The Delhi High Court recently affirmed the sustenance of the existing allocation of Tariff Rate Quota ( TRQ ) on the import of Bullion, in accordance with the Minutes of the Meeting held on 8th November, 2024 for the review of the UAE-India Comprehensive Economic Partnership Agreement ( CEPA ).
The Decision was rendered by the Delhi High Court while jointly disposing of multiple Writ Petitions pertaining to the same subject matter, with the petition filed by MS Kaka Gold LLP treated as the leading petition, while referring to the other Petitions to the extent so required.
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The CEPA executed on 18th February, 2022 by the Governments of India and the United Arab Emirates included specific tariff commitments for the trade of goods; it was agreed that tariff concession of 1% shall be provided to Indian Gold Importers in a phased manner, dependent on the quantity of gold bullion available for allotment each year.
Initially, gold TRQ of 160 tonnes had been decided for the Financial Year (F.Y.) 2024-25. The Petitioners applied for TRQ in CEPA for the import of gold bars subsequent to which a meeting was held at the Directorate General of Foreign Trade (DGFT) Headquarters to review the allocation of bullion TRQs under CEPA for the F.Y. 2024-25.
Based on the findings in the review meeting, the allocated TRQ were subject to revision on the basis of the extent of utilization of the previously allocated TRQ. While some of the Petitioners had utilized less than 25% of the allocated TRQ up to 30th September 2024, others had utilized 25% to 75% of the allocations. In light of such observations, the Meeting Committee halved the allocated TRQ for those who had utilized less than 25% while no revision was made for the petitioners who had utilized 25% to 75% of the allocations.
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Senior Counsel Tarun Gulati, appearing for the Petitioners contended such decision to be unreasonable and arbitrary as the Petitioners had not been afforded any opportunity of hearing or notice about the mid-year review of the TRQ Allocations. Furthermore, since the petitioners were not privy to the criteria for the revision of the TRQ, they had no reason to believe that they were required to adhere to the criteria notified in the meeting held on 8th November, 2024.
Senior Counsel Gulati further prayed that the Respondents be directed to reconsider the matter afresh after provision of due opportunity of hearing to the Petitioners on a case-to-case basis.
Central Government Standing Counsels, Shiva Lakshmi and Ripudaman Bhardwaj opposed the Petitions referencing Public Notice No. 12/2023 dated 28th April, 2024 pertaining to CEPA F.Y. 2023-24, which provides that TRQ allocations may be subject to a 6-monthly review.
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The Single-Judge Bench of Justice Sanjeev Narula observed that the impugned review can be deemed a ‘blind’ review given that no specific criteria were specified in the Minutes of Meeting with respect to the potential allocation; furthermore the Bench observed that the referenced public notice pertains to F.Y. 2023-24 and that there is no similar notice for the F.Y. 2024-25.
Granting relief to the Petitioners, the Delhi High Court directed the DGFT to examine all the issues raised by the Petitioners in the present petitions and to issue a fresh decision on the basis of the findings.
Since no re-allocations had been made pursuant to the impugned Minutes of Meeting, the existing allocations were directed to be maintained until a final decision comes out of the review process.
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