2025(09)LCX0496

Delhi High Court

Plasticotes Investments Private Limited

Versus

Director General Of Foreign Trade

W.P.(C) 11391/2025 decided on 26-09-2025

IN THE HIGH COURT OF DELHI AT NE

IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of decision: 26.09.2025

W.P.(C) 11391/2025 and CM APPL.46669/2025

MS PLASTICOTES INVESTMENTS PRIVATE LIMITED
                                                                            .....Petitioner

versus

DIRECTOR GENERAL OF FOREIGN TRADE & ORS.
                                                                        .....Respondents

with

W.P.(C) 11338/2025 and CM APPL.46548/2025

W.P.(C) 11339/2025 and CM APPL.46551/2025

W.P.(C) 11347/2025 and CM APPL.46588/2025

W.P.(C) 11349/2025 and CM APPL.46592/2025

W.P.(C) 11386/2025 and CM APPL.46658/2025

W.P.(C) 11389/2025 and CM APPL.46663/2025

W.P.(C) 11390/2025 and CM APPL.46666/2025

W.P.(C) 11396/2025 and CM APPL.46686/2025

W.P.(C) 11400/2025 and CM APPL.46693/2025

W.P.(C) 11414/2025 and CM APPL.46726/2025

W.P.(C) 11417/2025 and CM APPL.46732/2025

W.P.(C) 11436/2025 and CM APPL.46789/2025

W.P.(C) 7560/2025 and CM APPL.33718/2025

W.P.(C) 7694/2025 and CM APPL.34191/2025

W.P.(C) 7720/2025 and CM APPL.34235/2025

W.P.(C) 7753/2025 and CM APPL.34353/2025

W.P.(C) 7783/2025 and CM APPL.34414/2025

W.P.(C) 7815/2025 and CM APPL.34467/2025

W.P.(C) 7822/2025 and CM APPL.34481/2025

W.P.(C) 7827/2025 and CM APPL.34490/2025

W.P.(C) 7830/2025 and CM APPL.34494/2025

W.P.(C) 7835/2025 and CM APPL.34506/2025

W.P.(C) 7946/2025 and CM APPL.34954/2025

W.P.(C) 7952/2025 and CM APPL.34964/2025

W.P.(C) 7954/2025 and CM APPL.34967/2025

W.P.(C) 7974/2025 and CM APPL.35000/2025

W.P.(C) 7975/2025 and CM APPL.35003/2025

W.P.(C) 7977/2025 and CM APPL.35008/2025

W.P.(C) 8657/2025 and CM APPL.37170/2025

W.P.(C) 8663/2025 and CM APPL.37178/2025

W.P.(C) 8673/2025 and CM APPL.37191/2025

W.P.(C) 8674/2025 and CM APPL.37194/2025

W.P.(C) 8693/2025 and CM APPL.37252/2025

W.P.(C) 8694/2025 and CM APPL.37255/2025

W.P.(C) 8699/2025 and CM APPL.37263/2025

W.P.(C) 8707/2025 and CM APPL.37273/2025

W.P.(C) 8709/2025 and CM APPL.37277/2025

W.P.(C) 8714/2025 and CM APPL.37285/2025

W.P.(C) 8733/2025 and CM APPL.37321/2025

W.P.(C) 8736/2025 and CM APPL.37340/2025

W.P.(C) 8738/2025 and CM APPL.37347/2025

W.P.(C) 8742/2025 and CM APPL.37371/2025

W.P.(C) 8743/2025 and CM APPL.37375/2025

W.P.(C) 8744/2025 and CM APPL.37379/2025

W.P.(C) 8745/2025 and CM APPL.37385/2025

W.P.(C) 8750/2025 and CM APPL.37397/2025

W.P.(C) 8983/2025 and CM APPL.38363/2025

W.P.(C) 9075/2025 and CM APPL.38608/2025

W.P.(C) 9076/2025 and CM APPL.38611/2025

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

Presence

Mr. Tarun Gulati, Sr. Adv., Mr. Rajat Mittal, Mr. Dharan Gandhi, Mr. Suprateek Neogi, Mr. Subham Kumar, Mr. Priyanshu, Ms. Krati Agarwal and Mr. Kanu Agrawal, Advocates for petitioner in Item Nos.79, 101-112, 114, 117-123, 125-150.

Mr. Rajat Mittal, Mr. Kanu Agrawal and Ms. Soumya Sannidhanam,Advocates for petitioner in Item No.118.

Mr. Arjun Raghavendra M., Mr. P.R. Abhiram and Mr. Aaditya Singh Dhull, Advs. for petitioners.

Mr. Balendu Shekar, CGSC along with Mr. Krishna Chaitanya, Mr. Rajkumar Maurya, mr. Divyansh Singh Dev and Ms. Tanisha Samanta, Advocates for DGFT in item No.105.

Ms. Arunima Dwivedi, CGSC along with Ms. Himanshi Singh and Ms. Priya Khurana, Advocates for DGFT in item Nos.133, 141, 142 and 150.

Mr. Kishore Kunal and Mr. Akshay Agarwal, Advs. for petitioner in item nos.115, 116 and 124.

Ms. Rupali Bandhopadhyay, CGSC, Mr. Abhijeet Kumar and Ms. Amisha Gupta, Advs. for respondents in item nos.79, 104, 111 and 112.

Mr. Varun Mishra, Mr. Ashar Hussain and Ms. Shreeya Sud, Advs. for respondent nos.1, 2 and 3 in item no.107.

Mr. Ashish K. Dixit, CGSC along with Mr. Umar Hashmi, Mr. Mayank Upadhyay and Ms. Iqra Shiekh, Advocates for UOI in Item Nos.134 and 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:

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:-

“6. In the opinion of the Court, there is significant merit in the contentions raised by the Petitioners. While Paragraph No. 7 of the Minutes of Meeting dated 15th April, 2024 does indicate that a review exercise would be conducted based on the imports up to September 2024, however, as correctly pointed out by Mr. Gulati, this review can be deemed a ‘blind’ review, given that no criteria were specified in the said Minutes with respect to the potential allocation. Furthermore, the public notice referred to by the Respondents only addresses cases where TRQ utilization, in the review process, is ≤ 25%, without providing further details regarding other quantities of utilisation. Moreover, this public notice pertains to FY 2023-24, and there is no such public notice informing the Petitioners or the general public about such a criteria for FY 2024-25.

7. That being said, the Court understands that the intent behind the review exercise is to ensure that the TRQ allocations are specifically adhered to. Therefore, the Respondents’ objective in conducting the review appears to be solely to ensure that the TRQ imports under the India-UAE CEPA are fully met. However, in light of the aforementioned circumstances, since the review decision was made without affording the Petitioners an opportunity to be heard, and Ms. Shiva Lakshmi has also indicated that the Petitioners should have first approached the DGFT with their concerns, the Court is of the opinion that it would be more appropriate at this stage, without delving deep into the merits of the case, to direct the DGFT to examine all the issues raised by the Petitioners in the present petitions and issue a fresh decision on the basis 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:

“6. The Committee noted that the quantity applied for (more than 25 times the available quota) and the number of applicants (a 253% increase on a year-on-year basis), as tabulated at Para 3 above, are disproportionately large. Based on its deliberations, the Committee adopted the following set of broad principles, drawing on the experiences of the past year and feedback received from the industry, to guide the determination of the modalities for allocation of the said TRQs.:

i. Given the substantial expansion in scope — with over 800 authorisation holders in FY 2024–25, reflecting a year-on-year increase of more than 140% compared to FY 2023–24 — and the strong uptake, evidenced by over 80% utilisation of the quota in FY 2024–25, which indicates growing awareness and acceptance, it 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 Rs. 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 Rs. 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 Rs. 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:

Sr. No. Criterion of Allocation  Allocation (in Kg)
1 Utilized more than 2500 Kg in the last year 2500
2 Utilized more than 2000 Kg but less than 2500 Kg in the last year 2000
3 Utilized more than 1500 Kg but less than 2000 Kg in the last year 1500
4 Utilized more than 1000 Kg but less than 1500 Kg in the last year 1000
5 Utilized more than 750 Kg but less than 1000 Kg in the last year 750
6 Utilized more than 500 Kg but less than 750 Kg in the last year 500
7 Utilized more than 250 Kg but less than 500 Kg in the last year 250
8 Utilized more than 150 Kg but less than 250 Kg in the last year 150
9 Qualified Jewellers (QJs) 150
10 Manufacturers with average manufacturing turnover exceeding Rs.250 crore over the last three years 150
11 Traders with average trading turnover exceeding Rs.1000 crore over the last three years 100
12 Utilized more than 100 Kg but less than 150 Kg in the last year 100
13 Utilized more than 75 Kg but less than 100 Kg in the last year 75
14 Utilized more than 50 Kg but less than 75 Kg in the last year 50
15 Utilized more than 25 Kg but less than 50 Kg in the last year 40
16 Applicants with an average annual turnover exceeding Rs. 25 crore over the past three years 35

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