Regional Authority becomes redundant as DGFT goes online

In a welcome development, the Director General of Foreign Trade (DGFT) has introduced an online module for adjudication, appeal, and review under the Foreign Trade Development & Regulation Act, 1992, (FTDR Act) and the Foreign Trade Development and Regulation Rules, 1993, (FTDR Rules).

The prescribed processes for adjudication now require the exporter or importer to submit online the documents called for by the jurisdictional authority. If the documents sought are not submitted or if they are found to be incomplete, the authority may issue a show cause notice (SCN) on-line. The reply to SCN, including any written submissions or documents, must be submitted on-line. The personal hearing may be held in person or through videoconferencing at the discretion of the adjudicating authority. Thereafter, the adjudication order will be passed and communicated through email to the party.

Similar processes will be followed online for the appeal proceedings and review proceedings. However, as a transitional measure, the DGFT has allowed appeals to be submitted manually or online till the end of this financial year. All proceedings thereafter will be conducted online. 

The DGFT says that the appeal under Section 15 of the FTDR Act must be submitted within the stipulated period along with the proof of having deposited the penalty amount. And also that no appeal can be submitted after the stipulated period as the online system shall automatically block the process of appeal once the time limit expires. The said Section 15 requires the appeal to be filed within 45 days of communication of the adjudication order.

The appellate authority can, however, extend the period by 30 more days if he is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the stipulated period. So, blocking the process of appeal within 45 days would not be in conformity with the relevant legal provisions. Hopefully, the DGFT will allow the appeal to be accepted till the expiry of 75 days from the relevant date and leave the discretion to accept appeals filed after 45 days to the appellate authority. 

Section 15 of the FTDR Act says that no appeal shall be entertained unless the amount of penalty or redemption charges has been deposited by the appellant. However, where the appellate authority is satisfied that the deposit to be made will cause undue hardship to the appellant, it may dispense with such deposit either unconditionally or subject to such conditions as it may impose. The DGFT should take note of this legal provision and modify instructions accordingly. This is all the more necessary as the FTDR Act allows the adjudicating authority to impose penalty up to five times the value of goods for certain contraventions.

The online proceedings for adjudication, appeal, and review will apply for any violations of DGFT’s schemes, Foreign Trade Policy and Procedures and any orders under the FTDR Act and FTDR Rules. The trade is already familiar with such online proceedings in the case of similar proceedings under the direct and indirect laws. 

Recently, the DGFT upgraded its website enabling filing applications for various types of authorisations and grant of authorisations, amendments, redemptions and so on. Since the processing of almost all applications can be done from remote locations, the DGFT should consider making the institution of Regional Authority rather redundant. 

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email: tncrajagopalan@gmail.com