Meaning of Pre Import Condition

(c) It is also unclear whether, in order to comply with the „pre-import condition”, applicants are required to provide records showing the unambiguous correlation between imported inputs and finished products. While it is possible for the automotive sector to comply with this requirement since its inventory of inputs in its exported products can be easily identified, applicants may not be able to identify inputs by date of importation once they are blended with the stock of inputs already purchased. 9.2 It was argued that it was therefore not clear whether the term „import precondition” covered all such trade differences or could be dealt with on an exceptional basis. All these situations/scenarios show the indeterminacy and arbitrariness with which the „import precondition” must be implemented. It has been argued that the principle developed by the courts is that a tax provision fails in the absence of uncertainty if it does not meet the test of section 14 of the Constitution. It has been argued that, by not defining the concept of `precondition for importation`, the contested decisions could be deleted on the ground of vagueness in the light of the doctrine of annulment. In support of this argument, counsel relied on the Supreme Court`s decision in Shreya Sin ghal v Union of India, AIR 2015 SC 1523. The disputed situation suffers from the irretrievable defect of indeterminacy and can therefore be abolished for that reason alone. 34. In addition, a special situation has been created in which the same inputs that are not subject to the „import precondition” with respect to the payment of basic duties, additional duties, school fees, anti-dumping duties, safeguard duties and product-specific transitional protective duties are subject to the import precondition in the case of the integrated tax and countervailing taxes. GST.

This nullifies the first part of paragraph 4.14, since the same inputs, if subject to the advance importation condition under certain levies, would be equivalent to importing the inputs provided they were imported in advance under the other levies. An anomalous situation had therefore arisen which rendered the second part of paragraph 4.14 incompatible with the first part and rendered the first part superfluous. Honarable HC of Gujarat High Court Case of Maxim Tubes Co. Pvt. Ltd. Vs UOI 2019 (2), TMI 1445 abolished the „pre-importation” condition (vs. Madras HC in the case of Vedanta Ltd Vs. UOI 2019 (1) TMI 85) 4. In other words, that person does not have access to the replenishment option. It is not wrong to mention that, under the prior authorization scheme, a person may first import the inputs and then export the products obtained or, alternatively, export the goods and then import the inputs as a reconstitution of the inputs used in the production of the exported products. Under the amended Act, the benefit of revival would not be granted to persons who intend to avail themselves of the IGST exemption. 8.1 It has been strongly argued that the „precondition for importation” nullifies virtually the entire system of prior authorization, since it is impossible to meet this condition.

It has been argued that Indian producers normally receive three to four months for the fulfilment of export orders on the basis of such a delivery period specified in the purchase contract/purchase order. It was emphasized that it was practically impossible to fulfil the obligation and obligation to deliver the goods within three to four months, which is the delivery period normally agreed in international trade. 8.2 Mr. Dave argued that, in addition, there is no benefit to the government from such an „import precondition”, since the money, if paid in the form of taxes, is authorized as a credit and must ultimately be returned, but in doing so, the funds are frozen. Therefore, such a requirement is ultra vires Articles 14 and 19(1)(g) of the Constitution of India. 8.13 It relied on the Supreme Court`s decision in Vasu Dev Singh v. Union of India, (2006) 12 SCC 753, for the proposal that the type of delegated legislation can be broadly classified as follows: (i) regulatory power; and (ii) exemption from the application of a statute. In the latter category, the scope of judicial review would be broader, since the legal authority, in exercising its statutory powers, must prove that it was done not only in its four corners, but also in that of the Supreme Court in P.J. Irani v. Madras State, AIR 1961 SC 1731. The court ruled that if a notice extinguishes the law itself; The notification can be deleted.