2022 (5) TMI 396 - HC - Customs

Advance Authorisation Scheme - Right of applicant to apply for a license to import the raw materials from any foreign country for the purpose of manufacture of the goods in India and thereafter export the same - applicant has been placed in the Denied Entity List (DEL) - HELD THAT - In the case of MESSRS MAXIM TUBES COMPANY PVT LTD. VERSUS UNION OF INDIA 2019 (2) TMI 1445 - GUJARAT HIGH COURT the Pre-import condition laid down under the Notification No. 18/2015-Cus. w.e.f. 30.10.2017 and also in Paragraph 4.14 of the Foreign Trade Policy 2015-20 was declared to be ultra vires the Advance Authorisation Scheme as contained in the Foreign Trade Policy 2015-20 as well as the provisions of the Handbook of Procedures. Although an attempt was made by Mr. Raval to persuade this Court that this litigation is not squarely covered by the judgment of this Court in the case of M/s. Maxim Tubes Company Pvt. Ltd. yet it is concluded that this matter should be admitted the interim relief to be granted. Rule returnable on 29.06.2022.

Summary

Issues:
Challenge to judgment of High Court, Stay order by Supreme Court, Ultra vires declaration, Opportunity of personal hearing, Pre-import condition validity, Interim relief granted

Analysis:
The judgment deals with various critical issues. Firstly, it addresses the challenge to the High Court's judgment in the case of M/s. Maxim Tubes Company Pvt. Ltd. vs. Union of India, which led to the writ applicants being placed in the Denied Entity List (DEL), restricting their ability to import raw materials for manufacturing goods in India. The Supreme Court stayed the High Court's judgment pending final hearing.

Regarding the challenge to the High Court's judgment, the writ applicants argued that the judgment should not be defaced even if challenged before the Supreme Court, citing precedents from other High Courts and the Supreme Court. The High Court considered this argument and decided to grant interim relief to the writ applicants, staying the operation of the DEL order until the final disposal of the writ application.

Another issue raised was the alleged lack of a show cause notice for recovering any specific amount from the writ applicants for the relevant period. The respondent claimed to have granted an opportunity for a personal hearing to review the DEL order, but the writ applicants disputed this claim, stating that no such opportunity was provided.

Furthermore, the judgment discussed the declaration of the Pre-import condition as ultra vires under the Foreign Trade Policy and the Handbook of Procedures in the case of M/s. Maxim Tubes Company Pvt. Ltd. The Court admitted the matter and granted interim relief, staying the writ applicants' placement in the DEL pending the final disposal of the writ application.

In conclusion, the High Court granted interim relief to the writ applicants, stayed the operation of the DEL order, and set a returnable date for further proceedings. The judgment carefully considered the legal arguments presented by both parties and provided a reasoned decision based on the principles of law and precedents cited during the hearing.