CASE TITLE – VI Exports India Private Limited v. Union of India
CASE NUMBER – LPA 147/2024 & CM APPLs.10786-88/2024
DATED ON – 30.04.2024
QUORUM – Hon’ble the Acting Chief Justice / Hon’ble Ms. Justice Manmeet Pritam Singh Arora
FACTS OF THE CASE
The Appellant in this case, is an exporter of rice and other agricultural products. The case is brought before the High Court to contest the issue of the exporter not being allowed to export 11,000 MT of rice to an overseas buyer, due to a Notification issued by the Department of Commerce, Government of India, dated 20th July, 2023, which came into effect at 21:57:01 hours. The said Notification was further amended vide Notification dated 29th August, 2023, wherein the time by when the details had to be entered into the Customs system was mentioned. Further, an additional category for exemption was also introduced wherein if the custom duty is paid before 21:57:01 hrs on 20 th July, 2023, then the consignment could be permitted for export. The Appellant was ready to ship 28,000 MT of rice at the start, in between 10th July, 2023 and 20th July, 2023 till around 12:07 hrs., the Appellant filed its 28 shipping bills on the Customs portal i.e., ICEGATE, which was set to be exported from the Kandla Port. The Appellant, therefore, made an application before the port authority at Kandla seeking permission to store 28,000 MT of rice. It is stated that, however, due to lack of space at the port, the authority granted permission for storage only to the extent of 11,000 MT of rice. And the remaining quantity i.e., 17,000 MT of rice, was stored at various private warehouses at Kandla itself. The Appellant had paid export duty for 17 shipping bills out of 28 within the stipulated time i.e., before 21:57:01 hrs on 20th July, 2023, the Appellant was permitted to export 17,000 MT of rice, covered under the said 17 bills. However, the export of the remaining 11,000 MT was not allowed as the customs duty had not been paid, though the bills had been duly submitted on the ICEGATE portal of the Customs. The Appellant at the time being distressed by the inability to export the remaining 11,000 MT of rice, filed a writ petition pleading that he had taken all steps within its control before the cut-off date and, therefore, invoking the doctrine of substantial compliance with the exemption conditions mentioned in the Notification has sought permission to export the said consignment; this request was then declined and the writ petition dismissed by the learned Single Judge vide impugned judgment.
CONTENTIONS BY THE APPELLANT
The Appellant stated that concerning to condition no. (ii) set out in the Notification, all the shipping bills were filed prior to issuance of the Notification, and the rotation number for the vessel was allotted on 18th July, 2023.However, the vessel had not berthed or arrived and anchored before the issuance of the Notification. It is stated after the issuance of the said rotation number on 18th July, 2023, the vessel could have anchored at the port only when permission was granted by the port authority, which is beyond the Appellant’s control. He stated that with respect to condition no. (iii) of the Notification, the consignment had to be handed over to the Customs before 21:57:01 hrs on 20th July, 2023, which he had fulfilled when the Appellant had applied to Customs for entrance and storage of the entire quantity of 28,000 MT on 15th July, 2023.But, due to lack of space at the port, permission was given to store only 10,525 MT of rice, and the Appellant was constrained to store the remaining quantity at private warehouses near the port. The Appellant further pleaded, that since they had done everything in it’s power, as per the doctrine of substantial compliance, the Appellant ought to be permitted to export the 11,000 MT of rice and should not be penalized for the situation beyond its control.
CONTENTIONS BY THE RESPONDENT
The Respondent stated that due to the global price hike of rice, there was also the increasing export of rice from India, which causes concern regarding the food security. Which then forced the issuance of the Notification. The Respondent further stated that Trade Notice issued by the Directorate General of Foreign Trade (DGFT) dated 18th August, 2023, it mentioned that the exemption conditions are independent of each other, and the export can be performed if they fill even any one of the said conditions. Which was not possible by the Appellant in this case, and due to which he also cannot rely upon the Doctrine of Substantial Compliance. He also stated that since there was no contention by the Appellant regarding the vires of the Notification, and also no infringement of Fundamental Rights of him, he cannot claim any Writ Petitions.
COURT ANALYSIS AND JUDGEMENT
Notification No. 20/2023, dated 26th July, 2023 (as modified by Notification dated 28th August, 2023)
The two exemptions that the Appellant is pleading that he comes under are (ii) and (iii).
(ii) where the shipping bill is filed and vessels have already berthed or arrived and anchored in Indian ports and their rotation number has been allocated before this Notification; The approval of loading in such vessels will be issued only after confirmation by the concerned Port Authorities regarding anchoring/berthing of the ship for loading of Non-basmati rice prior to the Notification. (iii) where Non-basmati rice consignment has been handed over to the Customs before 21:57:01 on 20.07.2023 and is registered in Customs system or where Non-basmati rice consignment has entered the Customs Station for exportation before 21:57:01 hours on 20.07.2023 and is registered in the electronic systems of the concerned Custodian of the Customs Station with verifiable evidence of date and time stamping of these commodities having entered the Customs Station prior to 21:57:01 hours on 20.07.2023. The period of export shall be upto 31.10.2023. It is admitted that the Appellant has neither challenged the validity of the Notifications dated 20th July, 2023 and 29th August, 2023, nor the constitutional vires of the said Notifications on the ground of it being violative of any fundamental rights of the Appellant. It is also admitted that the Appellant does not satisfy any independent condition of exemption in its entirety. It is stated that Respondent is obliged to enforce the said Notification uniformly on all the exporters so as to ensure that there is no allegation of arbitrariness or bias. The Appellant admits that the vessel had not been able to berth and anchor at the Port. The Appellant has not challenged the distinction carved out by the Respondent between (i) the vessels, which have anchored and berthed/arrived at the port; and (ii) vessels, which may have arrived in Indian waters, but are awaiting berthing and anchoring. Similarly, with respect to compliance of condition no. (iii) the Appellant has fairly admitted that it was unable to handover the consignment of 11,000 MT to the Customs before the appointed time nor the consignment had entered the Customs station for exportation before the appointed time. Each of the five independent exemptions have essential requirements which the applicant exporter must comply with for completing the export. The Appellant fails to comply with the essential conditions in each of the exceptions Due to the facts mentioned above, the High Court had stated that it was unable to find any merit in the appeal, because of which, the same was dismissed.
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Judgement Reviewed by – Gnaneswarran Beemarao
