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2015 (1) TMI 493 - DELHI HIGH COURTRestriction on Export of bullet proof jacket - whether the condition requiring the exporters to obtain permission of DoDP for exports of products such as bullet proof vests is contrary to the FTP and/or the FTDR Act - Held that:- There is no restriction as to export of any item unless it is expressly provided under the FTP or any law in force. In the present case, there is, admittedly, no law that expressly prohibits or restricts the exports of bullet proof vests - Entry no. 4, which relates to military stores indicates that military stores are freely exportable; the same is indicated by the word ‘Free’ under the column under the heading “Policy”. However, it is also provided that a No Objection Certificate from DoDP would be required for export of items other than those listed under Note 1 to Table-A. It is relevant to note that entry no. 4 only applies to military stores as specified by the DGFT. Admittedly, the DGFT has not specified any item of military stores as yet and thus, the present entry has been rendered ineffective. The expression ‘military stores’ only specifies the nature of items that may be specified by the DGFT. This entry cannot be read as restricting all items in the nature of ‘military stores’ unless made freely exportable by the DGFT. Given the underlying intent of FTP - items are freely exportable unless restricted - it is not possible to read any restriction under entry no. 4 unless the DGFT specifies those items. - Plainly, the FTP empowered the DGFT to specify items of military stores that would be freely exportable subject to obtaining a NOC from DoDP. Admittedly, the DGFT has not specified any such list but, by the impugned circular, has sought to pass an omnibus order disallowing export of all goods which are ‘apparently in the nature of ‘Military Stores’’. Clearly, the same is not in conformity with the FTP read with Schedule 2 of ITC (HS), 2012 as notified by the Central Government. Whether the DGFT is empowered under the legal framework to issue such omnibus directions which are, apparently, not in conformity with the notified FTP. - Held that:- entry no. 4 of Table A of Schedule 2 of ITC (HS), 2012 requires that a NOC be obtained from DoDP in respect of items specified by the DGFT. In the circumstances, the only role that the DGFT could play in respect of the said entry was to specify a list of items covered under the said entry. Clearly, the impugned circular is not in conformity with this entrusted function. - appointment and the functions of the DGFT are as indicated in Section 6 of the FTDR Act and the DGFT is not authorized to interpret other commitments of the Central Government and issue circulars with respect thereto. Paragraph 2.1 of the FTP notes that restrictions in exports may be imposed by any other law. However, such restrictions would have to be specified in the text of that law and not by circulars issued by the DGFT. And, it is not the respondent’s case that exports of military stores are restricted under any other law. - implying that the impugned circular has been issued considering India’s commitment regarding non-proliferation of weapons of mass destruction is, plainly, without application of mind. Bullet proof vests and military stores cannot be read as including weapons of mass destruction. Further, the respondent has failed to point out any commitment made by India for restricting export of bullet proof vests, which is the product in question. Admittedly, bullet proof vests are not included in the SCOMET list as yet. In the circumstances, I am unable to accept that the FTP, in any manner, restricts export of bullet proof vests. In any event the impugned circular does not purport to notify any item of SCOMET list but seeks to restrict items, which are apparently considered as ‘military stores’. - bullet proof vests are freely importable in the country. In the circumstances, it does not stand to reason to read in any restriction for export of such items in the FTP. - impugned circular is set aside - Decided in favour of assessee.
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