Full Text
HIGH COURT OF DELHI
Date of Decision: 26.09.2025
JUDGMENT
135. Ms. Saumya Tandon, CGSC and Mr. Gaurav Singh Sengar, Adv. for respondent nos.[1] and 3 in item no.110. Ms. Rukhmini Bobde, CGSC along with Mr. Jatin Dhamija, Mr. Amlaan Kumar and Mr. Vinayak Aren, Advocates for R-1 in item Nos.114, 119, 121 and 123. Ms. Pratima N. Lakra, CGSC along with Mr. Chandan Prajapati, Mr. Shivansh Bansal, Mr. Shailendra Mishra, Ms. Kanchan Shakya and Ms. Raunak, Advocates for R-1 to R-3 in item No.131. Ms. Manisha Agrawal Narain, CGSC along with Ms. Aditi Singh, Mr. Navneet Saharan and Mr. Nipun Jain, Advocates for UOI for Item No.146. Ms. Shiva Lakshmi, Mr. Madhav Bajaj, Ms. Katyani Joshi and Ms. Esha Kumar, Advocates for UOI in item Nos.117, 118, 120, 125, 127 and 128. Ms. Radhika Bishwajit Dubey, CGSC along with Ms. Gurleen Kaur Waraich, Mr. Kritarth Upadhyay and Ms. Aprajita Verma, Advocates for DGFT in item No.103 and 159. Mr. Piyush Beriwal, Ms. Jyotsna Vyas, Ms. Ruchita Srivastava and Ms. Amisha P Dash, Advocates for DGFT in Item No.154. Mr. Premtosh K. Mishra, CGSC along with Mr. Prarabadh Tiwari, Advocates for DGFT in item no.101. Mr. P.S. Singh, CGSC, Mr. Kumar Saurabh, Ms. Minakshi Singh and Mr. Rajnish Sharma, Advs. for UOI in item nos.136, 138 and 139. Mr. Aditya Singla, SSC, CBIC and Ms. Shreya Lamba, Advs. for respondents in item nos.101 & 135 (through VC) Mr. Amit Tiwari, CGSC, Ms. Ayushi Srivastava, Mr. Ayush Tanwar and Mr. Arpan Narwal, Advs. for respondent /DGFT in Item Nos.115, 116, 132, 133, 140 and 148. Mr. Ankur Mittal, CGSC, Mr. Aviraj Pandey, Advs. for DGFT in item no.152. Mr. Shubham Tyagi, SSC, CBIC, Ms. Navruti Ojha, Ms. Anupam Ojha, Mr. Rishabh Chauhan, Mr. Harish Saini, Advocates for CBIC in Item Nos.114, 115, 116, 119, 121, 123, 124 and 129. Mr. Shoumendu Mukherjee, Sr. Panel Counsel and Mr. Rudra Paliwal, GP, Ms. Megha Sharma, Mr. Aniruddha Ghosh and Mr. Mehul Sachan, UOI in item nos.155. Mr. Abhishek Gupta, CGSC and Mr. Kumar Kartikeya, Adv., DGFT in item no.111 and 158. CORAM: HON'BLE MR.
JUSTICE SACHIN DATTA SACHIN DATTA, J. (ORAL
1. The present petitions have been filed by the petitioners challenging rejection/ short allocation upon their applications for allocation of Tariff Rate Quota (TRQ) for import of gold under the Comprehensive Economic Partnership Agreement (‘CEPA’) executed between India and the United Arab Emirates (UAE) for the financial year 2025-26.
2. Specifically, the petitioners assail the decision of the Directorate General of Foreign Trade (DGFT) as recorded in Paragraph Nos. 6, 7, 8 and 9 of the Minutes of Meeting dated 29.04.2025, held at the DGFT Headquarters, which laid down the eligibility conditions and allocation modalities for TRQ for the import of gold at concessional rates under the India – UAE CEPA.
3. Although the factual conspectus is identical across matters, for the sake of convenience, W.P.(C) 11391/2025 is taken as the lead matter for the purpose of reference to the factual conspectus and relevant documents.
4. The grievance of the petitioners pertains to the following:
(i) Imposition of a minimum turnover threshold of Rs. 25 Crores over the preceding three financial years as a condition for eligibility for grant of TRQs;
(ii) Non-refundability of application fees in cases of unsuccessful applicants;
(iii) Blanket rejection of the petitioners’ applications without affording an opportunity of hearing [in W.P.(C) 11391/2025, W.P.(C) 11338/2025, W.P.(C) 11390/2025, W.P.(C) 11414/2025, W.P.(C) 7560/2025, W.P.(C) 7694/2025, W.P.(C) 7720/2025, W.P.(C) 7753/2025, W.P.(C) 7783/2025, W.P.(C) 7815/2025, W.P.(C) 7822/2025,W.P.(C) 7827/2025, W.P.(C) 7830/2025, W.P.(C) 7835/2025, W.P.(C) 7946/2025, W.P.(C) 7952/2025, W.P.(C) 7954/2025, W.P.(C) 7974/2025, W.P.(C) 7975/2025, W.P.(C) 7977/2025, W.P.(C) 8657/2025, W.P.(C) 8663/2025, W.P.(C) 8673/2025, W.P.(C) 8674/2025, W.P.(C) 8693/2025, W.P.(C) 8694/2025, W.P.(C) 8699/2025, W.P.(C) 8707/2025, W.P.(C) 8709/2025, W.P.(C) 8714/2025, W.P.(C) 8733/2025, W.P.(C) 8736/2025, W.P.(C) 8738/2025, W.P.(C) 8742/2025, W.P.(C) 8734/2025, W.P.(C) 8744/2025, W.P.(C) 8745/2025, W.P.(C) 8750/2025, W.P.(C) 8983/2025, W.P.(C) 9075/2025, W.P.(C) 9076/2025, W.P.(C) 9151/2025, W.P.(C) 9154/2025, W.P.(C) 9155/2025, W.P.(C) 9158/2025, W.P.(C) 9159/2025, W.P.(C) 9180/2025, W.P.(C) 9182/2025, W.P.(C) 9184/2025, W.P.(C) 9197/2025]; and
(iv) Short allocation of the petitioners’ applications without affording an opportunity of hearing [in W.P.(C) 11339/2025, W.P.(C) 11347/2025, W.P.(C) 11349/2025, W.P.(C) 11386/2025, W.P.(C) 11389/2025, W.P.(C) 11396/2025, W.P.(C) 11400/2025, W.P.(C) 11417/2025, W.P.(C) 11436/2025 ].
5. The present petitions have been filed in the backdrop of the CEPA executed between India and UAE on 18.02.2022, wherein, specific tariff commitments were made by both the governments in relation to trade in goods. As per Article 2.[4] (2) of the CEPA, the Indian Government agreed to eliminate customs duties on goods originating from UAE in accordance with Annexure 2A thereto. Under the said agreement, a phased tariff concession/relief of 1% was envisaged for Indian gold importers. Accordingly, for the 4th year i.e., FY 2025-26, quantity of gold bullion available for allotment was prescribed at 180 metric tonnes.
6. To operationalize the CEPA obligations, DGFT issued Customs Notification No.22/2022 dated 30.04.2022 followed by Public Notice NO. 06/2015-2020 dated 01.05.2022, amending Para 2.107 of the Handbook of Procedures 2015-2020 and Appendix 2A of the Foreign Trade Policy (FTP) 2015-2020. The amendment incorporates items under the TRQ under CEPA.
7. Initially, the following eligibility conditions were contemplated for availing TRQ benefits under ITC(HS) Code 7108: i. Eligible applicant must be a jewellery manufacturer; ii. The applicant must be engaged in the business of goods falling under the following ITC(HS) codes: 7108 (Gold); 7113 (Articles of jewellery and parts thereof); 7114 (Articles of goldsmiths’ or silversmiths’ wares); 7118 (Coin); iii. The jewellery manufacturer should have an average annual turnover of at least Rs. 25 Crores over the last three financial years; iv. The turnover of such jewellery manufacturer should either: • Comprise 90% of items manufactured/sold under HS Code 7113, or • Comprise a quantity of items manufactured/sold under HS Code 7113 that is at least equal to the TRQ quantity bid (subject to the maximum annual TRQ allocation). v. The jewellery manufacturer must possess a valid GST registration and must have filed all applicable GST returns.
8. Vide subsequent Public Notices, it was decided that the allocation of the TRQ shall be done on an annual basis.
9. Thereafter, Public Notice No.06/2023 dated 17.04.2023 issued by the DGFT, removed the restriction limiting eligibility to jewellery manufacturers, thereby enabling all importers holding a valid Importer Exporter Code (IEC) to apply for TRQ.
10. It is the contention of the petitioners that the clear intent in rationalizing the eligibility condition/s was to make the allocation of TRQ more broad-based.
11. The allocation of bullion TRQ under CEPA for FY 2024-25 was subject matter of consideration in W.P.(C) 16809/2024 and Batch Matters. The controversy arose inasmuch as the originally allocated TRQ was sought to be revised based on the extent of utilization. Vide order dated 05.12.2024, the said writ petitions were disposed of with the following directions:-
thereof.
8 Furthermore, it is undisputed that as of today, no re-allocations have been made pursuant to the impugned Minutes of Meeting in the present proceedings. Therefore, it is directed that the current allocations be maintained until a decision is made following the review process. The above exercise shall be carried out within three weeks from today.
9. It is clarified that the views expressed by this Court are of a prima facie nature. Therefore, the Respondents, while taking the same into consideration, shall also examine each case on its own merits and take a fresh decision, in accordance with law.
10. In the event that the Respondents are inclined to accept the Petitioners’ requests, the DGFT may introduce additional conditions to ensure that the Petitioners comply with the TRQ allocation and carry out the imports, in accordance with law.”
12. The allocation of bullion TRQ for the FY 2024-25 is stated to have worked itself out pursuant to the aforesaid order passed by this Court.
13. Pursuant to the Trade Notice No.30/2024-2025 dated 12.02.2025, the petitioners submitted applications for TRQ under CEPA for FY 2025-26, accompanied by a fee of Rs.[1] Lakh and a Chartered Accountant’s certificate detailing turnover for the preceding three financial years, as also FY 2024-
25.
14. During a meeting held on 29.04.2025 at DGFT (HQ), it was noted as under:
may now be an opportune time to introduce qualitative parameters for TRQ allocation in a phased manner. ii. The allocations are to be made to ensure proper utilization of the TRQ allocated so that the benefits of the arrangements are transmitted to the exporters, manufacturers as well as end consumers in the domestic market. iii. Applicants having industrial/manufacturing use of the gold imported under TRQs need to be prioritised. Manufacturers and traders with a considerable size of business in the last three years to be given an opportunity. iv. The Committee noted that a broader allocation across a high number of applicants could potentially result in reduced individual entitlements, which may contribute to sectoral imbalances and possible under-utilisation. It was observed that, in the previous year, a significant number of TRQ holders with baseline quantities did not effectuate any imports. At the same time, an approach that confines allocations solely to existing authorisation holders may not adequately reflect capacities and new entrants with demonstrable performance. The Committee further recognised the need to accord appropriate consideration to applicants with established manufacturing capacity, in view of their potential to contribute meaningfully to domestic value addition and utilisation of the quota. Accordingly, the need to maintain an appropriate equilibrium was recognised. To enable effective regulatory oversight and operational manageability, the Committee agreed to rationalise the number of authorisation holders to a reasonable extent, while still allowing for a broader distribution compared to earlier years. v. Accordingly, certain categories of applicants were not considered for allocation of quotas, in line with established policy parameters and regulatory precedents, as detailed below: (a) Scheduled Commercial Banks — Consistent with the extant provisions, banks have already been accorded recognition under the policy framework to directly import gold. Given their designated role as nominated agencies acting as primary suppliers to the industry, separate quota allocation in this context was deemed unnecessary. (b) Applicants with an average annual turnover below ₹25 crore over the preceding three financial years — The Committee took note of condition (g) of the Annexure to DGFT Public Notice NO. 06/2015-20 dated 01.05.2022, which prescribed a minimum average annual turnover of ₹25 crore as an eligibility criterion for TRQ allocations. A similar threshold is reflected in the applicable IFSCA regulations, which stipulate a minimum net worth of ₹25 crore for recognition as Qualified Jewellers. In view of these aligned regulatory benchmarks, the Committee maintained consistency by applying this threshold for consideration under the present exercise. vi. This is in line with the objectives of the Comprehensive Economic Partnership Agreement (CEPA), which aims to enhance value addition, promote domestic manufacturing, and generate employment opportunities.
7. The Committee thoroughly examined, discussed, and deliberated on all applications received to determine appropriate criteria for inclusion, exclusion, and quantity allocation. It was further noted that since all applications were duly examined and processed, application fees would not be refunded even in cases of non-allocation. Such non-allocated applications would be deemed as examined and rejected.
8. The Committee adopted the following formulations for allocation: a. Only one application has been considered per applicant (i.e., per Importer Exporter Code - IEC). b. Notwithstanding subsequent conditionalities, the allocation shall not exceed the quantity applied for by the applicant. c. Applicants have been allocated quotas based on multiple criteria, with the maximum allocation arrived at among the applicable criteria being adopted. The criteria and corresponding allocations are as under:
9. Based on the above formulation, the details of provisional allocations of Gold Bullion under 7108 and 7113 made are placed at Annexure I and Annexure II respectively.
10. A buffer quantity of quota has been maintained by this Directorate to adjust for possible gaps in utilisation records and accounting anomalies, based on experiences from previous years, against the provisional allocations.
11. In case of any deviation or anomaly, authorisation holders are required not to utilise the authorization and must seek endorsement of the correct quantity by providing accurate information through filing amendment application online on DGFT Portal.
12. Any authorization obtained based on false information or misrepresentation shall be liable for ab-initio cancellation and may invite penal proceedings under the FTDR Act and applicable rules.”
15. The petitioners, in the above conspectus, made the following submissions:
(i) The criteria adopted vide Minutes of Meeting dated 29.04.2025, either altogether excluded the petitioners for consideration or resulted in a short allocation of TRQ for FY 2025-26.
(ii) The conditions prescribed vide Paragraphs 6, 7, 8 and 9 are arbitrary inasmuch as all applicants with an average annual turnover below Rs. 25 Crores over the preceding three financial years have not been considered for allocation of TRQ for FY 2025-26.
(iii) The requirement of considering the average annual turnover is completely bereft of any rationale especially given the background that the policy directions over the last few years have geared towards making the TRQ allocation more broad-based.
(iv) The methodology for the allocation of TRQ discriminates against small businesses and first-time applicants, and is detrimental to improving the efficiency and competitiveness of India’s manufacturing and services sectors.
16. The matter was heard at length on 24.09.2025, when the respondents were directed to produce data as regards issuance of licenses/utilization of allocation of TRQ in the ongoing financial year.
17. Today, the learned Standing Counsel appearing for the respondents, has informed this Court that no allocation whatsoever has been made so far for bullion TRQ for the current financial year.
18. Necessarily, given that six months out of the current financial year have already elapsed, the respondents would be required to undertake a review of the TRQ allocation so as to utilize the quota for the current financial year.
19. Considering the facts and circumstances of the case, it would be apposite for the respondents to conduct the aforesaid review as expeditiously as possible and preferably within a period of four weeks from today.
20. While conducting the review, the concerned authorities shall duly take into account the grievances / apprehensions highlighted by the petitioners in the present petitions, particularly the aspect that the allocation policy must veer towards making the same broad-based and extending it to those applicants who do not have a track record of substantial turnover over the preceding few years (even though they have significant network) as well as those seeking TRQ allocation for the first time.
21. In the event the respondents are inclined to accept the request of the petitioners, the DGFT may introduce additional conditions / criteria to allocate the TRQ accordingly.
22. With the aforesaid directions, the petitions (alongwith pending applications) are disposed of.
SACHIN DATTA, J SEPTEMBER 26, 2025/r, ss