit of export when it is not permissible for them directly.

Subject Matter : Suspension and cancellation of Importer- Exporter Code.
Relevant Section : Section 8: Importer-exporter Code Number will be suspended or cancelled when a person has contravened any of the provisions of this Act or has committed any other economic offence under any other law for the time being in force.
Section 11(2): When any person makes or abets or attempts to make any export or import in contravention of any provision of this Act he shall be liable to a penalty .
Key Issue : Whether imposing a penalty on a high seas seller for abetment of import in violation of the FTDR Act arises when the person who imported the goods in question is not guilty of any willful concealment/importation of offending goods?
Citation Details : Rashmi Jain vs. Additional Director General of Foreign Trade (14.10.2014 - DELHC): MANU/DE/2605/2014
Summary Judgment :

Facts: The late husband of the petitioner was in the business of import of metal scrap under the name M/s. Balaji Impex. Sometime in October 2004, Balaji placed an order for supply of Heavy Melting Scrap from M/s. Sun Metal Casting LLC, UAE. Pursuant to the said order, HMS was supplied, enclosed with an invoice. The said consignment was accompanied by a no-war material certificate and a pre-shipment Inspection Certificate certifying that the said consignment was free from any explosive materials. The said consignment was sold by Balaji to M/s. S.G Steels Pvt. Ltd., Uttaranchal on high seas. After the customs authorities had examined the consignment, some used and rusted empty cartridges/shells were found in some of the containers. The entire goods/consignment was confiscated by the Commissioner of Customs, New Delhi and a penalty was imposed on SGS as well as Balaji. Whereas penalty on SGS was waived off when appeal of Balaji was still pending the respondent initiated proceedings for collection of penalty from Balaji on charges of abetment of import of goods in contravention of the provisions of the FTDR Act.

Held: The impugned order specifically alleges that Balaji had "misdeclared the description of goods in the import documents for HMS but have imported objectionable items of war materials and sold to the final importer in a clandestine manner with an intention to smuggle the same into India". Undisputedly, this allegation cannot be sustained. In the first instance, Balaji had not imported any objectionable items into India. Further, the intention to smuggle the said items cannot be ascribed to Balaji as Balaji was not the beneficiary of the import of the goods in question in India. It is implicit in an allegation of abetting an offence that another person is guilty of that offence which is alleged to have been abetted. In this case, SGS would have been the offender as well as a beneficiary of the import of goods into India. It has already been held that the person who imported the goods in question is not guilty of any willful concealment/importation of offending goods, the question of imposing a penalty on a high seas seller for abetment of import in violation of the FTDR Act does not arise. Also balaji relied on certification by Moody as it is an authorized agency listed in appendix 5 to the handbook of procedures. The petitioners, thus, proceeded on the basis that Moody International (Iran) which is an affiliate of Moody International (India) Pvt. Ltd. would also be accredited for certification purposes.

Subject Matter : Adjudicating authority.
Relevant Section : Section 13: The Director General can impose any penalty or any confiscation may be adjudged under this Act by the Director General;
by such other officer as the Central Government may, by notification in the Official Gazette, authorise in this behalf.
Key Issue : Whether the show cause notice for imposition of fine and confiscation of goods was valid even beyond limitation period?
Citation Details : Kothari Foods and Fragrance Pvt. Ltd. vs. Commissioner of Customs (Export), New Delhi (27.09.2019 - CESTAT - Delhi): MANU/CE/0315/2019
Summary Judgment :

Facts: A show cause notice was served upon the Appellant observing the contravention on part of Appellant exporter for the provisions which stated that the exporters to disclose technical characteristics, quality and specifications of the essential oil said to have been used in manufacture of Paan Masala/ Gutka in their shipping bills at the time of export and thereafter while applying for the duty free import authorisation under Foreign trade policy 2004-09. The confiscation of goods & the imposition of penalty upon the Appellant was proposed accordingly. The appellant contended before the HC that the declaration requirement of the exception notification is applicable only if the exported goods are included in the list of items and that the show cause notice is served beyond limitation period but it was not accepted by the Hon'ble High court.

Held: It was held that although the show cause notice, issued by Lucknow DGFT is in the accordance of Section 13 of the FTD & R Act 1992, yet in the present case it has been issued after a period of expiry of two years. But the show cause notice itself has alleged the suppression of facts on part of the exporter. The non disclosure of the technical characteristics as a consciously done act of the exporter. It also hled that the said DFIAs were obtained by suppression of facts and utilized for the purpose for which they were not used. Hence, the department has committed no error by invoking the extended period of limitation.

Subject Matter : Powers of Adjudicating and other authority.
Relevant Section : Section 17: Every authority making any adjudication or hearing any appeal or exercising any powers of Review under this Act shall have all the powers of a civil court under the Code of Civil Procedure, 1908, while trying a suit.
Section 17(4): Clerical or arithmetical mistakes in any decision or order or errors arising therein from any accidental slip or omission may at any time be corrected by the authority by which the decision or order was made, either on its own motion or on the application of any of the parties.
Key Issue : Whether the show cause notice for imposition of fine and confiscation of goods was valid?
Citation Details : Tegs Masrado Pvt. Limited vs. Commissioner of Central Excise and ST, Chandigarh (09.01.2018 - CESTAT - Chandigarh): MANU/CJ/0007/2018
Summary Judgment :

Facts: The brief facts of the case are that the appellant is a 100% EOU engaged in the manufacture of canned mushrooms. They were registered and imported capital goods and raw materials and also procured certain capital goods and raw materials indigenously free of duty. The department issued the show cause notice proposing confiscation of the imported capital goods, raw materials, indigenous capital goods and raw materials besides the duty demand on the ground that the appellant have not fulfilled the export obligation. The appellant contested against it. However, after due process of law, the Commissioner has confirmed the demands and imposed penalties. Thereafter, the show cause notice was issued to the appellant by Development Commissioner. The said show cause notice was adjudicated and the charges levelled in the show cause notice were dropped against the appellant. Thereafter, the application for rectification of mistake was filed against the order of this Tribunal and the same was dismissed by this Tribunal being without any merits. Thereafter, another show cause notice was issued by the Development Commissioner to the appellant.

Held: It was held that the present show cause notice issued is not merely to correct the clerical or arithmetical mistake in the decision but on account of the new facts of enhanced import brought to the notice subsequent to the original order passed. Therefore, it cannot review the order passed by the then Development Commissioner in absence of power of review conferred upon it under the FTDR Act and under Section 17(4) of the FTDR Act. Therefore, the proceedings against the appellant are not sustainable.

Subject Matter : Application of other laws not barred.
Relevant Section : Section 18A: The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force.
Key Issue : Whether application of other law is barred?
Citation Details : Commissioner of Customs vs. Atul Automations Pvt. Ltd. and Ors. (24.01.2019 - SC): MANU/SC/0067/2019
Summary Judgment :

Facts: The Respondents during 2016 imported certain consignments of Multi-Function Devices. Commissioner of Customs held that, imports were in violation of Foreign Trade Policy framed under the Act, 1992 and Hazardous and Other Wastes Rules, 2016. So, a redemption fine was imposed and consignment released for re-export only. In appeal before the Tribunal, it held that, MFDs did not constitute "waste" under the Rules and had a utility life of 5 to 7 years, as certified by Chartered Engineer. Therefore, Release of consignment was directed. In appeal preferred by Revenue, High Court held that, MFDs correctly fell in category of "other wastes" under Waste Management Rules dealing with used Multi-Function Printer and Copying Machines. After taking into consideration provisions of the Act and Foreign Trade Policy framed thereunder, it was held that, MFDs were not prohibited but restricted items for import. Order for release of goods was upheld subject to execution of a simple bond without sureties for 90% of enhanced assessed value, with further liberty to Director General of Foreign Trade, along with directions.

Held: It was held that the Central Government had permitted import of used MFDs with utility for at least five years keeping in mind that, they were not being manufactured in country. Rule 15 of Waste Management Rules dealing with illegal traffic, provided that import of "other wastes" shall be deemed illegal if it was without permission from Central Government under Rules and was required to be re-exported. Significantly the Customs Act does not provide for re-export. Central Government under Foreign Trade Policy had not prohibited but restricted import subject to authorisation. High Court therefore rightly held that, MFDs having a utility period, Extended Producer Responsibility would arise only after utility period was over. Therefore, there was no error in direction to Respondents for deposit of bond without sureties for 90% of enhanced valuation of goods leaving it to DGFT to decide whether confiscation needed to be ordered or release be granted on redemption at market value, in which event Respondents shall be entitled to set off.