Page 176 - ELT_15th July 2020_Vol 373_Part 2

158 EXCISE LAW TIMES [ Vol. 373

governed by the duty exemption scheme, it has been stipulated that
an advance licence is issued to allow duty free importable inputs
which are physically incorporated in the export products (para-
graph 4.1.3 of the Foreign Trade Policy for April, 2005). Similarly,
while issuing an exemption notification in relation to imports cov-
ered by advance licences, the Union Government in its notification
dated 10 September, 2004 (Notification 93/04) has specifically de-
fined materials to mean raw materials, components intermediates,
consumables, catalysts and parts which are required for manufac-
ture of resultant products. No such requirement was incorporated
in paragraph 3.7.6 of the Foreign Trade Policy. In other words, the
condition that the inputs which are imported must be used in the
export of the resultant product was not incorporated as part of par-
agraph 3.7.6 of the Foreign Trade Policy. In that view of the matter,
it is not possible to accept the contention of the Respondent that the
conditions which were imposed by the circular VBC 14 wp4499.07-
14.6, dated 8 May, 2007 were implicit in paragraph 3.7.6 of the For-
eign Trade Policy. We, therefore, come to the conclusion that the
conditions which were stipulated by the circular dated 8 May, 2007
were ultra vires paragraph 3.7.6 of the Foreign Trade Policy and
Customs notification dated 8 April, 2005 (Customs Notification
32/05).
11. Before concluding, it would be necessary to note that during
the course of the hearing of the Petition, Counsel appearing on be-
half of the Petitioner and the Respondent had placed before this
Court, a judgment of a Learned Single Judge of the Delhi High
Court in Indian Exporters Grievance Forum v. Union of India [Writ Pe-
tition (Civil) 2497 of 2008 decided on 5 August, 2010]. An appeal
against the judgment of the Learned Single Judge is pending before
the Division Bench and the judgment of the Learned Single Judge
has been stayed. In deciding this matter, we have independently in-
terpreted the terms of the Foreign Trade Policy and the relevant no-
tifications and circulars that hold the field. It is, therefore, not nec-
essary for this Court to make any observation in relation to the view
which has been expressed by the VBC 15 wp4499.07-14.6 Learned
Single Judge of the Delhi High Court.”
37. The upshot of the aforesaid discussion would be that the appeal is de-
void of any merit. This appeal is dismissed with costs.”
(Emphasis supplied)
30. In view of the aforesaid decision, categorisation or recategorization
cannot be done by the policy circulars, such exercise has to be undertaken by
specific amendment to the Foreign Trade Policy under Section 5 of the Act.
Hence also, the Public Notice No. 35/2015-2020, dated 26th September, 2019
(Annexure P-1) is beyond the power, jurisdiction and authority of DGFT.
31. In view of the aforesaid decision also, the power exercised by DGFT
under paragraph 1.03 of the Foreign Trade Policy, 2015-2020 is illegal and the
same deserves to be quashed and set aside.
32. In view of the aforesaid facts, reasons and judicial pronouncements,
we hereby quash and set aside the public notice dated 26th September, 2019

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