The main legal point established in the judgment is the entitlement of importers to duty-free imports based on the timing of payment and the application of the Foreign Trade Policy and the relevant sections of the Foreign Trade (Development and Regulation) Act, 1992.

Rajesh Bindal, J.

1. The petitioner has approached this Court by filing the present writ petition seeking issuance of a writ of certiorari praying for quashing of public notice No. 17 (RE-2006)/2004-09 dated 2.6.2006, issued by the Director General of Foreign Trade in exercise of powers conferred on him under paragraph 2.4 of Foreign Trade Policy, 2004-2009.

2. The petitioner, in the present case, has not challenged the terms of the amended policy as such. The only challenge is that amended terms of the policy cannot be made applicable to the transactions, which have already been completed before the amendment took place by giving the same retrospective effect.

3. Briefly, the facts, as pleaded in the petition, are that the petitioner is a proprietorship concern carrying on its business of importing and trading of vanaspati oil falling under Chapter Heading 15 of the Customs Tariff Act. The petitioner entered into an agreement with the foreign supplier on May 16, 2006 for supply of vanaspati oil. In pursuance of the agreement, advance payment was sent on May 26, 2006 through banking channel. Later, the goods were shipped on June 9, 2006, as is evident from the certificate of origin and bill of lading (Annexure P.2). The material reached CFS, Ludhiana in the third week of June, 2006. The clearance of goods has not been sought by the petitioner because, on enquiry, he came to know that he will be made liable to pay duty at the rate of 80% as against `Nil duty. This was for the reason that by way of impugned public notice dated June 2, 2006, the import of vanaspati oil from Sri Lanka, as per Indo-Sri Lanka Free Trade Agreement, has been exclusively permitted to National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED).

4. The import of goods into and export of goods out of the country is governed and controlled by the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter described as `the 1992 Act). The relevant provisions thereof are extracted below:

3. Powers to make provisions relating to imports and exports: (1) The Central Government may, by Order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports.

(2) The Central Government may also, by Order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the import or export of goods.

(3) All goods to which any Order under Sub-section (2) applies shall be deemed to be goods the import or export of which has been prohibited under Section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly.

Section 5: Export and import policy:-

The Central Government may, from time to time formulate and announce, by notification in the Official Gazette, the export and import policy and may also, in the like manner, amend that policy.

5 Section 3 of the 1992 Act enables the Central Government to make provisions for development and regulation of foreign trade by facilitating imports and increasing exports by Order published in the Official Gazette and also to make provisions of prohibiting, restricting or otherwise regulating import or export of goods in the like manner.

6. Section 5 of the 1992 Act enables the Central Government to formulate and announce by way of notification in the Official Gazette, the export and import policy. It is further provided that the amendment of the policy was also possible in the same manner.

7. The Government of India entered into an agreement with Sri Lanka, called as "Free Trade Agreement". In terms of the agreement, goods imported from Sri Lanka are not subject to customs duty. In furtherance to Free Trade Agreement, referred to above, Notification No. 26/2000-Cus., dated 1.3.2000 was issued in exercise of pow