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TMI Blog2011 (3) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... pute in all these writ petitions is common, all these writ petitions are heard together and disposed off by this common judgment. 3. The petitioners are engaged in the manufacture/export of cotton yarn. In all the Foreign Trade Policy ("FTP" for short) announced by the Central Government from time-to-time, cotton yarn was freely exportable. For manufacture and export of cotton yarn, the petitioners have large establishments and have engaged thousands of workers. 4. Para 2.1 of the current policy i.e. FTP 2009-2014 announced by the Central Government provides that exports and imports shall be free, except where regulated by FTP or any other law in force. Thus, even under the current FTP 2009-14 cotton yarn was freely exportable. 5. By a notification dated 9-4-2010 issued under Section 5 of the FTP 2009-2014, the Central Government for the first time imposed restriction on export of cotton yarn by directing that the contracts for export of cotton yarn shall be registered with the Textile Commissioner prior to shipment and clearance for export of cotton yarn consignments shall be given by customs authorities after verifying that the contracts have been registered. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruptly and without any prior intimation stopped registration of cotton yarn exports, as a result whereof, the petitioners who had firm contracts could not export cotton yarn which were manufactured and kept ready for export. 9. Challenging the office memorandum/Press Note dated 1-12-2010, writ petitions were filed in this Court. During the pendency of these writ petitions, the Central Government issued a notification on 22-12-2010 under Section 5 of the 1992 Act. By the said notification, the earlier notification dated 9-4-2010 was amended to the effect that export of cotton yarn with effect from 1-12-2010 would be permitted under licence instead of permitting export under EARC. The notification dated 22-12-2010 reads thus : "Notification No. 14 (RE-2010)/2009-14 New Delhi, dated 22nd December, 2010 Subject : Restriction on export of cotton yarn - regarding. 10. (E) In exercise of the powers conferred by Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992) read with Para 2.1 of the Foreign Trade Policy, 2009-14, the Central Government hereby makes the following amendments in respect of Sl. No. 161B {ITC (HS) Classification} in the Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d today, stipulating that henceforth export of cotton yarn will be restricted and will be allowed to be exported under licence. However, Exporters who have obtained Registration Certificate from Textile Commissioner, Mumbai before 1st December, 2010 would be permitted to export Cotton Yarn within the quantity limit for which such registration certificate has been issued and within the validity of such registered contract. The data for the quantity that has already been exported in 2010-11 is being collected. The representations received to review the extent of exportable surplus are also being examined. 3. Exact modalities for submitting applications for grant of export licence would be notified once the quantity of exports already made has been ascertained and the extent of exportable surplus has been reassessed. 4. This issue with the approval of Director General of Foreign Trade. Sd/- (Hardeep Singh) Joint Director General of Foreign Trade) Email : [email protected]" Thus, notification dated 22-12-2010 was issued to permit export under licence with retrospective effect from 1-12-2010 and the policy circular dated 22-12-2010 was issued to implement the policy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification on 22-12-2010 with retrospective effect from 1-12-2010. (c) As held by the Delhi High Court in the case of Agri Trade (supra) which is approved by the Apex Court in the case of Union of India v. Asian Food Industries reported in (2006) 13 SCC 542 = 2006 (204) E.L.T. 8 (S.C.), the notification dated 22-12-2010 issued under Section 5 of the 1992 Act cannot have retrospective effect. (d) Assuming that the notification under Section 5 of the 1992 Act could be issued by the Central Government retrospectively, the notification dated 22-12-2010 has been issued by Shri Anup K. Pujari in his capacity as DGFT and not on behalf of the Central Government and, therefore, bad in law. (e) As there were no quantity restrictions for export of cotton yarn under the FTP and the only restriction was to obtain EARC, the exporters as on 1-12-2010 had entered in to firm contracts with their foreign customers for export of cotton yarn and had exposed themselves to commercial liability. The raw cotton procured by the petitioners were all meant for executing export orders and it would be impossible for them to dispose off such quantities in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the 1992 Act confer power on the Central Government, there is a vital difference between the two. He submitted that Section 3 specifically contains the power to restrict export of any goods or class of goods. Section 5 provides for formulation and announcement of the Export and Import Policy. Order under Section 3 has to be laid before the House of Parliament in terms of Section 19(3) of the 1992 Act and thus subject to scrutiny by the Parliament. Notification under Section 5 is not required to be laid before the Parliament. Relying on a decision of the Apex Court in the case Bhavnagar University v. Palitana Sugar Mills Private Limited reported in (2003) 2 SCC 111, Mr. Nankani submitted that when the statute requires an act to be done in a particular manner, the same must be done in that manner or not at all. Accordingly, he submitted that what cannot be done directly, cannot be done indirectly. Accordingly, he submitted that the impugned memorandum/notification/circular which are not passed under Section 3 of the 1992 Act are legally unsustainable. 14. Mr. Nankani further submitted that the quantity restriction or ceiling on export of cotton yarn cannot be imposed by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected with Textile Industry including representatives who are engaged in the manufacture and export of cotton yarn. 18. Mr. Rana submitted that once the Central Government has taken a policy decision in public interest based on the recommendations of the Advisory Board constituted by the Central Government, it is not open to the Courts to go into the sufficiency of the materials so as to hold that the decision taken is not in public interest. Strong reliance was placed on an unreported decision of the Delhi High Court in the case of Gujarat Ambuja Exports Limited v. Union of India (Writ Petition No. 8406 of 2010) decided on 17-2-2011 by the learned counsel for the Revenue wherein the policy decision of the Central Government to ban export of cotton yarn in excess of 720 million kgs. has been upheld. 19. Mr. Rana further submitted that the right to export is not a fundamental right and it is open to the Central Government to impose such restrictions as are deemed fit in public interest. In the present case the policy decision taken by the Textile Ministry on 1-12-2011 to ban export of cotton yarn has been further approved by the Group of Ministers in their meeting held o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest. As per the policy, the exporters to whom EARC's have been granted are allowed to export and the exporters to whom EARC's have not been granted can apply for licence and the same would be granted to the extent of shortfall in the export of 720 million kgs. of cotton yarn upto 31-3-2010. 23. Mr. Chatterjee, learned counsel appearing on behalf of the Revenue in one of the matter before us, on instructions, submitted that the policy decision of the Government to restrict export of cotton yarn during the year 2010-2011 (upto 31-3-2011) is not required to be published in the Government Gazette either by issuing a notification or by issuing an order under the 1992 Act. He submitted that the policy decision of the Government has been widely published by way of press release/office memorandum/policy circular and, therefore, the exporters who are admittedly aware of the ban imposed by the Central Government cannot challenge the ban which is imposed in public interest. Accordingly, he submits that there is no merit in these writ petitions and are liable to be dismissed in limine. 24. We have carefully considered the submissions advanced by the counsel on both sides. 25.&ems ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Central Government under Section 5 of the 1992 Act can amend the FTP by way of a notification in the Official Gazette. Similarly, the Central Government under Section 3(2) of the 1992 Act by order published in the Official Gazette, prohibit, restrict or otherwise regulate export of any particular class of goods. 29. In the present case, by an office memorandum/press release dated 1-12-2010 the general public including the exporters were informed that the Central Government has taken a policy decision to ban export of cotton yarn beyond 720 million kgs. during the year 2010-2011 (upto 31-3-2011). The said decision was based on the report of the CYAB. The CYAB was constituted by the Central Government in September 2010. The members of CYAB are Government Officials as well as Textile Associations. The object of constituting the CYAB was to monitor the domestic and international prices of cotton yarn and suggest measures for increasing the availability of cotton yarn at reasonable prices for domestic consumption. 30. The members of the CYAB met from time-to-time and in the meeting held on 29-10-2010 prepared cotton yarn balance sheet. Following particulars emerge f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010-2011 (upto 31-3-2011) cannot be faulted. 34. The question then to be considered is, whether the policy decision to ban export of cotton yarn beyond 720 million kgs. has been imposed in the manner specified under the 1992 Act? 35. Under the 1992 Act, the Central Government can impose restriction on exports by an order published in the Official Gazette under Section 3(2) of the 1992 Act. Similarly, the Central Government has power to amend the FTP by a notification in the Official Gazette under Section 5 of the 1992 Act. 36. In the present case, the office memorandum/press release dated 1-12-2010 states that the Central Government has taken a policy decision to ban export of cotton yarn beyond 720 million kgs. during the year 2010-11. Admittedly, the said office memorandum/press release dated 1-12-2010 is neither an order under Section 3(2) nor a notification under Section 5 of the 1992 Act and the same has not been published in the Official Gazette. Therefore, the office memorandum/press release dated 1-12-2010 being not in consonance with the provisions of the law contained in the 1992 Act would have no legal force and the ban imposed thereunder cannot be sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted, because, the petitioners have brought on record various notifications issued under Section 5 of the 1992 Act, which are published in the Official Gazette so as to impose restrictions on import/export. For example, policy decision fixing minimum export price of onions has been published in the Official Gazette under Section 5 of the 1992 Act by way of Notification No. 29/2010, dated 1-3-2011. Similarly, quantity restriction on export of edible oil in branded consumer packs has been published in the Official Gazette by way of notification No. 9/10 dated 1-11-2010 issued under Section 5 of the 1992 Act. There are several other notifications published in the Official Gazette, whereby restrictions on import/export have been imposed as per the provisions of the 1992 Act. Therefore, the argument of the Revenue that the policy restriction on export of cotton yarn need not be published in the Official Gazette cannot be accepted. 41. The policy circular dated 22-12-2010 issued by the Jt. DGFT/DGFT cannot be said to be an order/notification issued by the Central Government under the 1992 Act. Wherever the order/notification is issued by the DGFT for and on behalf of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2010 cannot claim to be EARC holders, because admittedly EARC's have not been granted to the petitioners. Admittedly, the DGFT who issued notification on 22-12-2010 is authorized to issue notification for and on behalf of the Central Government. Even if it is held that the notification dated 22-12-2010 could not be issued retrospectively and it is held that the notification would operate prospectively, in view of the fact that no EARC's have been issued from 1-12-2010, the question of directing the respondents to issue EARC's till 22-12-2010 does not arise at all. In other words, the exporters who have applied for registration but EARC's have not been granted till 22-12-2010 are entitled to apply for licence and we are informed that the petitioners have applied for licence and the same would be considered and granted in accordance with law. 44. We see no merit in the argument of the petitioners that the restriction to permit export under licence or quantity restriction on export cannot be imposed by a notification under Section 5 of the 1992 Act and such restriction has to be imposed by an order published under Section 3(2) of the 1992 Act. In our opinion, the power of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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