DGFT is required to act in good governance as a facilitator for exports and imports: Bombay High Court

 on 08 04 2021 on 14 04 as.wpst.96678.20.docAjay IN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTIONWRIT PETITIONNO.96678 OF 2020Rika Global Impex Limited..Petitioner VersusUnion of India and Ors...Respondents...................Mr. Vineet Naik Senior Advocate a w Mr. Sukand Kulkarni Mr. S.S. Bobde Mr. Jas Sanghavi and Mr. Durga PrasadPogary i by M s. PDS Legal Advocates for the Petitioner.Mr. Pradeep S. Jetly Senior Advocate a w. Mr. J.B. Mishra Advocates for Respondent Nos.1 to 3.Mr. Rui Rodrigues a w. Mr. N.R. Prajapati Advocates forRespondent Nos.4 to 6.................... CORAM : UJJAL BHUYAN & MILIND N. JADHAV JJ. RESERVED ON : MARCH 12 2021. PRONOUNCED ON : APRIL 8 2021.JUDGMENT :and respondent No.3 i.e. the AssistantCommissioner of Customs Appraising Group I & IA to allowclearance of 2 650 MTs of Pigeon Peas covered under Bill ofEntry Nos.9029721 dated 02.10.2020 9028987 dated on 08 04 2021 on 14 04 as.wpst.96678.20.doc02.10.2020 9028862 dated 02.10.2020 8845847dated 17.09.2020 8843086 dated 17.09.2020 8985829 dated 29.09.20208987173 dated 29.09.2020 8982222 dated28.09.2020 8994149 dated 29.09.2020 9008104dated 02.10.2020 9029328 dated 02.10.2020 andwhich havebeen held up inspite of having valid registration of AdvancePayment Certifcate bearing File No.03 27 008 00161 AM18dated 06.09.2017 and issued on 27.09.2017 by the ofce ofthe respondent No.5 i.e. the Director General of Foreign Trade(hereinafter referred to as "the DGFT") permitting import ofPigeon Peas under the Foreign Trade Policy 2015 2020(hereinafter referred to as "the FTP"). 3.Before we advert to the submissions made bylearned counsel for the respective parties it will be appositeto briefy refer to the relevant facts as pleaded foradjudication of the lis.3.1.Petitioner is a company incorporated under theCompanies Act 2013 and engaged in the business of importand export of agricultural commodities. Petitioner is aregular importer and exporter of agricultural produceincluding Pigeon Peasfrom Sudan Myanmar Tanzaniaand Mozambique. Petitioner has been allotted import exportcode and accorded status of Star Trading House byrespondent No.5 i.e. the DGFT.3.2.In the ordinary course of business petitioner had on 08 04 2021 on 14 04 as.wpst.96678.20.docentered into contract dated 26.05.2017 with AgricomInternational General Trading LLCfor purchase of Pigeon Peas thecontract was mutually amended from time to time vide 8addendums whereby some terms of the contract wereamended and shipment period was extended. Petitionernotifed the addendums to the ofce of respondent No.6 i.e.the Additional Director General of Foreign Trade Mumbai.Petitioner s contract for import of Pigeon Peas is under theprovisions of the FTP validity of which now stands extendedtill 31.03.2021. 3.3.By notifcation No.19 2015 20 dated 05.08.2017 DGFT amended the import policy of certain items underChapter 7 of the ITC2017 whereby import of PigeonPeas was regulated revised from free to restricted category stating that import shall be subject to an annualfscal quota of 2 lakh MT. By trade notice No.13 2015 20dated 11.08.2017 it was clarifed that though 2 lakh MT wasalready imported during the said current fscal year import ofPigeon Peas in respect of which irrevocable letters of creditwere opened prior to 05.08.2017 and subsequently registeredwith the jurisdictional Regional Authority as per provisions ofthe FTP was permitted. By another trade notice No.15 2015 20 dated 31.08.2017 DGFT provided further relaxationallowing registration of contracts for import of Pigeon Peaswherein advance payment had been madeby the DGFT on the basis of advance paymentmade to its supplier. Initially the RC granted to the petitionerwas for import of Pigeon Peas from Sudan howeversubsequently by amendment sheet No.01 dated 02.11.2017 petitioner was permitted to import Pigeon Peas from Malawi Myanmar Mozambique and Tanzania. 3.5.DGFT issued 5 RCs to the petitioner against thetrade notice dated 31.08.2017. Petitioner imported PigeonPeas against 4 RCs to the extent of 11000 MTs by 2018.Import against the 5th RC in respect of balance 11000 MTswas to be completed between 2018 to 2020.3.6.In view petitioner s contractual obligationsshipment was to reach India between February and March2020 but due to Covid 19 pandemic and the resultantlockdown enforced by many countries there was delay andthe shipment of Pigeon Peas arrived in the month ofSeptember 2020. Initially petitioner fled 3 bills of entrybearing Nos.8845847 dated 17.09.2020 8843086dated 17.09.2020 and8842485 dated 17.09.2020 seekingclearance of Pigeon Peas for home consumption. 3.7.Petitioner s shipment was not cleared for homeconsumption by respondent Nos.2 & 3 as a result of whichpetitioner incurred demurrage detention charges due to on 08 04 2021 on 14 04 as.wpst.96678.20.docdelay in clearance. Petitioner therefore addressed letterdated 22.09.2020 to the DGFT seeking clarifcation as towhether the RC dated 06.09.2017 issued to the petitioner wasvalid for import of Pigeon Peas in the year 2020 and alsoapproached respondent No.3 who informed the petitioner thatrespondent No.3 had sought clarifcation from the DGFT withrespect to validity of its RC dated 06.09.2017. Duringpendency of this action additional quantity of Pigeon Peasimported by the petitioner arrived at Nhava Sheva port inMumbai for which petitioner fled additional 10 bills of entrybearing Nos.(i) 9029721 dated 02.10.2020 9028987 dated02.10.2020 9028862 dated 02.10.2020 8985829dated 29.09.2020 8987173 dated 29.09.2020 8994149 dated 29.09.20209008404 dated 02.10.2020 9029328 dated02.10.2020 and9029262 dated 02.10.2020 seekingclearance for home consumption. 3.8.The total quantity of Pigeon Peas under theaforesaid 13 bills of entry is 2650 MT clearance of which isthe subject matter of the present writ petition. Petitioner haspleaded that the balance 8350 MT of Pigeon Peas is alsoready to be shipped by its foreign supplier but due todetention of the present consignment petitioner hasrequested its foreign supplier to keep the shipment on holdfor the present. 3.9.Since petitioner s goods are perishable in nature by letter dated 29.09.2020 addressed to the DeputyCommissioner of Customs petitioner sought permission forstorage of the goods in bonded warehouse under Section 49 on 08 04 2021 on 14 04 as.wpst.96678.20.docof the Customs Act 1962 to avoid detention and ground rentcharges.3.10.Thereafter petitioner entered intocorrespondence with the respondents seeking clarifcation onthe validity of its RC but received no reply. By letter dated10.11.2020 petitioner requested Deputy Commissioner ofCustomsto permit the petitioner to convert the billsof entry from home consumption to warehousing so as toenable the petitioner to transfer the goods to the actualwarehouse who was the license holder in order to stop furtherlosses being sufered by the petitioner due to non clearanceof the goods and due to its perishable nature. Petitioner alsoaddressed online complaint on 12.11.2020 to the GrievanceRedressal Committee of the FTP.3.11.By letter dated 12.11.2020 respondent No.3i.e. Assistant Commissioner of Customs Appraising Group I& IA rejected the petitioner s request for conversion of the 13bills of entry from home consumption to warehousing.3.12.Being aggrieved by the non clearance of theshipment of approximately 2650 MT of Pigeon Peas importedvide RC dated 06.09.2017 under the 13 bills of entry petitioner has approached this Court by the present petitionseeking the relief(s) as indicated above. 4.Mr. Vineet Naik learned senior counsel appearingon behalf of the petitioner at the outset has informed thatthe tenure of the FTP 2015 2020 now stands extended till31.03.2021 vide notifcation dated 31.03.2020. He submittedthat import against 4 RCs was completed by the petitioner in on 08 04 2021 on 14 04 as.wpst.96678.20.doc2018 whereas import against the 5th RC was to be completedbetween 2018 to 2020 import was thus continuous from thedate of issuance of the RCs to the petitioner RC dated06.09.2017 issued to the petitioner was without specifyingany validity period or date of shipment but categoricallystated that the RC would remain valid till the entire quantityis imported petitioner extended the contract mutually withits foreign supplier from time to time intimation of which wasgiven to the DGFT at all times petitioner s RC was fullycovered by the Notifcation dated 05.08.2017 and theclarifcatory trade notices dated 11.08.2017 and 31.08.2017issued under the FTP there was no embargo on the petitionerto import the goods only during the fscal year 2017 18 ascontended by respondents and the import of the entirequantity of goods could be made during the tenure of theFTP. He submitted that since petitioner s contract wasentered into prior to 05.08.2017 RC issued to the petitionerdid not mention any expiry date as such the validity of theRC is till the FTP is in force or till completion of import whichever is earlier hence petitioner is entitled to clearanceof the imported goods under the RC and non clearance of thegoods is illegal and contrary to the provisions of the FTP. 5.PER CONTRA Mr. Rui Rodrigues learned counselappearing on behalf of respondent Nos.4 to 6 has defendedthe action of non clearance of the goods and in thisconnection has drawn our attention to the afdavit in replydated 05.01.2021 and additional afdavits dated 21.01.2021and 02.03.2021 fled by the DGFT and contended thatvalidity of the RC issued to the petitioner was only for thefscal year 2017 18 and date of expiry of the RC is the date of on 08 04 2021 on 14 04 as.wpst.96678.20.docexpiry of the notifcation petitioner s claim that its contractand addendums be treated as a single document did not fndany import in view of the relaxation provided by trade noticedated 31.08.2017 in respect of paragraph 1.05 of the FTP trade notice being issued in order to address the genuinehardship faced by importers exporters no relaxation criteriafor extension of contract was prescribed in the trade notice thus in the absence of any explicit relaxation or extension validity of the petitioner s shipment in 2020 as perpetitioner s contract is to be considered as on the date ofregistration of the contract and it cannot be extendedindefnitely by various addendums allegedly addressed to theofce of the Additional Director General of Foreign Trade thesaid ofce did not accept receive the alleged addendums asno computerised acknowledgment was issued to thepetitioner notifcation dated 05.08.2017 was specifcallyissued to restrict import of Pigeon Peas in order to protect thedomestic farmers from unbridled imports this notifcationimposed restriction on the import of annual quota notifcation dated 31.08.2017 was issued only to protect theimporters who had already entered into contracts withadvance payment prior to 05.08.2017 and relaxation wasprovided beyond the quota but the same was to becompleted during the fscal year 2017 18 and could not beextended indefnitely by entering into addendums thus in theabsence of any validity endorsed on the RC issued to thepetitioner the quantity value and shipment period in thecontract as on the date of registration has to be treated as alimiting factor contention of the petitioner that the FTPpermitted import under the RC for the entire duration of FTPis erroneous as trade notice dated 31.08.2017 allowed for on 08 04 2021 on 14 04 as.wpst.96678.20.docregistration of contracts as per the terms of the contract ason the date of its registration with the balance value quantityand shipment period available in the contract as the limitingfactor the relaxation provided was only to alleviate theimmediate sufering of the importers and could not be mis utilized by extending the relaxation beyond the fscal year2017 18 petitioner while applying for amendment in the RCfor adding country of origin did not mention that its contractwas extended till 28.09.2020 the RC issued to the petitionercannot be treated as open ended and it has to be linked withthe notifcation and year of issuance i.e. 2017 18 only. 5.1.He referred to the additional afdavit dated02.03.2021 and contended that petitioner was initially issued2 RC s of 11000 MTs each on the basis of its contract petitioner s application dated 05.09.2017 was considered byrespondent No.6 in view of the contract entered into by thepetitioner against advance payment made by the petitionerto its foreign supplier and consolidated RC bearing FileNo.03 27 008 00161 AM 18 dated 06.09.2017 permittingimport of 26250 MT s of Pigeon Peas under 5 diferentcontracts for which 5 advance payments were made wasissued however on the request of the petitioner 5 separateRC s in respect of 5 diferent contracts having separateregistration numbers were issued to the petitioner reading oftrade notices dated 11.08.2017 and 31.08.2017 leave nodoubt in mind that the applicability of any relaxation grantedto the petitioner by way of amendment in the RC byrespondent No.6 pertained only to the quota prescribed forthe fnancial year 2017 18 and could never have beenextended beyond the said fscal year contracts submitted by on 08 04 2021 on 14 04 as.wpst.96678.20.docthe petitioner clearly indicated that its shipments were dueon 20 July 20 September 2017 or August 15 September2017 or August September 2017 and August September October 2017 in so far addendum No.1 to the contract dated26.05.2017 is concerned though the shipment period wasextended by 45 days the extended period was however stillwithin the fscal year 2017 18 and was therefore permissible hence the subsequent addendums submitted by thepetitioner after issuance of the RC were invalid. 5.2.He submitted that Petitioner s reliance onnotifcation No.04 2015 2020 dated 25.04.2018 on the basisof which fresh RC dated 04.05.2018 for import of Yellow Peasfor 200 MT was issued cannot be applied to the present caseas it was in respect of the quota pertaining to the fscal year2018 19 and released with restriction for the period until30.09.2018 as subsequently indicated in notifcationNo.15 2015 2020 dated 02.07.2018 absence of validityexplicitly on the RC dated 06.09.2017 issued to the petitionerdid not entitle the petitioner to claim extension relaxationbeyond the fscal year 2017 18 as it runs contrary to the spiritof the notifcation dated 05.08.2017 read with the two tradenotices dated 11.08.2017 and 31.08.2017 reliance wasplaced on the clarifcation issued by the Deputy Director ofGeneral of Foreign Trade vide letter dated 24.12.2020 to theCommissioner of Customs Nhava Sheva inter alia clarifyingthat in the case of the petitioner validity of the RC was onlyfor the fscal year 2017 18 as the provision for registering RCswas made with reference to notifcation No.19 2015 2020dated 05.08.2017 and the date of expiry is the date of lapseof notifcation i.e. 31.03.2018. He therefore prayed for1 on 08 04 2021 on 14 04 as.wpst.96678.20.docdismissal of the petition on the basis of the abovesubmissions. 6.Mr. Pradeep Jetly learned senior counselappearing on behalf of respondent Nos.1 to 3 in his reply atthe outset adopted the submissions made on behalf ofrespondent Nos.4 to 6 and has drawn our attention to theafdavit in reply dated 17.12.2020 fled by the DeputyCommissioner of Customs to contend that since the RC dated06.09.2017 does not bear any validity or expiry clause thematter was referred to the DGFT extension of the originalcontract was never intimated by petitioner and the contractwas never revalidated therefore the petitioner is not entitledto the reliefs claimed in the petition. 7.Mr. Vineet Naik learned senior counsel for thepetitioner in his rejoinder submission has drawn our attentionto the rejoinder afdavit and additional afdavits fled by thepetitioner dated 01.01.2021 08.01.2021 and 10.02.2021 andsubmitted that petitioner s contract was admittedly prior to05.08.2017 and the contract along with addendum No.1dated 07.08.2017 was registered RC was issued for thecontract and addendums are to be treated as part of thecontract the addendums were duly intimated to the DGFTimmediately on execution from time to time while makingapplication for amendment regarding addition of country oforigin there was no necessity for the petitioner to seekextension of term of shipment as it was within the tenure ofthe FTP the question of getting the addendums approvedcannot arise as they are to be treated as part of the contract.7.1.He submitted that notifcation dated 05.08.20171 on 08 04 2021 on 14 04 as.wpst.96678.20.docnowhere states that it is valid only till 31.03.2018 notifcationdated 11.08.2017 made it clear that while issuing notifcationdated 05.08.2017 the annual quota of 2 lakh MT for the fscalyear was already imported thus the contention that importwas to be completed within the fscal year is without merit validity of RC is co terminus with the validity of contractduring the tenure of the FTP contract of petitioner was notbased on letters of credit but on advance payment and hencereliance placed on para 1.05 of the FTP requiring thepetitioner to register with the jurisdictional R.A. was notapplicable to the petitioner s case.7.2.He submitted that on 29.10.2020 Deputy Directorof General of Foreign Trade Zonal Additional DGFT Mumbaiaddressed an email to the Deputy Director GeneralAct 1992[FTAct] as amended.1.01Duration of FTPThe Foreign Trade Policy2015 2020 w.e.f. 05.12.2017 incorporating provisionsrelating to export and import of goods and services shall come into force with efect from the date ofnotifcation and shall remain in force upto 31stMarch 2020 unless otherwise specifed. All exportsand imports made up to the date of notifcation shall accordingly be governed by the relevant FTP unlessotherwise specifed.1.02 Amendment to FTPCentral Government in exercise of powers conferredby Section 5 of FTAct 1992 as amended fromtime to time reserves the right to make anyamendment to the FTP by means of notifcation inpublic interest.1.03 Hand Book of ProceduresandAppendices & Aayat Niryat Formsmay bymeans of a Public Notice notify Hand Book ofProcedures including Appendices and Aayat NiryatForms or amendment thereto if any laying down theprocedure to be followed by an exporter or importeror by any Licensing Regional Authority or by anyother authority for purposes of implementingprovisions of FTAct the Rules and the Ordermade there under and provisions of FTP.1 on 08 04 2021 on 14 04 as.wpst.96678.20.doc1.04 Specifc provision to prevail over thegeneralWhere a specifc provision is spelt out in theFTP Hand Book of Proceduresthe same shallprevail over the general provision.1.05Transitional Arrangements(a)Any License Authorisation Certifcate Scrip instrument bestowing fnancial or fscal beneftissued before commencement of FTP 2015 20w.e.f. 05.12.2017 shall continue to be validfor the purpose and duration for which it was issued such License Authorisation Certifcate Scrip anyinstrument bestowing fnancial or fscal beneftAuthorisation was issued unless otherwisestipulated.(b)Item wise Import Export Policy isdelineated in the ITCSchedule I and Schedule IIrespectively. The importability exportability of aparticular item is governed by the policy as on thedate of import export. The date of import export isdefned in para 2.17 of HBP 2015 20. Bill of Ladingand Shipping Bill are the key documents for decidingthe date of import and export respectively. In caseof change of policy from free to restricted prohibited state trading or otherwise regulated the import export already made before the date ofsuch regulation restriction will not be afected.However the import through High Sea sales will notbe covered under this facility. Further the import export on or after the date of such regulation restriction will be allowed for importer exporter hasa commitment through Irrevocable CommercialLetter of Creditbefore the date of impositionof such restriction regulation and shall be limited tothe balance quantity value and period available inthe ICLC. For operational listing such ICLC theapplicant shall have to register the ICLC withjurisdictional RA against computerized receipt within15 days of imposition of any such restriction regulation. Whenever Government brings out apolicy change of a particular item the change will beapplicable prospectivelyunless otherwise provided for. 9.2.From the above it can be seen that paragraphNo.1.01 of chapter 1 of the FTP states that the FTP shall comeinto force with efect from the date of notifcation and shallremain in force upto 31.03.2020 unless otherwise specifed1 on 08 04 2021 on 14 04 as.wpst.96678.20.docas stated the said policy now stands extended upto31.03.2021. Paragraph No.1.05 relates to transitionalarrangements and clausethereof states that in case ofchange of policy from free to restricted prohibited statetrading or otherwise regulated the import export alreadymade before the date of such regulation restriction will notbe afected. It further states that any import export on orafter the date of such regulation restriction will be allowedfor the importer exporter if he has a commitment throughIrrevocable Commercial Letter of Creditbefore thedate of imposition of such restriction regulation. ClauseToor Dal underChapter 7 of the ITC2017 Schedule I(Import Policy).S.O.: In exercise of powers conferred by Section3 of FTAct 1992 read with paragraph 1.02and 2.01 of the Foreign Trade Policy 2015 2020 asamended from time to time the Central Governmenthereby amends the import policy of items of Chapter7 of the ITC(HS)2017. Schedule Iasunder:1 on 08 04 2021 on 14 04 as.wpst.96678.20.docExim CodeItemDescriptionExistingPolicyExistingPolicyConditionRevisedImportPolicyRevisedPolicyCondition0713 60 66 Pigeon PeasToorDalFree RestrictedSubject toPolicyCondition 2of thisChapter0713 90Other :0713 90 10SplitFree Free exceptPigeon Peas(CajanusCajan) Toor Dalwhich isrestrictedImport ofPigeon Peasis subject toPolicyCondition 2of thisChapter0713 90 90OtherFree Free exceptPigeon Peas(CajanusCajan) Toor Dalwhich isrestrictedImport ofPigeon Peasis subject toPolicyCondition 2of thisChapterPolicy Condition 2: Import shall be subject to anannualquota of 2 lakh MT as perprocedure to be notifed. This restriction will notapply to Government s import commitments underany bilateral regional Agreement MOU.2. Efect of this Notifcation: Import Policy ofPigeon PeasToor Dal under EXIMCodes 0713 60 00 0713 90 10 and 0713 90 90 isrevised from free to restricted . sd Director General of Foreign Trade E mail : dfgt@nic.in[Issued from File No. M 5012 300 2002 PC 2(A)] 9.4.By the above notifcation amendment in theimport policy of Pigeon Peas under chapter 7 of the IndianTrade Classifcation2017 for the FTP is made specifcallyin respect of import of Pigeon Peas whereby the import ischanged from free to restricted category. A further conditionis incorporated stating that import shall be subject to anannualquota of 2 lakh MT as per the procedure1 on 08 04 2021 on 14 04 as.wpst.96678.20.docto be notifed. Condition No.2 states that import shall besubject to an annual quota of 2 lakh MT. From this it can besafely inferred that the import under the FTP is for theduration of the FTP and not for the fscal year 2017 2018.9.5.Similarly trade notices No.13 2015 2020 dated11.08.2017 and No.15 2015 2020 dated 31.08.2017 issued bythe DGFT are also directly relevant to the present case andare extracted as under : Government of IndiaMinistry of Commerce and IndustryDepartment of CommerceDirectorate General of Foreign Trade11th August 2017TRADE NOTICE NO. 13Toor Dal under Chapter 7 ofthe ITC(HS) 2017. Vide the said notifcation importpolicy of Toor Dal has been modifed to " restricted subject to an annualquota of 2 lakh MTas per procedure to be subsequently notifed.2.However as per the import data base 2lakh MT of Pigeon Peas Toor Dal has already beenimported during the current fscal year. Therefore the requirement of issuing detailed procedure forimport of Toor Dal no longer exists and noauthorization in terms of para 2.08 of the ForeignTrade Policywill be issued. However importof Pigeon Peas Toor Dalfor which irrevocable Letters of Credit have beenopened prior to 5th August 2017 and subsequently1 on 08 04 2021 on 14 04 as.wpst.96678.20.docregistered with the jurisdictional RAs as perprovisions of Para 1.05 of the Foreign Trade Policy(2015 20) are permitted. sd Joint Director General of ForeignTrade E mail : shyama.roy@nic.in[Issued from File No. M 5012 300 2002 PC 2(A)] Government of IndiaMinistry of Commerce and IndustryDepartment of CommerceDirectorate General of Foreign Trade31st August 2017TRADE NOTICE NO.15Toor Dal under Chapter 7 of theITC(HS) 2017 and Trade Notice No 13 date 11.8.2017on the above subject. 2. Trade Notice No.13 dated 11.8.2017 hasprovided for importof PigeonPeas Toor Dal for which irrevocable Letters of Credithave been opened prior to 5th August 2017 andsubsequently registered with the jurisdictional F.As.as per provisions of Para 1.05 of the Foreign TradePolicyadvance payment some advance payment and rest amountpayable in Cash against Documentsorby relaxing the provisions of Para 1.05 hereby allowed registration of such Contracts withthe Regional Authorities of DGFT for import of PigeonPeasToor Dal wherein advancepayment had been madeprior to5.8.2017 and for which contract purchase invoiceand payment details certifed by the bank areavailable. 5. Further in relaxation of the provision oftime limit for registration of contracts as in Para 1.05of FTP such contracts must be registered with theJurisdictional Regional Authorities headed only by theAdditional DGFTs latest by 7th September 2017(5.00 p.m.). Applicants seeking relaxation in Para1.05 of FTPmay submit their application tothe jurisdictional RAs headed by Addl. DGFT forregistration of their contracts wherein advancepayment had been made prior to 5.8.2017 bymaking an online payment of Rs 2000 asapplication fee for seeking relaxation inPolicy procedure as per Appendix 2K.6.Accordingly such contracts shall beregistered by the Zonal RAs i.e Chennai Delhi Kolkata Mumbai and RAs of Ahmedabad Bangalore Hyderabad and Ludhiana as per their jurisdiction only after verifying that frms have entered intocontracts prior to the date of issuance of thenotifcation and where advance payments have beenmade against a contract purchase invoice andwhere the payment obiective intent is clearlymentioned in the payment transaction document bythe bank concerned as import of Pigeon Peas ToorDal. The registration will be permitted only with theapproval of the Head of Ofce. sd Joint Director General of Foreign TradeE mail : shyama.roy@nic.in[Issued from File No. M 5012 300 2002 PC 2(A)]"9.6. By trade notice No.13 2015 2020 dated11.08.2017 it was made mandatory for importers having anIrrevocable Letter of Credit opened prior to 05.08.2017 toregister with the jurisdictional Regional Authority as per the1 on 08 04 2021 on 14 04 as.wpst.96678.20.docprovisions of paragraph 1.05 of the FTP for permitting theirimport. This was because as 2 lakh MT of Pigeon Peas hadalready been imported during the said fscal yearpriorto 05.08.2017 and for which contract purchase invoice andpayment details certifed by the bank were available suchimporters were allowed to register with the jurisdictionalRegional Authority by 07.09.2017. Petitioner s case iscovered by this trade notice as can be seen. 10.In the backdrop of the above provisions the basicfacts pertaining to the petitioner s case need to be scrutinizedin order to appreciate applicability of the relevant provisionsof the FTP and notifcation dated 05.08.2017 read with thetwo clarifcatory trade notices dated 11.08.2017 and31.08.2017. Petitioner entered into the contract dated26.05.2017 with its foreign supplier i.e. Agricom InternationalGeneral Trading LLC for purchase of 22000 MT of PigeonPeas. Petitioner vide letter dated 05.09.2017 applied forregistration of contract for import of the entire quantity of22000 MT under trade notice dated 31.08.2017. It is seenthat the application dated 05.09.2017 was fled along withcopy of application submitted online copies of the fvecontracts alongwith addendums copies of swift messagesfrom bank indicating remittance as per contracts and copy ofbank certifcate issued by the bank under the category ofadvance payment being made prior to 05.08.2017.Respondent No.6 initially issued two RCs both dated06.09.2017 permitting import of 11000 MTs of Pigeon Peas2 on 08 04 2021 on 14 04 as.wpst.96678.20.docper certifcate. We have seen that both the RCs are identicalexcept for the bold letter "E" in the second RC. 11. For the sake of convenience one of the RCs dated06.09.2017 issued by the Foreign Trade Development Ofcerin the ofce of respondent No.6 is extracted below forreference as under : GOVERNMENT OF INDIAOFFICE OF THE ADDITIONAL DIRECTOR GENERALOF FOREIGN TRADENishta Bhavan 48 Vithaldas Thackersey Marg Churchgate Mumbai 20Telephone No.(022) 22017716 22038094 22033097 22031074 faxNo.022 22001255 E mail ID : mumbai dgft@nic.in.File No.03 27 008 00161 AM18REGISTRATION OF IRREVOCABLE LETTER OFCREDIT ADVANCE PAYMENT UNDER PARA 1.05Applicant s DetailsName of the Firm CompanyRIKA GLOBAL IMPEX LIMITEDAddress2ND FLOOR SAKHAR BHAVAN 230 NARIMAN POINT MUMBAI 400021E Code Number0207011061issuing Authority OFFICE OF THE DIRECTORGENERAL OF FOREIGN TRADE CALCUTTAToor Dal11000.00 MTSForeign Seller s Details2 on 08 04 2021 on 14 04 as.wpst.96678.20.docName of SellerPostal AddressCountry ofOriginAGRICOM INTERNATIONAL GENERAL TRADING LLIC. 341 A 3RD FLOOR GHURAIRBUSINESS TOWER P.O. BOX 118294 ALRIQQA DEIRA DUBAI U.A.E.SUDAN(C)Date of Receipt of Application :06.09.2017Date of Issue : 27.10.2017 sd Foreign Trade Development Ofcer For Addl. Director General of Foreign Trade.11.1.Perusal of the RC dated 06.09.2017 showsthat there is no validity period or expiry date stated therein.The RC is in respect of the FTP DGFT endorsing a copyto the Mumbai DGFT and Joint DGFT which supports thepetitioner s case. For the sake of convenience theclarifcation provided in the email is extracted as under."1.The application was made under TradeNotice No.15(2015 20) dated 31.08.2017.2.It is made against part advance paymentand rest amount payable against the documents.3.The RC was not issued against any otherdocument. 4.The application was made against advancepayment. There was no IC involved.5.The shipping date as per proforma contract addendums is 31st March 2021."15.1.Perusal of the clarifcatory email shows that itis clarifed by the DGFT that petitioner s application for importis made under the trade notice dated 31.08.2017 against partadvance payment and most importantly the shipping date asper froforma contract addendums is 31.03.2021. This datei.e. 31.03.2021 is relatable to the last addendum No.8 dated15.09.2020 under the original contract dated 26.05.2017which is annexed at page 80 of the paper book by thepetitioner. Thus this clearly surmises that the ofce of the2 on 08 04 2021 on 14 04 as.wpst.96678.20.docDGFT has all along taken due cognizance of the addendumsand issued the clarifcation. Copy of this email has beenplaced on record in the afdavit in rejoinder dated08.01.2021 fled by the petitioner. Respondent Nos.4 to 6have fled afdavit in reply dated 21.01.2021 of the DeputyDGFT to the rejoinder dated 08.01.2021 wherein they haveconveniently chosen not to deal with the above email.Additional afdavit dated 02.03.2021 is also fled byrespondent Nos.4 to 6 wherein once again a stoic silence ismaintained about the above email issued by the DeputyDGFT and a contrary argument of limiting the import only tothe fscal year 2017 18 is advanced. 16.In view of the above discussion it is clearlydiscernible that petitioner s import of 22000 MTs of PigeonPeas under the RCs issued to the petitioner is valid upto31.03.2021 and the case of the respondents that the same isrestricted only to the fscal year 2017 18 is clearly untenable.17.We may add that the respondents are statutoryauthorities and in the facts of the present case have notfunctioned responsibly. Petitioner s shipment of Pigeon Peasof 2650 MT had arrived at the port in September 2020.Petition was fled on 25.11.2020. Petitioner had pleadedurgency for hearing. On 08.02.2021 respondent Nos.4 to 6raised preliminary objection on maintainability by placinginternal communication dated 24.12.2020 addressed by theDeputy DGFT to the respondent No.3 issuing clarifcationregarding validity of the FTP 2015 2020. This letter isextracted as under: 2 on 08 04 2021 on 14 04 as.wpst.96678.20.doc "No.M.5012 300 2012 PC 2Vol Part VI P 9396Government of IndiaMinistry of Commerce and Industry Department of CommerceDirectorate General of Foreign Trade........Udyog Bhawan New DelhgiDated 24th December 2020 ToThe Ofce of the Commissioner of CustomsJawaharlal Nehru Custom House Nhava ShevaTal Uran District : RaigadMAHARASHTRA 400 707.Subject : Verifcation of Irrevocable Letter of Credit Advance Payment under para 1.05. of the FTP2015 2020 reg.Sir I am directed to refer to the letter No.S 26 Misc 184 2011 12 GR. I & IAdated24.09.2020 on the subject cited above seekingfollowing clarifcations from the O o Addl. DirectorGeneral of Foreign Trade Mumbai :i.Whether the above said ILC Advancepayment dated 27.10.2017 is still valid ii. If yes please furnish date of expiry of the same.iii. Whether the consignments covered under subject 03 bills of entry can be cleared against the said ILC or otherwise iv. Whether the said ILC Advance Payment can be utilized for further such imports if any by the importer 2.In this regard the following clarifcation isissued in seriatim :i.The validity of RC was only for the fscal year 2017 18 as the provision for registering RCs was made with reference toNotifcation No.19 2015 2020 dated 5th August 2017.ii.The date of expiry is the date of lapse of Notifcation i.e. 31.03.2018.iii.&Customs may like to take a decision based on the clarifcation furnished above.3.This issues with the approval of CompetentAuthority.2 on 08 04 2021 on 14 04 as.wpst.96678.20.doc Yours faithfullysd Deputy Director General of Foreign TradeTel : 2306 1562 Extn. 277E mail : mohapatra.sk@nic.incopy to : The O o Additional Director General ofForeign Trade Nishte Bhawan 48 VithaldasThackersey Marg Churchgate Mumbai 20.17.1.In the above letter the Deputy DGFT clarifed thatthe validity of the RC was only for the fscal year 2017 18 asthe provision for registering RCs was made with reference toNotifcation No.19 2015 2020 dated 05.08.2017 and the dateof expiry is the date of lapse of notifcation i.e. 31.03.2018.18.We have already dealt with in detail as alluded toherein above the issue of validity and expiry of the RC in thepetitioner s case. Though this letter is dated 24.12.2020 itwas not placed on record by respondent Nos.4 to 6 in theirreply afdavit dated 05.01.2021 and afdavit in reply topetitioner s rejoinder afdavit dated 21.01.2021. This letterwas tendered in court for the frst time on 08.02.2021 andafter hearing the parties the following order was passed bythis Court: "Date : 08.02.2021Mr. Rui Rodrigues learned counsel for respondentNos.4 5 and 6 has raised a preliminary objection asto maintainability of the writ petition qua the saidrespondents. He has taken us to the pleadings andprayers made in the writ petition to support hiscontention that no relief has been claimed againstrespondent Nos.4 5 and 6.2.In the course of raising preliminary objection Mr.Rodrigues has also tendered a document dated24.12.2020 issued by Deputy Director General ofForeign Trade and addressed to the Commissioner ofCustomsissuing clarifcations on theletter dated 24.09.2020.3.Since this document is not on record and mayhave a bearing on the outcome of the adjudication 2 on 08 04 2021 on 14 04 as.wpst.96678.20.docwe grant liberty to learned counsel for the petitionerto bring it on record by way of an additional afdavitsince the copy of the document was tendered inCourt by Mr. Rodrigues copy of which was alsofurnished to learned counsel for the petitioner.4.We also grant liberty to the petitioner to make anaverment in the said additional afdavit about thedocuments in the compilation sought to be reliedupon by the petitioner. Let the additional afdavit befled within two days.5.In so far the preliminary objection raised by Mr.Rodrigues is concerned certainly that will beconsidered by the Court but the Court intends to passa composite order on preliminary objection as well ason merit.6. Stand over to 12.02.2021."19. If the aforesaid objection raised by respondentNos.4 to 6 is to be countenanced then there was no reasonfor the respondents to clear the 25 shipments of thepetitioner after 31.03.2018 i.e. from 23.04.2018 to25.07.2020. The stand adopted by the respondentsespecially respondent Nos.4 to 6 is against the spirit andcontents of the FTP. Para 1.07 of Chapter 1 of the FTP 2015 2020 states that DGFT has a commitment to function as afacilitator of exports and imports. Focus is on goodgovernance which depends on efcient transparent andaccountable delivery systems. It further states that in orderto facilitate international trade DGFT consults various ExportPromotion Councils as well as Trade and Industry bodies fromtime to time. Thus the DGFT is required to act as a facilitatorwhich is however not seen in the present case. We may alsorefer to chapter 9 of the FTP which concerns with defnitionsand we may usefully extract the following defnitions tounderstand the terminology. Paragraph 9.23 defnes free and states that free as appearing in the context of import 2 on 08 04 2021 on 14 04 as.wpst.96678.20.docexport policy for items means goods which do not need any Authorisation license or permission for being imported intothe country or exported out. Paragraph No.9.43 defnes quota to mean the quantity of goods of a specifc kind that ispermitted to be imported without restriction or imposition ofadditional duties. Therefore the objection raised byrespondent Nos.4 to 6 that the notifcation dated 05.08.2017and the two trade notices dated 11.08.2017 and 31.08.2017would restrict the import of Pigeon Peas only upto 31.03.2018stands squarely rejected. Paragraph 9.47 defnes restricted to mean a term indicating the import or export policy of anitem which can be imported into the country or exportedoutside only after obtaining an Authorization from the ofceof DGFT. 20.Petitioner s import consignment of Pigeon Peas isa perishable commodity. The 2650 MT consignment hasbeen lying at Nhava Sheva port due to suspension ofclearance since October 2020. Petitioner has also prayed forreimbursement of costs of Rs.1 40 00 000.00 with interestincurred by the petitioner on bonding debonding andwithholding charges though no pleadings and material tothat efect has been pleaded or urged during arguments. Theonly pleading relating to loss costs incurred by thepetitioner is found in paragraph No.37 of the petition which isextracted as under : "The Petitioner states that shipment of approximately2650 MT of Pigeon Peas imported under the said FileNo.03 27 008 00161 AM18 dated 06.09.2017 hasalready arrived at the port and delivery of 8350 MTsof Pigeon Peas has been put on hold in view ofRespondent Nos.2 and 3 not permitting clearance ofthe imported Pigeon Peas. The Petitioner will besaddled with costs for the said stoppage by its sellerwhich is evident from letter dated 05.10.2020. The3 on 08 04 2021 on 14 04 as.wpst.96678.20.docPetitioner states that the stoppage of shipment is onPetitioners request and costs for which will have tobe borne by the Petitioner."20.1.Petitioner has referred to letter dated05.10.2020 received from its foreign supplier but it relates tofuture consignment and not the subject 2650 MT which isstranded at the port. Hence petitioner s claim for bonding debonding and withholding charges in the absence of anymaterial and or pleadings cannot be gone into. Needless tosay petitioner shall be at liberty to prosecute any suchremedy as available to it in the appropriate forum court inaccordance with law. 21. Thus on a thorough consideration of thesubmissions made by the parties and pleadings on record weare inclined to pass the following orders:9028987 dated02.10.2020 9028862 dated 02.10.2020 8843086 dated17.09.2020 8842485 dated 17.09.2020 8987173 dated29.09.2020 8982222 dated 28.09.2020 9008104 dated02.10.2020 9029328 dated 02.10.2020 and(xiii) 9029262 dated 02.10.2020 for homeconsumption to the petitioner forthwithConsidering the lapse of time from the date offling of the petition i.e. November 2020 till the3 on 08 04 2021 on 14 04 as.wpst.96678.20.docpresent order is passed we direct thatrespondents shall allow clearance of the balance8350 MT of Pigeon Peas if imported by thepetitioner for home consumption under the RCFile No.03 27 008 00161 AM18 dated 06.09.2017upto a period of 6 weeks from the date of passingof the present order.22. Ordered accordingly. 23.Consequently writ petition is allowed in the aboveterms. However there shall be no order as to costs. [ UJJAL BHUYAN J. ]3 

Summary: While allowing a writ petition, the HC asserted that statutory authorities are required to function responsibly since the focus is on good governance, which depends on efficient, transparent, and accountable delivery systems. In order to facilitate international trade, DGFT consults various Export Promotion Councils as well as Trade and Industry bodies from time to time. Thus, the DGFT is required to act as a facilitator in favour of good governance. This remarkable judgment was recently passed by Bombay High Court in the matter of Rika Global Impex Limited V Union of India and Ors. [WRIT PETITION (ST) NO.96678 OF 2020] by Honourable Justice Milind N. Jadhav and Justice Ujjal Bhuyan. Through this writ petition, the petitioner prayed for a writ of mandamus against Commissioner of Customs and Assistant Commissioner of Customs, Appraising Group – I &amp; IA to allow clearance of 2,650 MTs of Pigeon Peas covered under numerous Bill of Entry for home consumption which have been held up in spite of having a valid registration of Advance Payment Certificate which was issued by the Director-General of Foreign Trade permitting the import of Pigeon Peas under the Foreign Trade Policy 2015-2020 The facts of the case are, Petitioner, a company, is a regular importer and exporter of agricultural produce including Pigeon Peas from Sudan, Myanmar, Tanzania, and Mozambique. DGFT amended the import policy of certain items and import of Pigeon Peas was revised from ‘free’ to ‘restricted’ category, initially, the petitioner was provided an expansion and approval, however, after he executed 13 more bills of entry, they were not granted approval in spite of compliance with the rules. The total quantity of Pigeon Peas under the 13 bills of entry is 2650 MT clearance of which is the subject matter of the present writ petition. Thereafter petitioner requested the Deputy Commissioner of Customs (Import) to permit the petitioner to convert the bills of entry from home consumption to warehousing so as to enable the petitioner to transfer the goods to the actual warehouse who was the license holder in order to stop further losses being suffered due to non-clearance of the goods and due to its perishable nature. Being aggrieved by the non-clearance of the shipment of approximately 2650 MT of Pigeon Peas imported under the 13 bills of entry, the petitioner has approached this Court by the present petition. The Court stated, “Contention of the respondents that under para 1.05(b) petitioner has not registered with the jurisdictional RA due to change in the policy of import of Pigeon Peas from free to a restricted category cannot apply to the petitioner’s case as the petitioner’s contract was based on advance payment to the supplier and not on the basis of ICLC (Irrevocable Commercial Letter of Credit). Hence this submission of the respondents cannot be accepted.” The Court observed that “DGFT has considered the addendums while issuing the RC. In any case, by these addendums, terms of the contract are not substituted or changed, only the period of shipment is extended. In case of any material change in terms of a contract, the petitioner would have applied to the concerned ministry for seeking amendment. So, the RC is binding on the respondents until the completion of the import quota mentioned therein.” Thus, the Court opined that “it is clearly discernible that petitioner’s import of 22000 MTs of Pigeon Peas under the RCs issued to the petitioner is valid up to 31.03.2021 and the case of the respondents that the same is restricted only to the fiscal year 2017-18 is clearly untenable.”