Case Note & Summary
The petitioners, JSW Steel Limited and Welspun Tradings Limited, along with their officers, challenged the constitutional validity of the Minimum Export Price (MEP) notification dated 8th February 2015 and subsequent notifications issued by the Directorate General of Foreign Trade (DGFT) fixing MEP for iron ore and steel products. The petitioners argued that the MEP notification was arbitrary, discriminatory, and violated their fundamental rights under Articles 14 and 19(1)(g) of the Constitution. They contended that the MEP was a tax or duty imposed without authority of law and that the government had no power to fix MEP under the Foreign Trade (Development and Regulation) Act, 1992. The respondents, Union of India and DGFT, defended the notification as a valid regulatory measure to ensure domestic availability of iron ore and steel products, stabilize prices, and prevent hoarding. The court analyzed the provisions of the Foreign Trade (Development and Regulation) Act, 1992, particularly Sections 3 and 5, which empower the Central Government to make provisions for the development and regulation of foreign trade and to impose conditions for export licensing. The court held that the MEP is a condition for export licensing and not a tax or duty. It further held that the MEP notification is a reasonable restriction under Article 19(6) in the interest of the general public and does not violate Article 14 as it applies uniformly to all exporters. The court dismissed the petitions, upholding the validity of the MEP notification.
Headnote
A) Constitutional Law - Article 14 - Reasonable Classification - Minimum Export Price (MEP) notification does not violate Article 14 as it applies uniformly to all exporters of iron ore and steel products and is based on a reasonable classification to ensure domestic availability and stabilize prices. (Paras 10-15) B) Constitutional Law - Article 19(1)(g) - Freedom of Trade - MEP is a reasonable restriction under Article 19(6) in the interest of the general public to prevent shortage of essential commodities and ensure fair pricing. (Paras 16-20) C) Foreign Trade Law - Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 - Power to Impose Conditions - The Central Government has the power to impose conditions including MEP for export licensing under Section 5 read with Section 3 of the Act. MEP is a valid condition and not a tax or duty. (Paras 21-25) D) Foreign Trade Law - Foreign Trade Policy - Statutory Force - The Foreign Trade Policy framed under Section 5 of the Act has statutory force and conditions like MEP are binding on exporters. (Paras 26-30) E) Administrative Law - Legitimate Expectation - Petitioners cannot claim legitimate expectation to export at any price as the policy is subject to change in public interest. (Paras 31-35)
Issue of Consideration
Whether the Minimum Export Price (MEP) notification dated 8th February 2015 and subsequent notifications fixing MEP for iron ore and steel products are constitutionally valid and within the powers of the Central Government under the Foreign Trade (Development and Regulation) Act, 1992.
Final Decision
The court dismissed both writ petitions, upholding the constitutional validity of the Minimum Export Price (MEP) notification dated 8th February 2015 and subsequent notifications. The court held that the MEP is a valid condition for export licensing under the Foreign Trade (Development and Regulation) Act, 1992, and does not violate Articles 14 or 19(1)(g) of the Constitution.
Law Points
- Minimum Export Price (MEP) is a valid condition for export licensing
- MEP does not violate Article 14 or Article 19(1)(g) of the Constitution
- Foreign Trade Policy is a statutory instrument under Section 5 of the Foreign Trade (Development and Regulation) Act
- 1992
- MEP is not a tax or duty
- MEP is a regulatory measure to ensure domestic availability and stabilize prices
- Petitioners have no fundamental right to export at any price
- MEP notification is not arbitrary or discriminatory
- MEP is a reasonable restriction in public interest.
