Jsw Steel Limited & Anr Vs Union Of India & Ors (Delhi High Court)
High Court finds that transition provisions under Clause 1.05 of the Foreign Trade Policy do not apply to quantitative restrictions imposed pursuant to safeguard investigations (28 Mar)
On March 28, 2025, the Delhi High Court dismissed multiple petitions filed by importers and traders of Low Ash Metallurgical Coke (Met Coke), challenging DGFT Notification No. 44/2024-25 dated 26th December 2024. This notification, issued by the DGFT, imposed safeguard measures in the form of quantitative restrictions (QRs) on Met Coke imports, effective from 1st January 2025 to 30th June 2025.
This notification was issued under Sections 3, 5, and 9A of the Foreign Trade (Development and Regulation) Act, 1992, along with Clause 1.02 and 2.01 of the Foreign Trade Policy, 2023 (FTP). Prior to this, the import of Met Coke was under the “Free” category, meaning there were no restrictions. However, the notification changed the import policy from “Free” to “Restricted” category and imposed specific import quotas for each country for the period from 1st January 2025 to 30th June 2025.
Petitioners mainly argued that they had executed contracts with the Indonesian exporters and consequently opened Irrevocable Commercial Letters of Credit (‘ICLCs’) prior to the date of said Notification. They relied heavily on benefit of ‘Transitional Arrangement’ under Clause 1.05(b) of the FTP, which provides that if an import policy changes from “free” to “restricted,” imports tied to ICLCs opened before the restriction should still be allowed, provided the ICLCs are registered within 15 days of the restriction. Relevant extracts from Clause 1.05 of FTP are reproduced below:
“In case of change of policy from ‘free’ to ‘restricted/prohibited/state trading’ or ‘otherwise regulated’, the import/export already made before the date of such regulation/restriction will not be affected. However, the import through High Sea sales will not be covered under this facility. Further, the import/export on or after the date of such regulation/restriction will be allowed for importer/exporter who 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 of 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.”
In pursuant to the condition set out in above Clause 1.05, the importers and traders had applied for ICLC registration with the concerned Regional Authority under Clause 1.05(b), claiming eligibility under the transitional arrangement. However, such applications were rejected by the DGFT with reasoned orders. The rejections of such application are also under challenge.
