2008 (2) TMI 381 - HC - Customs

DFCE benefit - Held that Grievance Redressal Committee of the Ministry of Commerce was chaired by DGFT and is approved at the highest level so decision of Committee is valid and binding decision of Committee cannot be kept in abeyance mere for the reason that it affects adversely a government stand in any proceeding - Therefore, petitioner, a status holder, is eligible for a Duty Free Credit Entitlement (DFCE) benefit as per Export and Import Policy 2002-2007

Issues Involved:
1. Entitlement to Duty Free Credit Entitlement (DFCE) benefit.
2. Jurisdiction and authority of the Grievance Redressal Committee.
3. Implementation of the Grievance Redressal Committee's decision.
4. Pending proceedings before the Supreme Court.
5. Validity of keeping the Grievance Redressal Committee's decision in abeyance.

Detailed Analysis:

1. Entitlement to Duty Free Credit Entitlement (DFCE) Benefit:
The petitioner, a manufacturer-exporter of Soya Bean Extraction Meal, sought a mandamus to implement the decision dated 14th February 2006, followed by an office memorandum dated 27th February 2006, issued by the Grievance Redressal Committee of the Ministry of Commerce. The petitioner claimed an incremental export growth of 486.45% in 2003-2004 over 2002-2003, thus meeting the criteria under para 3.7.2.1(f) of the Export and Import Policy (2002-2007) for DFCE benefit, which requires more than 25% incremental growth in FOB value of exports and a minimum export turnover of Rs. 25 crores. The petitioner applied for a DFCE entitlement of Rs. 3,92,02,950/- but was rejected by the Joint Director of Foreign Trade, Mumbai, on 2nd November 2005.

2. Jurisdiction and Authority of the Grievance Redressal Committee:
The Grievance Redressal Mechanism, as per clause 2.49.2 of the Foreign Trade Policy, was established to resolve disputes over entitlements, condone delays, and regularize breaches by exporters in bona fide cases. The Grievance Redressal Committee, constituted under clause 9.9 of the policy, includes the Director General of Foreign Trade and heads of Regional Licensing Authorities, along with representatives from various official and technical authorities. The Committee, chaired by the Director General of Foreign Trade, accepted the petitioner's contentions and held the petitioner entitled to the DFCE benefit on 14th February 2006, which was approved by the Ministry of Commerce and Industry.

3. Implementation of the Grievance Redressal Committee's Decision:
Despite the approval, the respondents did not implement the decision communicated on 14th February 2006 and 27th February 2006, leading to the petitioner filing the present writ petition. The respondents argued that only the Director General Foreign Trade was competent to decide the matter, not the Grievance Redressal Committee. However, the court found that the Committee, chaired by the Director General of Foreign Trade, had the jurisdiction to resolve disputes over entitlements, making the respondents' objections baseless.

4. Pending Proceedings Before the Supreme Court:
The respondents contended that the subject matter was pending before the Supreme Court in Civil Appeal No. 1589/2006 (Union of India v. Adani Exports Limited), where the court stayed the orders of the Gujarat High Court. The petitioner clarified that the Supreme Court proceedings pertained to the retrospective effect of an amendment to the policy and did not relate to the issues raised in the present case. The court found no stay on the present proceedings and no dispute involving the petitioner pending before the Supreme Court.

5. Validity of Keeping the Grievance Redressal Committee's Decision in Abeyance:
The respondents issued an office memorandum on 20th March 2006, stating that decisions of the Grievance Redressal Committee affecting the government's stand in court were to be kept in abeyance. The court held that a valid and binding decision taken by a duly authorized and competent authority, approved at the highest level, could not be kept in abeyance merely because it adversely affected the government's stand in any proceeding. The decision of the Grievance Redressal Committee, chaired by the Director General of Foreign Trade, was found to be justified, reasonable, and fair, and the respondents' action to keep it in abeyance was deemed unjustified, unreasonable, and unfair.

Conclusion:
The writ petition was allowed, and the respondents were directed to implement the decision of the Grievance Redressal Committee dated 14th February 2006 within eight weeks. The court emphasized the statutory power and jurisdiction of the Grievance Redressal Committee and the necessity for the respondents to comply with the policy notified in the exercise of statutory power.

← Previous Next →