Civil Appeal Nos. 554, 658, 1587, 1589 of 2006, Transfer Case (Civil) Nos. 32, 33, 36 of 2007, 1, 3 of 2008, 49 of 2009, Writ Petition (Civil) Nos. 27 of 2008, 343 of 2009, 246 of 2010 and Transfer Case (Civil) No. 107 of 2015 (Arising out of Transfer Petition (Civil) No. 568 of 2014). Case: Director General of Foreign Trade and Ors. Vs Kanak Exports and Ors.. Supreme Court (India)
| Case Number | Civil Appeal Nos. 554, 658, 1587, 1589 of 2006, Transfer Case (Civil) Nos. 32, 33, 36 of 2007, 1, 3 of 2008, 49 of 2009, Writ Petition (Civil) Nos. 27 of 2008, 343 of 2009, 246 of 2010 and Transfer Case (Civil) No. 107 of 2015 (Arising out of Transfer Petition (Civil) No. 568 of 2014) |
| Counsel | For Appellant: Pinki Anand, ASG, Yashank Adhyaru, Sr. Adv., Ajay Sharma, S.S. Rawat, Rashmi Malhotra, Kiran Bhardwaj, D.S. Mahra, A. Subba Rao, Annam D.N. Rao, Sudipto Sircar, Neelam Jain, Vaishali R., Annam Venkatesh, Ankita Chadha, K.L.D.S. Vinober, Tarun Gulati, Kishore Kunal, Sparsh Bhargava, Manish Rastogi, Praveen Kumar, Shashi Mathews, ... |
| Judges | A.K. Sikri and Rohinton Fali Nariman, JJ. |
| Issue | Foreign Trade (Development and Regulation) Act, 1992 - Sections 3, 3(2), 5, 6, 6(3), 15, 16, 19, 19(2), 90, 91, 93; Imports and Exports (Control) Act, 1947; General Clauses Act - Sections 14, 21; Customs Act, 1962 - Sections 25, 25(1); Bombay Rents, Hotel and Lodging House Rates Control Act - Section 29(2); Conveyancing and Law of Property Act,... |
| Citation | 2015 (326) ELT 26 (SC) |
| Judgement Date | October 27, 2015 |
| Court | Supreme Court (India) |
Judgment:
A.K. Sikri, J.
Civil Appeal No. 554 of 2006
Civil Appeal No. 658 of 2006
Civil Appeal No. 1587 of 2006
Civil Appeal No. 1589 of 2006
Transfer Case (Civil) No. 36 of 2007
Transfer Case (Civil) No. 1 of 2008
Transfer Case (Civil) No. 3 of 2008
Transfer Case (Civil) No. 49 of 2009
Writ Petition (Civil) No. 343 of 2009
Writ Petition (Civil) No. 246 of 2010
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Export Import (EXIM) Policy 2002-2007 was framed by the Central Government Under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter referred to as the 'Act'), which came into force with effect from April 01, 2003. The main purpose and objective of this Policy was to boost the exports. In furtherance of the same, a Special Scheme containing the provisions thereof was incorporated therein which gave certain kind of incentives to the exporters of some specified items. However, some amendments were made thereto vide Notification No. 28 dated January 28, 2004. On the same day, Public Notice No. 40(RE-2003)/2002-2007 was also issued in exercise of powers conferred under the provisions of Para 2.4 of the said Policy, which was followed by Notification No. 38 dated April 21, 2004 and Notification No. 40 dated April 23, 2004.
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Vide Notification No. 28 dated January 28, 2004, the Central Government sought to amend certain provisions of the EXIM Policy by inserting Notes 1 to 5, which was unpalatable to the exporters of the goods mentioned therein as, according to them, under the guise of the said Notes, some benefits which had already accrued to these exporters under the EXIM Policy were taken away. Vide Public Notice dated January 28, 2004, the Government announced exclusion of export performance in relation to four classes of goods mentioned in para 2 thereof from computation of the entitlement under the Scheme and, at the same time, sought to disallow the import of agricultural products falling under Chapters I to XXIV of ITC (HS) under the said scheme. Thereafter, Notification No. 38 dated April 21, 2004 was published Under Section 5 of the Act on the same lines on which Public Notice dated January 28, 2004 was issued. The exporters of these goods, naturally, felt aggrieved thereby. There was an innocuous amendment to Notification No. 38 dated April 21, 2004 wherein in addition to the Director General of Foreign Trade (for short, 'DGFT') as an Officer to enforce these Notifications, ex-officio Additional Secretary to the Government of India was also added. All such exporters who were affected thereby filed writ petitions in various High Courts, particulars whereof shall be taken note of hereinafter at the appropriate stage.
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The Bombay High Court in Writ Petition No. 2397 of 2004, decided on July 04, 2005, has given partial relief to the exporters/writ Petitioners. The Gujarat High Court has substantially affirmed the validity of these Notifications while giving relief on one particular aspect. Insofar as judgments of Bombay High Court and Gujarat High Court are concerned, both the Union of India as well as the writ Petitioners preferred Special Leave Petitions, in which leave was granted, and these are now converted as Civil Appeal No. 658 of 2006 and Civil Appeal 554 of 2006 respectively. That apart, the Single Judge of the Gujarat High Court in one of the cases dismissed the writ petition and the LPA was filed by the said Petitioner before the Division Bench of the High Court. Since the issue involved in these appeals is the same, which is raised in the LPA in the Gujarat High Court and still pending in the writ petitions filed in various High Courts, transfer petitions were filed by the Union of India seeking transfer of all those cases and to be heard along with these two appeals. Those transfer petitions were allowed. This is how all these cases are bunched together and heard simultaneously as the issue is substantially the same in all these matters.
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With this background reflecting the nature of these cases, we now proceed to discuss the main provision of the EXIM Policy and how the aforesaid Notifications have amended the provisions of that Policy. That would give an indication as to what kind of grievance is raised by these exporters in challenging the validity of these Notifications.
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The Act was passed to provide for the development and Regulation of foreign trade by facilitating imports into, and augmenting exports from India and for matters connected therewith or incidental thereto. The Statement of Objects and Reasons of this Act stipulates that foreign trade is the driving force of economic activity. Technology, investment and production are becoming increasingly interdependent upon each other and foreign trade brings these elements together and spurs economic growth. The Imports and Exports (Control) Act, 1947 was made in different circumstances. Although it has been amended from time to time, the Act does not provide an adequate legal framework for the development and promotion of India's foreign trade. Besides, in July, 1991 and August, 1991, major changes in trade policy were made by the Government of India. The goals of the new trade policy are to increase productivity and competitiveness and to achieve a strong export performance. The Exports and Import Policy is a vital part of trade policy. The basic law governing foreign trade must serve as an instrument to create an environment that will provide a strong impetus to exports, facilitate imports and render export activity more profitable. It has, therefore, been considered necessary to enact a new law repealing the existing law. The Act intends to achieve these objectives.
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In order to achieve the aforesaid objectives, power is given to the Central Government Under Section 3 of the Act to make provisions relating to imports and exports with primary focus on the development and Regulation of foreign trade. Further, Section 5 specifically empowers the Central Government to formulate and announce the EXIM Policy. It reads as under:
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Export and import policy. - The Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the export and import policy and may also, in the like manner, amend that policy.
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In order to carry out the purposes of this Act, DGFT is to be appointed by the Central Government as per the provisions of Section 6 of the Act. In addition to carrying out the purposes of this Act, DGFT is also supposed to advise the Central Government in formulation of the EXIM Policy. He is also made responsible for carrying out that Policy. However, Sub-section (3) of Section 6 empowers the Central Government to give the aforesaid functions of the DGFT even to other Officer subordinate to DGFT, except for powers conferred Under Sections 3, 5, 15, 16 and 19 of the Act.
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As already noted above, Sections 3 and 5 give certain powers to the Central Government and, therefore, these powers have to be exercised by the Central Government only and cannot be delegated to DGFT or an Officer subordinate to him. Sections 15 and 16 relate to appeal and revision which can be filed against the orders passed by the Adjudicating Authority against any person committing contravention of provisions of the Act, Rules, Orders and EXIM Policy. Appeal lies to DGFT if the Adjudicating Authority, who passes the order, is an Officer subordinate to DGFT. In those cases, where the Adjudicating Officer is DGFT himself, appeal lies to the Central Government. Under Sections 16, revisionary powers are conferred upon the Central Government. These powers of appeal and revision also cannot be delegated by virtue of Section 6(3) of the Act. Section 19 again confers power upon the Central Government to make Rules for carrying out the provisions of the Act generally and in respect of various matters specifically enumerated in Sub-section (2) of Section 19. This power of the Central Government also cannot be delegated.
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It may be noted that Under Section 5 of the Act, the Central Government has been formulating EXIM Policies from time to time. The Policy with which we are concerned is the EXIM Policy for the period 2002-2007, which was substituted by EXIM Policy 2004-2009.
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EXIM Policy of 2002-2007 was announced and came into force from April 01, 2002. Amendment to this Policy was notified on March 31, 2003 and the revised edition of the Policy was to come into force from April 01, 2003. Even though the Central Government is generally entitled and empowered to carry out amendments in this Policy from time to time, in the EXIM Policy 2002-2007, such a right was specifically reserved stating that 'however, the Central Government reserves the right in public interest to make any amendments to this Policy in exercise of powers conferred by Section 5 of the Act'. It was also mentioned that such amendments would be made by means of a notification published in the Gazette of India.
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Chapter I of the Policy, which gives 'Introduction', had made transitional arrangements vide para 1.2 thereof clarifying that any notifications made or public notices issued or anything done under the provisions of EXIM Policy and in force immediately before the commencement of the said Policy shall continue to be in force, insofar as those notifications, etc. are not in consistent with the provisions of the instant Policy. It was also clarified that licences/certificates/permissions issued under the earlier Policy would continue to be followed for the purpose for which such licences/certificates/permissions were issued, unless otherwise stipulated. Para 1.4 enshrines the objectives which led to formulation of such a Policy and reads as under:
1.4 The principal objectives of this Policy are:
(i) To facilitate sustained growth in exports to attain a share of at least 1% of global merchandise trade.
(ii) To stimulate sustained economic growth by providing access to essential raw materials, intermediates, components, consumables and capital goods...
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