Legal principle

Section 9A of the FTDR Act does not elide or negate the power of the Central Government to impose restrictions on imports under sub-section (2) to Section 3, so quantitative restrictions notified under Section 3(2) are valid without a Section 9A safeguard inquiry, and imports made in breach of such notifications are dealt with under the Customs Act, 1962.

Court decision

The Supreme Court (Sanjiv Khanna, J., with A.M. Khanwilkar and Dinesh Maheshwari, JJ.) upheld the impugned notifications and the trade notices and dismissed the importers' writ petitions (including intervenors'), holding the notifications valid as issued under the Central Government's power in Section 3(2) of the FTDR Act. It held that imports made relying on interim orders are contrary to the notifications and trade notices and would be dealt with under the provisions of the Customs Act, 1962; the importers could not claim bona fide belief; statutory appeals against suspension/termination of import-export codes were left undecided.

Facts

The Union of India, by notifications dated 29 March 2019 (S.O. 1478(E)–1481(E)) issued under Section 3 of the FTDR Act read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy 2015-2020, amended the import policy for items of Chapter 7 (ITC-HS) — Moong, Urad, Peas and Pigeon Peas/Toor Dal — placing them under restriction with annual fiscal-year quotas (1.5 lakh MT each for Moong, Urad and Peas; 2 lakh MT for Pigeon Peas) allotted per DGFT-notified procedure. The DGFT's Trade Notice dated 16 April 2019 prescribed the modalities, inviting online applications from intending millers/refiners with their own refining/processing capacity. Importers/traders filed writ petitions before different High Courts challenging the restrictions, and interim stays permitted imports without quota or licence; the Union of India transferred these petitions to the Supreme Court, which with the consent of parties heard and decided the challenges directly, including the connected challenge to the Trade Notice as excessive delegation.

Key provisions

• Section 9A, The Foreign Trade (Development and Regulation) Act, 1992 — Power of Central Government to impose quantitative restrictions.
• Section 3, The Foreign Trade (Development and Regulation) Act, 1992 — Powers to make provisions relating to imports and exports.
• Section 5, The Foreign Trade (Development and Regulation) Act, 1992 — Foreign Trade Policy.
• Section 11, Customs Act, 1962 — Power to prohibit importation or exportation of goods
• Section 6, The Foreign Trade (Development and Regulation) Act, 1992 — Appointment of Director General and his functions.
• Section 18A, The Foreign Trade (Development and Regulation) Act, 1992 — Application of other laws not barred.
• Section 16, The Foreign Trade (Development and Regulation) Act, 1992 — Review.
• Section 9, Customs Tariff Act, 1975 — Countervailing duty on subsidized articles
• Section 11, The Foreign Trade (Development and Regulation) Act, 1992 — Contravention of provisions of this Act, rules, orders and foreign trade policy.
• Section 15, The Foreign Trade (Development and Regulation) Act, 1992 — Appeal.
• Section 19, The Foreign Trade (Development and Regulation) Act, 1992 — Power to make rules.