2011 (1) TMI 1072 - HC - FEMA

Benefit under International Price Reimbursement Scheme (TPR Scheme )denied - Proprietary concern and a merchant-exporter exported various automotive components, by virtue of the said export - contention of the Petitioners that since the EEPC had already found the claims to be in order, it had to necessarily issue orders releasing the payment - Held that - Refusal by the EEPC to clear the Petitioners claims for payment in terms of the IPR Scheme cannot be said to be either arbitrary or unreasonable. Unless the complete documentation in terms of the IPR Scheme was made available to the EEPC by the Petitioners, they could not expect the EEPC to clear their claims, no merit in either of the petitions and they are dismissed as such with no order as to costs

Issues Involved:
1. Entitlement to benefits under the International Price Reimbursement Scheme (IPR Scheme).
2. Impact of criminal proceedings on the disbursement of claims.
3. Requirement and sufficiency of documentation for claim verification under the IPR Scheme.
4. Allegations of arbitrary and unreasonable actions by the Engineering Export Promotion Council (EEPC).

Issue-wise Detailed Analysis:

1. Entitlement to benefits under the International Price Reimbursement Scheme (IPR Scheme):
The Petitioner, a proprietary concern and merchant-exporter, claimed benefits under the IPR Scheme for exports made during 1992-94. The scheme was designed to compensate exporters for the price differential in raw materials like steel. Claims amounting to Rs. 25,88,304 were submitted to the EEPC. The EEPC's role was to verify these claims as per the scheme's provisions.

2. Impact of criminal proceedings on the disbursement of claims:
The EEPC withheld the disbursement of the claimed amount due to a criminal case registered by the CBI against Mr. Yashpal Anand, the late husband of the current proprietor. Although the claims did not pertain to the years under investigation, the EEPC did not release the funds due to the pending criminal case. Following acquittals and the abatement of the criminal trial upon Mr. Yashpal Anand's death, the Petitioners argued that there was no longer any impediment to the release of payments.

3. Requirement and sufficiency of documentation for claim verification under the IPR Scheme:
The EEPC required specific documents for claim verification, including Customs Certified Invoices, Bank Realization Certificates, Customs Certified Packing Lists, and Test Certificates. The Petitioners contended that they had already submitted the necessary documents, and further requests by the EEPC were unwarranted. However, the EEPC maintained that the documentation provided was incomplete, which prevented the processing of claims. The Court noted that the IPR Scheme and Handbook mandated the submission of these documents, and without them, the EEPC could not verify the claims. The Court found that not even one of the claims contained the complete set of required documents.

4. Allegations of arbitrary and unreasonable actions by the EEPC:
The Petitioners alleged that the EEPC was acting arbitrarily by repeatedly asking for documents and not releasing the payments despite the acquittals and the submission of documents. The EEPC argued that the claims could not be processed without the complete set of required documents. The Court found that the EEPC's actions were neither arbitrary nor unreasonable, as the verification process necessitated the complete documentation as per the IPR Scheme. The Court upheld the EEPC's right to seek further clarification and documentation to ensure compliance with the scheme's requirements.

Conclusion:
The Court dismissed the petitions, concluding that the EEPC's refusal to clear the claims was justified due to the incomplete documentation provided by the Petitioners. The Court emphasized that the EEPC could not process claims without the necessary documents as stipulated by the IPR Scheme. There was no merit found in the petitions, and they were dismissed with no order as to costs.

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