Shashi Cables Ltd. Vs. Directorate General of Foreign Trade (DGFT) and Ors. - (High Court of Delhi) (26 Sep 2018)

Powers of Policy Relaxation Committee, while making its recommendations are wide and are purely discretionary

MANU/DE/3575/2018

Civil

The Petitioner has filed the present petition challenging impugning orders. By the impugned order dated 23rd February, 2016, the Policy Relaxation Committee ('PRC') - constituted in terms of Paragraph 2.57(b) of the Foreign Trade Policy (FTP) - of the Directorate General of Foreign Trade (DGFT) rejected the Petitioner's application for the second extension of validity of the Duty Free Import Authorisation on the ground that, the Petitioner was unable to establish a case of genuine hardship. By the impugned order dated 6th September, 2016, the PRC rejected the Petitioners application of review of the impugned decision dated 23rd February, 2016. And, by the impugned order dated 6th July, 2017, the Director General of Foreign Trade (DGFT) rejected the Petitioner's request after affording the Petitioner a hearing. The only question that falls for consideration is whether, in the facts of the present case, the decision of the PRC is arbitrary or unreasonable and warrants interference in these proceedings.

Revalidation of import authorization is not as a matter of routine but has to be considered on merits. The Petitioner had sought for such validation and his request was accepted. It is not in dispute that, in terms of the prevailing FTP and HBP, the Petitioner is not entitled for extension of the validity of the term of the import authorization beyond the period of six months. It is in this context that the Petitioner had applied for relaxation of the said condition in terms of Paragraph 2.58 of the FTP. As is apparent from the plain language of the Paragraph 2.58 of the FTP, the DGFT is empowered to grant exemption, relaxation or relief from the provisions of FTP or any procedure if he so deems fit. However, it is important to note that such exemption, relaxation or relief can be only granted if it is in public interest and on the grounds of genuine hardship and adverse impact on trade.

The Petitioner had not set up a case of any unexpected hardship or any emergent situation that had precluded the petitioner from completing the imports. Essentially, the Petitioner had sought extension of the Duty Free Import Authorization on the ground of commercial expediency. The PRC was of the view that since the petitioner had not set up a case of genuine hardship, it was not entitled to any relaxation in terms of Paragraph 2.58 of the FTP.

The Division bench of this Court in NOCIL Ltd. v. The Policy Relaxation Committee & Ors. had observed that "the powers of the PRC, while making its recommendations are wide and are purely discretionary". This Court finds no infirmity with the decision of the PRC exercising its discretion and rejecting the petitioner's request for further extension.

The DGFT was also of the view that, the Petitioner had not provided any reasons which indicated any genuine hardship. Even if the reasoning indicated by the DGFT is ignored, there is no denying the fact that the Petitioner had not made out a case of genuine hardship. DGFT has provided cogent reasons for not extending the term of the Duty Free Import Authorization. The Petitioner was provided sufficient time to complete the imports. Petition dismissed.

Relevant : NOCIL Ltd. v. The Policy Relaxation Committee & Ors.: MANU/DE/1944/2017: 2017 (165) DRJ 170

Tags : EXTENSION DUTY FREE IMPORT AUTHORISATION