2010 (12) TMI 141 - HC - Customs

Target plus Scheme - It is not in dispute that VPIPL is a Star Export House. Para 3.7.4 indicates who can apply under the Target Plus Scheme - The Petitioner is aggrieved by the rejection on 23rd June 2008 of Ministry of Law and Justice to the Petitioner‟s contention that firm M/s. Polypacks Industries is a group company of VPIPL - No fault can be found with the decision of the Respondents in declining to extend the benefits of Target Plus Scheme to VPIPL and in refusing to treat the firm M/s Polypacks Industries as a group company of the VPIPL - Writ petition is dismissed

Summary

Issues:
1. Eligibility of a company under the "Target Plus Scheme" of Foreign Trade Policy 2004-09.
2. Interpretation of the term "group company" as per Clause 3.7.4 and Clause 9.28 of the FTP 2004-09.
3. Rejection of a claim under the Target Plus Scheme based on the definition of a "group company."

Analysis:
1. The primary issue in this case revolves around the eligibility of a company, Vacmet Packagings (India) Pvt. Ltd. (VPIPL), to avail the benefits of the "Target Plus Scheme" under the Foreign Trade Policy 2004-09. The scheme requires Star Export Houses with a minimum export turnover to be considered for benefits.

2. The interpretation of the term "group company" under Clause 3.7.4 and Clause 9.28 of the FTP 2004-09 is crucial. The petitioner argued that M/s Polypacks Industries, a partnership firm with common partners and directors as VPIPL, should be considered a "group company" of VPIPL. However, the court analyzed the definition and requirements for a company to be classified as a group company.

3. The rejection of the petitioner's claim under the Target Plus Scheme was based on the Ministry's decision that M/s Polypacks Industries did not meet the criteria to be considered a group company of VPIPL. The court upheld this decision, emphasizing the necessity for a firm to hold shares and exercise voting rights in the company to qualify as a group company.

4. The court dismissed the petitioner's argument that individual partners holding shares in the company fulfilled the criteria of a group company. It was clarified that the term "enterprise" in the definition of a group company should typically refer to another company, and the firm itself, not individual partners, must hold the required voting rights in the company.

5. Ultimately, the court concluded that the individual partners of M/s Polypacks Industries did not meet the criteria to be considered a "group company" of VPIPL as per the FTP 2004-09. The petition was deemed meritless, and the rejection of the claim under the Target Plus Scheme was upheld.

6. The judgment highlights the importance of strict adherence to the defined criteria and interpretations within trade policies to determine eligibility for schemes and benefits, ensuring clarity and consistency in decision-making processes.