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TMI Blog2023 (8) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... NAMBIAR, K.JOHN MATHAI, JOSON MANAVALAN KURYAN THOMAS, PAULOSE C. ABRAHAM RAJA KANNAN, PRANOY HARILAL, E.K.NANDAKUMAR (SR.) FOR THE RESPONDENTS : BY ADV SHRI.P.VIJAYAKUMAR, ASG OF INDIA, S.KRISHNA, P.G.JAYASHANKAR, MANU S., ASG OF INDIA, SHRI.K.SHRI HARI RAO, CGC DSGI S.MANU, SHRI.S.BIJU, CGC, SHRI.JAGADEESH LAKSHMAN, ASSISTANT SOLICITOR GENERAL, SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE & CUSTOMS, SMT.C.G.PREETHA, CGC, SRI.B.HARRYLAL, SMT.K.R.NAYANA NATH, SRI.P.SHRIHARI, SMT.K.RADHAMANI AMMA, SC, SPICES BOARD, SRI.ANTONY MUKKATH, SC, SPICES BOARD, SREELAL N. WARRIER, SC, CENTRAL BOARD OF EXCISE AMP CUSTOMS, SRI.P.VIJAYAKUMAR DENNIS VARGHESE MANU S., ASG OF INDIA JUDGMENT The petitioners are in the business of importing spices and other articles. They are conducting the activities based on the Certificate of Importer- exporter Code issued by the Director General of Foreign Trade (DGFT), in accordance with Section 7 of the Foreign Trade (Development and Regulation) Act, 1992 ('the FT(D&R) Act' for short). Along with other spices, the petitioners are importing pepper also. The import of pepper was free under the Foreign Trade Policy 2015-2020. By Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustan Aluminium Corporation and Others [(1979) 3 SCC 229] and Avinder Singh and Others v. State of Punjab and Others [(1979)1 SCC 137] are pressed into service. 5. Referring to the Constitutional provisions, it is pointed out that Article 53 of the Constitution vests the President with the executive power of the Union. The President can exercise that power directly or through subordinate officers, in accordance with the Constitution. As per Article 77, the orders and other instruments made and executed in the name of the President ought to be authenticated in the manner specified in the rules. It is contended that the DGFT was not authorised to issue the impugned notifications and the notifications are not authenticated in the manner stipulated in Article 77. 6. Relying on Section 19(3) of the FT(D&R) Act, it is contended that, even though it is mandatory to place every Rule and Order made by the Central Government before each House of the Parliament, the impugned notifications were not placed before the Parliament and are therefore non est. It is argued that in Krishna Kumar Singh and Another v. State of Bihar and Others [(2017) 3 SCC 1], the Apex Court has held the failure to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuance of the impugned notifications. Further, the re-export of low quality pepper from India started affecting the credibility of Indian Black Pepper in the international market also. The impugned notifications were issued to remedy the situation. 11. The challenge on the ground of competence of the DGFT is met by drawing attention to the File Notes produced as Ext.R1(a) in W.P.(C) No.26804 of 2021, wherein reference is made to the representations received from domestic pepper growers and organisations representing the farmers, ventilating their grievance with respect to the import of cheap quality pepper to India. It is also noted that the matter can be taken up by the DGFT for notifying the MIP of pepper after obtaining approval from the Hon'ble Minister for Commerce and Industries and on receipt of recommendation from the Ministry of Agriculture and Farmers Welfare. It is submitted that the File Notes on the subject produced as Ext.R1(b) would reveals that the decision to issue the notifications was taken after discussion with the Hon'ble Minister. It is submitted that the DGFT is a regulator of the Foreign Trade Policy and decisions with respect to the regulations ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Parliament will not result in nullification of the notification. Support for this proposition is sought to be drawn from Atlas Cycle Industries Ltd. and Others v. The State of Haryana [1979 (2) SCC 196]. 15. Learned Senior Counsel appearing for the United Planters Association of Southern India (UPASI) and the learned Counsel for the other respondents adopted the arguments of the learned Additional Solicitor General. It is argued that the notifications are in tune with the fiscal policy of the Government and are not amenable to judicial review. 16. Indisputably, the decision to regulate the import of black pepper is the outcome of the Government's policy to prevent the influx of cheap quality pepper into the domestic market, thereby affecting the domestic growers. It is settled law that the wisdom and advisability of economic policies are not amenable to judicial review, unless the policy is demonstrably contrary to any statutory provision or the Constitution. In other words, it is not for the courts to consider relative merits of different economic policies and decide whether a wiser or better one can be evolved. In this context it is worthwhile to read the following obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section shall be applicable, in case of import or export of services or technology, only when the service or technology provider is availing benefits under the foreign trade policy or is dealing with specified services or specified technologies. (3) All goods to which any Order under subsection (2) applies shall be deemed to be goods the import or export of which has been prohibited under Section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly. (4) Without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export of any goods, goods, nor any goods shall be prohibited for import or export except, as may be required under this Act, or rules or orders made thereunder. 5. Foreign Trade Policy.-The Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner, amend that policy: Provided that the Central Government may direct that, in respect of the Special Economic Zones, the foreign trade policy shall apply to the goods, ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntication(Orders and Other Instruments) Rules, 2002. By virtue of the said rules, the orders and other related instruments relating to the Directorate General of Foreign Trade made executed by the President can be authenticated by the DGFT, Additional DGFT, Export Commissioner or the Joint DGFT. In Agricas LLP (supra) the Apex Court, answered the challenge against the competence of the DGFT to issue an order amending the EXIM policy in the following manner; "15. At the outset, we must record that the importers, and in our opinion rightly, have not raised the contention that DGFT could not have notified the impugned notifications. The notifications themselves record that they were published by the Ministry of Commerce and Industry, Department of Commerce, Directorate General of Foreign Trade. The first paragraph of the notification states that they had been issued by the Central Government in exercise of powers conferred under Article 77 of the Constitution. Clearly, the notifications were issued by the Central Government, and not DGFT that had performed the ministerial act of publication. The decision to amend and issue the notification was of the Central Government. Neither Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the Central Government. Therefore, the challenge on the premise that the notifications were issued by the DGFT and not the Central Government is unsustainable. 20. The next contention is that the impugned notifications are non est for reason of failure to lay them before both Houses of Parliament, despite the specific requirement in Section 19(3) of the FT(D&R) Act. Being of relevance, Section 19(3) is extracted hereunder; "19. Power to make rules.-(1)The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Act. (2)xxxxxx (3) Every rule and every Order made by the Central Government under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or the Order or both Houses agree that the rule or the Order should not be made, the rule or the Order, as the case may be, sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 3 of the Act, requiring the placing of the order were directory and not mandatory and the omission to comply with that requirement will not have the effect of invalidating the notification. Along with other factors pertaining to Section 3(6) of the Essential Commodities Act, the Apex Court took note of the absence of consequence of non-laying of the orders before both Houses of the Parliament, and that the requirement of laying the order before both Houses of the Parliament is not a condition precedent. Based on the above factors and relying on precedents, the following conclusion was arrived at; "32. From the foregoing discussion, it inevitably follows that the Legislature never intended that non-compliance with the requirement of laying as envisaged by sub-section (6) of Section 3 of the Act should render the order void. Consequently non-laying of the aforesaid notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question before both Houses of Parliament cannot result in nullification of the notification. Accordingly, we answer the aforesaid question in the negative. In view of this answer, it is not necessary to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding hostile discrimination based on the exemption from minimum CIF value of Rs.500/- granted to imports under Advance Authorisation Scheme, imports by 100% Export Oriented Units and Units in the Special Economic Zone, cannot also be sustained. It is to be noted that the entire quantity of pepper imported by the above three category of traders are exported whereas pepper imported by importers falling outside the categories is consumed in India itself. within the country. As such, there is clear distinction between the exempted category and the other importers. It is trite that only similarly circumstanced persons are entitled to equal treatment. Moreover, Article 14 will not come into play when the distinguishing rationale is based on justifiable reasons and the choice of differentiating one set of persons from the another has a reasonable nexus to the objective sought to be achieved. The objective behind the impugned notifications is to prevent the import of cheap quality pepper into India. As such, the differentiation between two classes of importers has nexus with the objective. 26. I find no merit in the challenge based on Article 19(1) (g) also, since the effect of the notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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