Case law
Judgments from CESTAT, the High Courts and the Supreme Court, each summarised and linked to the provisions it applies.
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Telangana High Court · 2 May 2025
M/S. Rain Ch Carbon Vizag Ltd vs Office Of The Additional Director General Of Foreign Trade, Hyderabad And Others.
Legal principle
An Advance Authorisation under the Foreign Trade Policy extends to physical exports including supply to SEZ units, and an authority cannot refuse it by invoking a policy condition that contradicts the parent CAQM order it implements, nor by an unreasoned rejection that ignores the applicant's explanation.
Court decision
The court found the Deficiency Letter and Rejection Letter contrary to the CAQM Order dated 15.02.2024 and the DGFT notification implementing it, and held the rejection was not a reasoned order as it ignored the petitioner's 20.01.2025 explanation. It set aside both letters, remitted the matter for fresh consideration of the petitioner's entitlement to Advance Authorisation under FTP 2023 with a personal hearing, and directed the respondents to permit supply of CPC to Vedanta SEZ since duty on the RPC had already been paid on 29.03.2025 — while clarifying that eligibility remains subject to the pending review of the earlier three Advance Authorisations. The outcome was substantially in the petitioners' favour, with the writ petition disposed of on these terms.
Facts
M/s Rain CII Carbon (Vizag) Ltd, a Four-Star Export House manufacturing calcined petroleum coke (CPC) from raw petroleum coke (RPC) at its domestic tariff area unit in Visakhapatnam, applied on 31.12.2024 for a fourth Advance Authorisation to import 54,900 MT of RPC to manufacture and supply 36,600 MT of CPC to the Vedanta SEZ. The Additional DGFT, Hyderabad issued a Deficiency Letter dated 15.01.2025 and a Rejection Letter dated 05.02.2025, relying on revised policy condition 06(b)(iii) of DGFT Notification No.68/2023 dated 07.03.2024, which barred transfer of imported RPC to SEZ units and export of CPC by calciners. The petitioners had earlier been granted three Advance Authorisations under the same notification (14.05.2024, 13.08.2024, 28.10.2024) for CPC supplied to Vedanta SEZ. They replied on 20.01.2025 invoking the CAQM Order dated 15.02.2024 permitting deemed exports to SEZ units, but the Regional Authority rejected the application without referring to that explanation.
Key provisions
- Section 5, The Foreign Trade (Development and Regulation) Act, 1992 — Foreign Trade Policy.
- Section 16, The Foreign Trade (Development and Regulation) Act, 1992 — Review.