“Duty-free import cannot be claimed as a matter of right”

Not every hardship can be brought under the umbrella of ‘genuine hardship,’ says judge

Exporters are not entitled to claim as a matter of right the revalidation of advance authorisations given to them by the Directorate General of Foreign Trade (DGFT) for importing raw materials without payment of customs duty, the Madras High Court Bench here has held.

Justice M.M. Sundresh passed the ruling while dismissing a writ petition filed by Madura Coats Private Limited here seeking a direction to the Directorate to accept applications made by the company in February 2011 to revalidate authorisations which expired in June 2008 and March 2009.

The judge pointed out that Chapter IV of the Foreign Trade Policy (FTP) allows duty-free import of raw materials used by the exporters in their products.

Advance authorisations issued for such imports are initially valid for two years and can be revalidated for six more months from the date of expiry.

However, in the present case, the petitioner company had made a request for revalidation after two years on the ground that the delay was caused due to upgrading the software in its unit. It also claimed that the DGFT ought to have revalidated the authorisation by using the powers conferred on it.

Agreeing that the FTP had conferred powers on the DGFT to order revalidation after considering ‘genuine hardships,’ the judge said that every hardship cited by exporters for justifying the delay in making the request cannot be brought under the umbrella of ‘genuine hardship.’

“It is not in dispute that the petitioner is having a hardship but that would be the case involving every other entity. A hardship will have to be genuine, particularly, when it pertains to seeking a concession on a validation which already expired. The petitioner is not entitled for revalidation as a matter of right,” the judge observed.