CHATROOM: DGFT should review circular on sale of IPA from SEZ to DTA

Import of Iso Propyl Alcohol (IPA) is subject to country-wise QR i.e. quantitative restrictions (DGFT notifi­cation no.64 dated 31.03.2013). The procedures to import IPA under a registration certificate is prescribed (DGFT Public notice no.4 dated 11.04.2023). We are a SEZ unit where we have imported IPA from China but due to some production difficulties, we are unable to use the imported IPA immediately. A DTA party holding the registration certificate for import of IPA from China is willing to buy IPA from us. Can we sell the IPA imported from China to the DTA party against the registration certificate?
 

No. The DGFT Policy Circular no.4 dated 31.08.2023 says that import of IPA in SEZ is not subject to country-wise QR provided that no DTA sale of IPA is allowed by SEZ units. I think the circular needs a review because, if a DTA party holds a registration certificate for import of IPA from China, there is no reason to not allow the party to buy the IPA imported from China, from any SEZ unit against the same registration certificate.
 

Adani Hazira Port Pvt Ltd (HPPL) has said that it will collect extra charges of Rs 2,500 for a 20 feet container and Rs 4,000 for 40 and 45 feet boxes from container freight station (CFS) operators when import loaded containers are taken to a CFS as nominated by the lines. The CFS oper­ators have protested saying these are arbitrary charges by the port operator abusing its dominant position. What recourse is available against such practices?
 

Section 4(1) of the Competition Act, 2002 says that no enterprise or group shall abuse its dominant position. Section 4(2) of the said Act deals with the related matters in some detail. It is difficult to deal with all the technicalities here. I suggest that you may go through that Section and other relevant provisions in the said Act to determine whether the port operator HPPL is in a dominant position as per the said Act and whether the above mentioned levy by the port operator constitutes abuse of dominant position as per the said Act. You can then decide whether the issue merits a complaint with the Competition Commission of India for suitable action and proceed accordingly.
 

Rule 29(7) of the SEZ Rules, 2006 says that re-import of exported goods must be made within one year from the date of export or the warranty period or validity of maintenance contract, whichever is later. Our customer has returned a consignment of defective goods exported by us more than one year back. It is not under any warranty clause or maintenance contract. How to get it back?
 

In my opinion, the defective finished goods are your inputs necessary to carry on your authorised operations and so, must be allowed under Rule 27(1) of the said Rules. Anyway, you may ask the Development Commissioner to permit re-import of the goods and also to get the said Rule 29(7) amended suitably, as the restriction makes no sense.