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2016 (2) TMI 476 - HC - FEMAChallenge to the RBI (FEMA) circular - validity and legality - Policy in relation to import of Gold - On or about 14th August, 2013, RBI issued another Circular no. 25, referring to the said Circular no. 15 dated 22nd July, 2013, for clarification / modification in supersession of the earlier instructions, and made it incumbent on all nominated agencies to make exclusively available at least one fifth i.e. 20% of every lot of gold imported to the country, for the purpose of exports and the balance for domestic use. Further conditions were also imposed for such import referred as import of gold on 20/80 principle. The said RBI Circular also stipulated that Premier Trading Houses irrespective of whether they are nominated agencies or not, are permitted to import gold exclusively for the purpose of exports only. Held that:- There are the provisions under which the Central Government through its Ministry of Commerce and Zonal Director General (Joint) of Foreign Trade acted. It was empowered to impose conditions while granting or issuing the Certificates. Pertinently, the conditions at page 83 and the power to impose them are not challenged. Unable to agree with Mr. Chagla that a conjoint reading of these provisions in the 1992 Act together with the Customs Act, 1962, would not empower the Director General in this case to impose penalty. As we have already held, the Reserve Bank of India has enough powers and, therefore, there is no basis for the complaint that it lacks jurisdiction or authority to regulate the dealings in foreign exchange. In the instant case, the Reserve Bank of India is doing precisely this and, therefore, it neither interferes nor takes over the powers of the competent authority either under the Act of 1992 or the Customs Act, 1962. Once the certificates in favour of the petitioners were subject to the provisions of the Foreign Trade Policy and the procedure laid down thereunder, the Reserve Bank of India guidelines and Customs Rules and Regulations, then the import of 550 kgs of gold was governed by the same. The show-cause notice alleged that from the import of 550 kgs of gold only 350 kgs of gold was exported and as per the export details 200 kgs of gold was supplied to the domestic unit. This is a violation of the Reserve Bank of India’s Circular. Each of the terms and conditions, either in the certificates relied upon by the petitioners or the Reserve Bank of India guidelines are in consonance with the policy of the Government that precious metals having been brought in they ought to be exported so that the cost of imports could be mitigated by the earnings from export. That would save valuable foreign exchange as well. That is how the diversion in the domestic market was termed as a violation of Reserve Bank of India guidelines. We have, therefore, no hesitation in concluding that none of the contentions as raised before us by the petitioners have any merit. The present petitioners raise conflicting pleas and versions only to avoid compliance with the conditions and which are invited by them on their own. The conditions as imposed on them in the Nominated Agency Certificate and which is issued in their favour right from 2010 have never been questioned. In these circumstances, they cannot place any reliance on the Division Bench judgment. Writ Petition fails. Rule is discharged - Decided against the petitioners.
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