Rice exporters move AP High Court against shipment curbs

Three exporters have challenged the Centre’s curbs on rice exports in the Andhra Pradesh High Court with a bench of Justices C Praveen Kumar and AV Ravindra Babu issuing a notice to the Ministry of Finance’s Revenue Department and Visakhapatnam Commissioner of Customers. 

The three exporters had filed a plea urging the court to issue a writ of mandamus to allow their shipments duty-free since “let export” orders had been issued on September 8. 

On September 8, the Centre issued an order curbing rice exports effective September 9. In its orders, the Centre banned exportsof broken rice and imposed a 20 per cent duty on non-basmati white rice, brown rice and paddy. It has exempted Basmati and parboiled rice from any curbs. 

“Illegal curbs”

In their petition, the Delhi-based PJS Overseas, Raipur-based AVI International LLP and Thane-based MFG Overseas Pvt Ltd said the curbs were “arbitrary, illegal and unjust” without jurisdiction contrary to the provisions of Customs Act 1964. They also claimed the order was violative of their fundamental rights guaranteed under Articles 14 and 19 (1) (G) of the Constitution.

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The petitions argued that their rice consignment, meant for exports, had reached the Visakhapatnam port much before the Centre issued a notification imposing a 20 per cent duty on “semi-milled or wholly-milled rice” and the process of loading had also commenced. 

Need lengthy adjudication

They said the shipping bills and the letter of export order had been issued much before the notification on the curbs was issued. Seeking an interim order to allow the shipments, the exporters said they will face “irreparable loss”. 

The Customs Department counsel argued that the writ petition required adjudication in length and sought some sort of security for the consignment that was to be shipped out without 20 per cent duty. 

The judges said they did not want to go into the question of whether the petitions were liable to pay the 20 per cent export duty at this stage. Hence, they ordered the exporters to furnish a bank guarantee making up 40 per cent of the export duty payable within a week. In the case of default, the port authorities were at liberty to deal with the consignment loaded “in accordance with the law”, the judges said. 

Why curbs

The Centre and Customs Department have asked to file their response by November 15. 

India curbed rice exports after its prices began to increase in the domestic market after deficient rainfall in key growing areas of West Bengal, east Uttar Pradesh and Jharkhand affecting sowing during the current kharif season. 

The ban came at a time when Bangladesh was building its rice inventories and China was looking to buy more after a 75-day heat wave in the Communist nation affected the paddy crop badly. 

According to the Ministry of Agriculture, rice production during the current kharif season is estimated at 104.99 million tonnes (mt) against 111.76 mt last year. The Consumer Affairs Ministry data showed that rice prices have currently increased to ₹38.17 a kg in retail outlets, up 9.24 per cent from a year ago.

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