Case Law Details

Case Name : Pam Agro Industries Vs Union of India (Gujarat High Court)
Appeal Number : R/Special Civil Application No. 14959 of 2019
Date of Judgement/Order : 19/03/2021
Related Assessment Year :

Pam Agro Industries Vs Union of India (Gujarat High Court)

It is not in dispute that the petitioners imported cashew kernel (broken) from Vietnamese suppliers for a price ranging from Rs. 151/- to Rs. 180 /- per kg in Indian currency which is the transaction value ordinarily required to be considered for levy of custom duty as per provision of section 14 of the Customs Act.

Vide Notification no. 53 (RE-2013)/2009-2014 dated 2nd December, 2013 minimum price for import of Cashew Kernel (brokens) and Cashew Kernel (wholes) is fixed to Rs. 288/- per Kg and Rs. 400/- per kg respectively.

On perusal of the above notification, it is clear that the same is issued under section 5 of the Foreign Trade Act read with paragraph no. 2.1 of the Foreign Trade Policy, 2009-2014, as amended from time to time by prescribing the minimum CIF value of cashew kernels under Chapter 8 of ITC (HS) 2012, Schedule 1 (Import Policy) per kilogram being Rs. 288/- for cashew kernel (broken) for HS Code 0801 32 10 and Rs. 400/- for cashew kernel (whole) for HS Code 0801 32 20. Since 2013, the MIP for two different categories of cashew kernels broken and whole are in existence.

The power to issue such notification by the Director General of Foreign Trade came up for consideration before the Calcutta High Court in case of Bimal Kumar Modi (supra), wherein the notification dated 13.5.2013 issued by DGFT fixing the CIF value of betel-nut (areca-nut ) was under challenge. The Calcutta High Court after considering the history and relevant provisions of the law, came to the conclusion that such notification cannot be sustained from whichever angle it is viewed and accordingly, the same was quashed and set aside. However, Madras High Court in case of S. Mira Commodities Pvt. Ltd (supra), considering the similar notification dated 4.6.2008 issued by the DGFT with regard to restricting the import of betel nuts valued at Rs.35/- or more per kg., held that the DGFT has no power to issue the notification under section 5 read with section 6(3) of the Foreign Trade Act on artificial basis. It was further held that no material data has been furnished for arriving at the figure of Rs. 35/- per kg of the
betel nuts imported when the market of betel nuts require 90% import and the free import policy has been evolved for such import and the said notification goes contrary to such policy.

DGFT has not exercised powers under section 3 of the Foreign Trade Act but has merely authenticated an order which relates to the DGFT in accordance with the authentication rules. Therefore, the contention raised by the petitioners that DGFT has no authority to issue such notification is not sustainable in view of above dictum of law.

With regard to the contention of the petitioners that the price fixed by the DGFT in the year 2013 did not vary and therefore, the same is without any rationale, it is emerging from the facts that the petitioner having accepted such price for two of the bill of entries being bill of entry nos. 3673973 and 3715746 and custom duty being paid accordingly, the petitioner now cannot say that such price fixed by the impugned notification is without any rationale. The petitioners have raised such contentions only with a view to see that proper adjudication is not done by the authority for levy of duty on the differential price as per the notification no. 53 and the price at which the petitioner imported the goods. The notification no. 53 dated 2.12.2013 is similar to what is challenged before this Court as well as before the Madras High Court and the Calcutta High Court and all the High Courts have considered the contentions raised by the petitioners with regard to the provisions of the Customs Act, Foreign Trade Act as well as the provisions of Foreign Trade Policy.

Therefore, in view of the provisions of the Customs Act and Foreign Trade Act, notification issued by the DGFT is to be considered as notification issued by the Central Government which is binding upon the petitioners as the same is issued in exercise of powers vested in the Central Government under section 3(2) of the Foreign Trade Act. In such circumstances, the contentions raised by the petitioners with regard to the validity of the notification fails. The impugned notification cannot be held to be ultra vires to the provisions of the Customs Act or the provisions of the Foreign Trade Act, or Article 14 of the Constitution of India as the same is issued by the Central Government under the powers conferred by the provisions of section 3(2) and section 5 of the Foreign Trade Act.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

1. Rule returnable forthwith. Learned Standing Counsel Mr. P.Y.Divyeshwar waives service of notice of rule for the respondents.

2. Having regard to the controversy involved, which is in narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing.

3. By this petition under Article 226 of the Constitution of India, the petitioners have prayed for the following reliefs :

“(A) That Your Lordship may be pleased to issue a Writ of Mandamus or any other appropriate writ, order holding and declaring Notification no. 53 (RE-2013)/2009-2014 dated 2nd December, 2013 (Annexure-”E”) as ultra vires Section 5 of the Foreign Trade Act, ultra vires Section 14 of the Customs Act and ultra vires Article 14 and 19(1)(g) of the Constitution of India; and consequently striking down this Notification as ultra vires and unconstitutional;

(B) That Your Lordship may be pleased to issue a Writ of Mandamus or a Writ of Certiorari or any other appropriate writ, order or direction quashing and setting aside Demand Notice F.No.VII/48-622/Gr-I/MCH/19-20 dated 16.8.2019 (Annexure-”D”); and be further pleased to direct Respondent No.2 herein to return and restitute Rs.29,47,660/-collected from the petitioner as customs duty on two consignment imported in June, 2019 (detailed at Annexure-”F”) with interest at appropriate rate;

(C) Pending hearing and final disposal of the present petition, Your Lordship may be pleased to stay operation and implementation of Notification no. 53 (RE-2013)/2009-2014 dated 2nd December, 2013 (Annexure-”E”) on the terms and conditions that may be deemed fit by this Hon’ble Court;

(D) Pending hearing and final disposal of the present petition, Your Lordship may be pleased to restrain the Respondents, their servants and agents from recovering any amount from the petitioner pursuant to Notice
F.No.VIII/48-622/Gr-I/MCH/19-20 dated 16.8.2019 (Annexure-”D”);

(E) An ex-parte ad-interim relief in terms of Para 13 (C) and (D) above may kindly be granted.

(F) Any other further relief that may be deemed fit in the facts and circumstances of the case may also please be granted.”

4.Brief facts of the case are as under :

4.1) The petitioners are engaged in trading of the various commodities for last seven years and has been importing broken cashew kernels for trading of such commodity in the local market.

4.2) In the course of business, the petitioners entered into contracts with two Vietnam based suppliers i.e. M/s. Gotec Commodities (Vietnam) Co. Ltd and M/s. Thien Ma Production Trading Import Export Co. Ltd. for purchasing broken cashew kernels from them and regular sale/purchase contracts have been made by the petitioners incorporating therein the commercial details and terms like grade of the commodity, quantity, unit price, shipment time etc.

4.3) In accordance with the above contracts, both the suppliers have sold and supplied BB grade broken cashew kernels and commercial invoices have been issued for each of the consignment so sold by them. For the said purpose, the price agreed between the parties for the commodity in question has been ranging between 2.10 USD per Kg to 2.50 USD per Kg and the petitioners have actually paid this price only to the above referred suppliers. The price invoiced by the suppliers and paid by the petitioners has thus been the transaction value for the imported goods.

4.4) The petitioners declared the transaction value for each of the consignments imported by them while filing bills of entry before the customs officers at Mundra Port. The petitioners declared the invoiced price in the bills of entry, which has been ranging between USD 2.10 per Kg to USD 2.502 Kg, which would be around Rs.151/- (approx.) to Rs.180/- (apporx.) per Kg in Indian currency. The customs officers have assessed customs duties on this price taking the same as the assessable value under Section 14 of the Customs Act,1962 (for short “the Customs Act”) and the petitioners accordingly paid customs duties so assessed and cleared the goods from customs area for their trading and sale in the domestic market.

4.5) A notice dated 16.08.2019 was issued by the second respondent in respect of 9 bills of entry for importing the above referred commodity during May, 2018 to Feb, 2019 invoking Notification no. 53 (RE-2013)/2009-2014 dated 2nd December, 2013 issued by the Director General of Foreign Trade (for short “DGFT”) prescribing the Minimum Import Price (for short the “MIP”)of Rs.288/- per Kg for Cashew Kernels Broken and Rs 400/- per Kg for Cashew Kernel whole and asked the petitioners to pay differential customs duty for all the 9 consignments and corresponding 9 bills of entry on the basis that the duty assessed and paid were on the basis of transactional value whereas customs duties were chargeable on the MIP prescribed by the DGFT under the above referred Notification.

4.6) As the officers of the respondent no.2 insisted on payment of customs duties on two consignments of broken cashew kernel imported by the petitioners in June, 2019 in view of the notification no. 53 dated 2.12.2013 issued by the DGFT , the petitioners had to agree for paying customs duties for two consignments on the basis of MIP of Rs.288 per Kg for two bills of entry filed on 15.06.2019 and 19.06.2019  as these consignments were not assessed at the transaction value and the petitioners accordingly paid customs duties aggregating to Rs.29,47,660/- for these two consignments. Since these two consignments were not being cleared by assessing duties on transaction value and the petitioners were suffering on account of go-down charges etc; a letter dated 1.07.2019 was submitted by the petitioners requesting the respondent no.2 for clearance of these goods on MIP; and therefore duties were assessed and recovered from the petitioners on MIP and not the transaction value.

4.7) Therefore, the petitioners have preferred this petition for examination of validity and legality of Notification No. 53 dated 2.12.2013 issued under section 5 of the Foreign Trade Act as the same being ultra vires to section 5 of the Foreign Trade Act and also section 14 of the Customs Act.

5. The learned advocate Mr. Paresh M. Dave with learned advocate Amal P.Dave for the petitioners submitted that the notification no. 53 issued under section 5 of Foreign Trade (Regulation and Development) Act, 1992 ( for short “the Foreign Trade Act”) is ultra vires to section 5 of the Foreign Trade Act and also to section 14 of the Customs Act.

6. It was submitted that the petitioner no.1 imported cashew kernel (broken) of BB(Broken Bits) grade which signifies the size of pieces of cashew kernel as per the various grades of cashew prescribed by Cashew Export Promotion Council of India (for short “CEPCI”) and that the gradation made by the petitioner is in accordance with the standards prevailing in the international market. The learned advocate Mr. Dave relied upon the extracts of cashew grades published by CEPCI to submit that it is not in dispute from the facts of the case that the commodity imported by the petitioner has been cashew kernel (broken) of BB grade. It was pointed out that the price actually paid by the petitioners for purchasing such commodity from Vietnamese suppliers ranged between USD 2.10 per kg to USD 2.5 per kg which is equivalent to Rs. 151/-(approximately) to Rs. 180/- (approximately) per kg in Indian rupees and as such applicability of the notification no. 53 which prescribes Minimum Import Price (for short “MIP”) of Rs. 288/- per kg is arbitrary and, therefore, the consequent recovery proceedings initiated by the respondent on the basis of such MIP is also not legal.

7. The learned advocate Mr. Dave submitted that section 14 of the Customs Act provides for the Board to fix and notify the “tariff value” of any class of imported goods or exported goods and duty of custom is to be charged with reference to such tariff value. It was pointed out that section 14 of the Customs Act is a complete Code for valuation of the imported goods for the purpose of assessing and recovering custom duties and therefore, the notification no. 53 issued by the DGFT under section 5 of the Foreign Trade Act for valuation of imported goods is without any jurisdiction and authority of law.

8.The learned advocate Mr. Dave further submitted that the value or the price so specified by virtue of the notification issued under section 5 of the Foreign Trade Act cannot be considered as the transaction value as per section 14 of the Customs Act and the power and jurisdiction to fix and specify any price other than the transaction value for the purpose of assessing and collecting custom duties on such price/value is only under sub-section (4) of section 14 of the Customs Act and therefore, the MIP as tariff value for any imported goods including cashew kernel can be fixed and notified only by the Board while exercising powers under section 14(2) of the Customs Act. It was submitted that the notification no. 53 dated 2.12.2003 is not issued by the Board under section 14(2) of the Customs Act fixing and notifying the tariff value of cashew kernel (broken) as well as cashew kernel (whole) and hence such notification is ultra vires to section 14(2) of the Customs Act.

9. The learned advocate Mr. Dave would submit that the powers conferred upon the Government and the DGFT under the provisions of Foreign Trade Act do not empower to fix any price or minimum value for importing any goods in India because section 5 of the Foreign Trade Act only provides for empowering the Central Government to formulate and announce the Foreign Trade Policy from time to time. Reference was made to section 3 of the Foreign Trade Act to point out that the Foreign Trade Policy is for making provision for development and regulation of foreign trade by facilitating imports and increasing the exports and under sub-section (2) of section 3, the Central Government has power to publish any order for making provision for prescribing, restricting or other-wise regulating the import or export of goods or services of technology. It was therefore submitted that fixing MIP for allowing import of any goods is not a restriction or regulation, as contemplated under section 3 of the Foreign Trade Act.

10.The learned advocate Mr. Dave submitted that if import of commodities like cashew kernel is otherwise permissible freely under the Foreign Trade Policy and the Foreign Trade Act as no license or permit is required for importing such commodity in India, then fixing MIP by issuing notification for such commodity cannot amount to restriction or regulation that can be imposed by the Central Government under section 5 read with section 3 of the Foreign Trade Act. In such circumstances, it was submitted that the fixation of value of the imported goods is a matter solely governed under the provisions of the Customs Act and therefore, the notification no. 53 is ultra vires to section 5 read with section 3 of the Foreign Trade Act.

11.The learned advocate Mr. Dave thereafter referred to the provisions of the Customs Act for levying and collecting the duties and for safeguarding the interest of the domestic manufacturers. It was submitted that for safeguarding the interest of the domestic manufacturers, the Parliament has enacted the Customs Tariff Act, 1975 to impose Anti-Dumping Duty, Safeguards duty and such other levy under section 8A, 8B and section 9A of the said Act and notification can be issued by the Central Government for providing for differential tariff or differential value of the goods so notified. It was therefore, submitted that the Central Government cannot have any jurisdiction or power under the Foreign Trade Act for imposing differential tariff or for specifying differential value/price of the imported goods, as there are sufficient safeguards under the Customs Act and under the Customs Tariff Act for the same. It was therefore, submitted that the impugned notification no.53 issued under the Foreign Trade Act which is only meant for the development and regulation of Foreign Trade, is contrary to the provisions of the said Act.

12. Referring to the impugned notification which was issued in the year 2013, prescribing MIP of Rs.288/- per kg of cashew kernel (broken), it was submitted that such notification is contrary to Article 14 the Constitution Of India, firstly, on the ground that the price is fixed on an artificial basis as far back as in December 2013 which continued even when the petitioner imported the commodities in question, almost after six years without any change or amendment and secondly, one single or uniform price is fixed for all varieties and grades of cashew kernel(broken) and thereby equally treating unequal. It was therefore, submitted that the impugned notification is ultra vires to Article 14 of the Constitution of India.

13.The learned advocate Mr. Dave further submitted that the impugned notification is issued on 2.12.2013 fixing MIP of cashew kernel (broken) as Rs. 288/- per kg, whereas the commodity in question was actually being sold and offered for sale in the international market at much lower price and therefore, fixing of an artificial higher import price of Rs. 288/- per kg is not based on any reliable data or information about actual price at which such commodity was sold or offered for sale in the international trade.

14. The learned advocate Mr. Dave therefore, submitted that the impugned notification prescribing the MIP of Rs. 288/- per kg for cashew kernel (broken) in the year 2013 is kept constant by the DGFT till the year 2019 when the petitioners imported such goods and therefore, the impugned notification cannot be made applicable to the petitioners, as the same has been issued on an artificial basis and without any rational information, basis or data resulting into the same being violative of Article 14 of the Constitution of India.

15.The learned advocate Mr. Dave thereafter analyzed the extracts of cashew grades published by CEPCI to point out that there cannot be a uniform MIP of Rs. 288/- per kg for all such grades of cashew kernel (broken). The learned advocate Mr. Dave submitted that the petitioner has imported the commodity of BB grade which is not similar to any importer bringing in India by way of import of cashew kernel (broken) of any other grades which are prescribed by CEPCI such as Butts-B, LWP or SWP. It was therefore, submitted that uniform MIP of Rs.288/- per kg fixed by the impugned notification irrespective of the grades and size of the commodity, cannot be applied to unequal treating them equally and therefore, the impugned notification is required to be quashed and set aside.

16. The learned advocate Mr. Dave submitted that it is not in dispute that the petitioners imported the cashew kernel (broken) from Vietnamese suppliers at a price of Rs. 151/- to Rs 181/- per kg and the petitioners have made payment accordingly and, therefore, there is no justification in raising any demand that too on the basis of MIP fixed under impugned notification on the basis of differential value of the actual transaction value and the value fixed by the impugned notification.

17.The learned advocate Mr. Dave placed reliance upon the decision of the Calcutta High Court in case of Bimal Kumar Modi v. Union of India reported in 2014 (306) E.L.T. 97 (Cal) and in case of S. Mira Commodities Pvt. Ltd v. Union of India of Madras High Court reported in 2009 (235) E.L.T. 423 (Mad), wherein it is held that the Government and DGFT do not have any power under section 5 of the Foreign Trade Act as well as the Foreign Trade Policy to fix and prescribe MIP for any goods imported in India and that such price fixation and notification issued for that purpose were unconstitutional. The petitioners therefore, have challenged the constitutional validity of the impugned notification no.53 on the same grounds which were considered by the Madras High Court and Calcutta High Court in the above judgments. The learned advocate Mr. Dave therefore, prayed that on similar grounds as considered by the Madras High Court and the Calcutta High Court, the impugned notification no.53 also be held unconstitutional.

18. On the other hand, learned Standing Counsel Mr. P.Y.Divyeshwar appearing for the respondents raised the preliminary objection that the petition is not maintainable as there is alternative efficacious remedy available to the petitioners under the section 130 of the Customs Act whereby an appeal may be preferred before the Commissioner (Appeals) against the order passed by the Assistant Commissioner.

19.The learned advocate Mr. Divyeshwar with regard to the challenge to the constitutional validity of the impugned notification no. 53 dated 2.12.2013 submitted that when the petitioners filed bill of entry no. 3673973 dated 15.06.2019 and BE No. 3715746 dated 19.6.2019 for clearance of imported goods having same description as cashew kernels (broken) Grade BB (Broken Bits) under CTH 08013290, it was found during the examination that goods are cashew kernels (broken) which is required to be classified under heading CTH 08013210 and not under the heading CTH 08013290 and accordingly, minimum CIF value of Cashew Kernels (Broken) as per the notification no.53 dated 2.12.2013 was to be considered at Rs.288/- per kg. It was pointed out by Mr. Divyeshwar that the petitioners vide letter dated 1.7.2019, willingly agreed to change HS code/CTH from 08013290 to 08013210 to clear the goods at Rs. 288/- per kg CIF and paid custom duty accordingly. It was therefore, submitted that once the petitioner has agreed to accept the notification no. 53 of 2013 for the aforesaid two bills of entry, the petitioner cannot now deny to pay the duty as per the tariff value fixed by the said notification.

20.With regard to the challenge to notification no. 53 of 2013 the learned advocate Mr. Divyeshwar submitted that background of the impugned notifications is to safeguard the interest of farmers as they are one of the most important stake holders in the matters relating to Import/Export of agriculture goods and the Government is required to strike a balance between the interest of domestic producers and importers. It was submitted that whenever it is observed that in case of large scale of domestic producers, due to fall in prices in the local market the Government under consultation with all the stake holders tries to protect the interest of the domestic producers by way of putting various kinds of reasonable restrictions viz. Port Restrictions, Imposition of Minimum Market Price and quota Restrictions It was submitted that despite imposition of Import Duty on the commodities in question by permitting imports lead to considerable distress amongst the farmers in India, the Government was constrained to take steps to protect the farming community. It was submitted that by Notification dated 12.06.2019, import of cashew nuts is permitted on certain conditions by prescribing MIP.

21. The learned advocate Mr. Divyeshwar submitted    that    the    petitioner has misclassified imported goods i.e. Cashew Kernel Broken by classifying them under CTH 08013290 instead of CTH 08013210. It was submitted that the Petitioner has violated the conditions as prescribed under the Notification No.53(RE-2013)/2009-2014 dated 02.12.2013, violated the provisions of Para 2.01 of Foreign Trade Policy, 2015-2020 and Section 46(4) of the Customs Act, 1962 as the petitioners were required to declare correct details/particulars in Bill of Entry being filed by them. It was submitted that according to Section 111(m) of the Customs Act, the goods imported by the Petitioner were ‘restricted goods’ as they were imported at a price lower than the prescribed MIP for that category of goods and therefore liable for confiscation under 111(d),111(m) and 111(o) of the Customs Act, 1962.

22. The learned advocate Mr. Divyeshwar further submitted that section 3 of the Foreign Trade Act prescribes powers to make provisions relating to imports and exports empowering the Central Government to make provisions for the development and regulation of foreign trade by facilitating imports and increasing exports. In exercise of such powers, the impugned notification no. 53 was issued. It was submitted that by the impugned notification, amendment made by the Central Government in the import policy by exercising its powers under section 3 of the Foreign Trade Act is authenticated by the Director General of Foreign Trade since the same relates to the DGFT. It was therefore, submitted that the DGFT has not exercised powers under section 3 of the Act but has merely authenticated an order which relates to the DGFT in accordance with the Authentication Rules, 2002 and accordingly, the question of validity of the impugned notification does not arise and the goods are evidently and undeniably restricted. The learned advocate Mr. Divyeshwar thereafter placed reliance upon the decision dated 19.12.2018 of this Court in case of Premium Pulses Products & Kusum Agency v. Union of India in Special Civil Application No. 16765/2018 and other allied matters wherein this Court dismissed the petitions of various importers challenging the notification restricting the import of pulses by DGFT.

23. The learned advocate Mr. Divyeshwar submitted that the MIP is a temporary safeguard measure by the Government to protect the domestic industry/farmer against unfair trade practice of cheaper imported goods and to provide a level playing field to the Indian industry and farmers so as to restore parity with the domestic price of cashew kernel and to neutralize the benefit accrued to the importer by imports below the MIP. It was therefore, submitted that the Government is required to strike a balance between the interest of the domestic producers and the importers and whenever it is observed that large scale of domestic producers are affected due to fall in prices in the local market, it is incumbent upon the Government under consultation with all the stake-holders to protect the interest of the domestic producers by putting various kinds of reasonable restrictions like port restrictions, imposition of minimum market price, quota restrictions, etc.

24.In view of the above, the learned advocate Divyeshwar submitted that no interference is required to be made in the present petition, as the petitioners in order to avoid the adjudication process as per the provisions of Customs    Act, has challenged the constitutional validity of the notification no. 53 of 2013 which was existing for all these years and the same cannot be held to be unconstitutional, contrary to the provisions of the Customs Act, Foreign Trade Act and Foreign Trade Policy.

25. Having heard the learned advocates for the respective parties and having gone through the materials on record, only short question which arises for consideration of this Court is as to whether the notification no. 53 dated 2.12.2013 can be held ultra vires to the provisions of the Customs Act and the Foreign Trade Act as well as to the Article 14 of the Constitution of India or not?

26. With regard to the preliminary issue raised by the respondents regarding maintainability of the petition as the petitioner has challenged the Constitutional validity of the impugned notification, the petition is held to be maintainable under Article 226 of the Constitution of India.

27. It is not in dispute that the petitioners imported cashew kernel (broken) from Vietnamese suppliers for a price ranging from Rs. 151/- to Rs. 180 /- per kg in Indian currency which is the transaction value ordinarily required to be considered for levy of custom duty as per provision of section 14 of the Customs Act.

28. Notification no. 53 (RE-2013)/2009-2014 dated 2nd December, 2013 reads as under :

“In exercise of powers conferred under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraph 2.1 of the Foreign Trade Policy, 2009-2014, as amended from time to time, the Central Government hereby makes the following amendment in Chapter 8 of ITC (HS) 2012, Schedule 1 (Import Policy).

2. The minimum CIF value of Cashew Kernels under the following HS Codes of Chapter 8 of ITC(HS) 2012, Schedule 1 (Import Policy) per kilogram is fixed as under :

HS CODE Item

Description

Minimum CIF Value (Per Kg)
08013210 Cashew Kernel, broken Rs.288/-
08013220 Cashew Kernel, whole Rs. 400/-

Effect of this amendment :

The minimum price for import of Cashew Kernel (brokens) and Cashew Kernel (wholes) is fixed to Rs. 288/- per Kg and Rs. 400/- per kg respectively.”

29. On perusal of the above notification, it is clear that the same is issued under section 5 of the Foreign Trade Act read with paragraph no. 2.1 of the Foreign Trade Policy, 2009-2014, as amended from time to time by prescribing the minimum CIF value of cashew kernels under Chapter 8 of ITC (HS) 2012, Schedule 1 (Import Policy) per kilogram being Rs. 288/- for cashew kernel (broken) for HS Code 0801 32 10 and Rs. 400/- for cashew kernel (whole) for HS Code 0801 32 20. Since 2013, the MIP for two different categories of cashew kernels broken and whole are in existence.

30.The power to issue such notification by the Director General of Foreign Trade came up for consideration before the Calcutta High Court in case of Bimal Kumar Modi (supra), wherein the notification dated 13.5.2013 issued by DGFT fixing the CIF value of betel-nut (areca-nut ) was under challenge. The Calcutta High Court after considering the history and relevant provisions of the law, came to the conclusion that such notification cannot be sustained from whichever angle it is viewed and accordingly, the same was quashed and set aside. However, Madras High Court in case of S. Mira Commodities Pvt. Ltd (supra), considering the similar notification dated 4.6.2008 issued by the DGFT with regard to restricting the import of betel nuts valued at Rs.35/- or more per kg., held that the DGFT has no power to issue the notification under section 5 read with section 6(3) of the Foreign Trade Act on artificial basis. It was further held that no material data has been furnished for arriving at the figure of Rs. 35/- per kg of the
betel nuts imported when the market of betel nuts require 90% import and the free import policy has been evolved for such import and the said notification goes contrary to such policy.

31.This Court in case of Premium Pulses Products & Kusum Agency (supra), while considering such notification issued by the Central Government under section 3 of the Foreign Trade Act, held as under :

“12. A perusal of the impugned notification reveals that by virtue of such notification the Central Government, in exercise of powers conferred by section 3 of the Act read with paragraphs 1.02 and 2.01 of the Act as amended from time to time, has amended the import policy of items of Chapter 7 of ITC(HS)2017, Schedule-1 (Import Policy) as provided there under. On a plain reading of the notification, it is clear that powers under section 3 of the Act have been exercised by the Central Government, and it is the Central Government which has amended the import policy. At the same time it can also be seen that such amendment bears the signature of the Director General of Foreign Trade, which is the root cause of the dispute raised in these petitions. On behalf of the respondents it has been contended that the import policy has been amended by the Central Government in exercise of powers under section 3 of the Act and that the DGFT has only authenticated the same in accordance with the Authentication Rules. In support of such submission, a notification dated 16th February, 2002 of the Ministry of Home Affairs whereby an order made by the President on 16.01.2002 has been published for general information has been placed on record, whereby in exercise of powers conferred under clause (2) of Article 77 of the Constitution, rules called the Authentication (Orders and other Instruments) Rules, 2002 have been framed. Rule 2 thereof provides that all orders and other instruments made and authenticated in the name of the President shall be authenticated, and specifies the persons who may authenticate the same. Item No.12 therein provides that in case of orders and other instruments relating to the Directorate General of Foreign Trade, by the Director General of Foreign Trade, or the Additional Director General of Foreign Trade, or the Export Commissioner or Joint Director General of Foreign Trade. Thus, the Authentication Rules specifically empower the Director General of Foreign Trade to authenticate instruments relating to the Directorate General of Foreign Trade. A perusal of the impugned notification reveals that the same has been issued by the Government of India, Ministry of Commerce and Industries, Department of Commerce, Directorate General of Foreign Trade. Thus, by the impugned notification the amendment made by the Central Government in the import policy in exercise of powers under section 3 of the Act has been notified which relates to the Directorate General of Foreign Trade, accordingly, the same is authenticated by the Director General of Foreign Trade. Therefore, it is crystal clear that the DGFT has not exercised powers under section 3 of the Act but has merely authenticated an order which relates to the Directorate General of Foreign Trade in accordance with the Authentication Rules. The contention that the impugned notification has been issued by the DGFT in exercise of powers under section 3 of the Act, and is, therefore, ultra vires sub-section (3) of section 6 of the Act, does not merit acceptance.”

32. The Supreme Court by order dated 28.1.2019 has dismissed the SLP (C) 1922/2019 against the aforesaid judgment of this Court.

33. Thus from the above judgment of this Court it is clear that DGFT has not exercised powers under section 3 of the Foreign Trade Act but has merely authenticated an order which relates to the DGFT in accordance with the authentication rules. Therefore, the contention raised by the petitioners that DGFT has no authority to issue such notification is not sustainable in view of above dictum of law.

34. With regard to the contention of the petitioners that the price fixed by the DGFT in the year 2013 did not vary and therefore, the same is without any rationale, it is emerging from the facts that the petitioner having accepted such price for two of the bill of entries being bill of entry nos. 3673973 and 3715746 and custom duty being paid accordingly, the petitioner now cannot say that such price fixed by the impugned notification is without any rationale. The petitioners have raised such contentions only with a view to see that proper adjudication is not done by the authority for levy of duty on the differential price as per the notification no. 53 and the price at which the petitioner imported the goods. The notification no. 53 dated 2.12.2013 is similar to what is challenged before this Court as well as before the Madras High Court and the Calcutta High Court and all the High Courts have considered the contentions raised by the petitioners with regard to the provisions of the Customs Act, Foreign Trade Act as well as the provisions of Foreign Trade Policy.

35.Therefore, in view of the provisions of the Customs Act and Foreign Trade Act, notification issued by the DGFT is to be considered as notification issued by the Central Government which is binding upon the petitioners as the same is issued in exercise of powers vested in the Central Government under section 3(2) of the Foreign Trade Act. In such circumstances, the contentions raised by the petitioners with regard to the validity of the notification fails. The impugned notification cannot be held to be ultra vires to the provisions of the Customs Act or the provisions of the Foreign Trade Act, or Article 14 of the Constitution of India as the same is issued by the Central Government under the powers conferred by the provisions of section 3(2) and section 5 of the Foreign Trade Act.

36. The petition therefore being devoid of any merit, is hereby dismissed. Interim relief granted earlier stands vacated forthwith. Rule is discharged. No order as to costs.

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