2018 (9) TMI 938 - HC - Customs

Incremental Exports Incentivization Scheme - Limit brought in monetary limits vide Notification dated 23.09.2014, with retrospective effect - Held that - The impugned communication dated 23.09.2016, whereby the respondent/Directorate General of Foreign Trade have restricted the entitlement to ₹ 95,00,000/- only, as against the petitioner s claim to the tune of ₹ 33,68,02,996.70/- is held to be without jurisdiction, arbitrary, illegal and capricious and contrary to the provisions of the Policy and the Handbook of Procedures - petition allowed.

Summary

Issues:
1. Interpretation of the Incremental Exports Incentivization Scheme.
2. Validity of the notification limiting entitlement under the subject scheme.
3. Jurisdiction and legality of the impugned communication restricting entitlement.
4. Compliance with the decision in a previous case regarding export incentives.
5. Direction to the Regional Authority for examination of the petitioner's case.

Issue 1: Interpretation of the Incremental Exports Incentivization Scheme
The petitioner claimed entitlement under the Incremental Exports Incentivization Scheme due to the global downturn affecting exports from India in 2012-13. The Central Government introduced the scheme to incentivize incremental exports through a notification in the Foreign Trade Policy 2009-14. The objective of the scheme was to incentivize incremental exports, and the petitioner, as an IEC holder, sought benefits under the scheme for the year 2013-14.

Issue 2: Validity of the notification limiting entitlement under the subject scheme
A notification dated 23.09.2014 limited the entitlement under the subject scheme to a scrip of a value not exceeding ?1 crore per IEC for the year 2013-14 with retrospective effect. The petitioner challenged this limitation, arguing that it was arbitrary, illegal, and contrary to the provisions of the Policy and the Handbook of Procedures. The High Court held the limitation to be without jurisdiction and quashed it.

Issue 3: Jurisdiction and legality of the impugned communication restricting entitlement
The impugned communication dated 23.09.2016, which restricted the petitioner's entitlement to ?95,00,000 only, was deemed without jurisdiction, arbitrary, illegal, and capricious by the High Court. The court set aside and quashed this communication, stating it was contrary to the Policy and the Handbook of Procedures.

Issue 4: Compliance with the decision in a previous case regarding export incentives
The High Court referred to a previous decision in M/s Welldone Exim Pvt. Ltd. vs. Directorate General of Foreign Trade & Anr., where it was directed to examine export incentive claims without rejecting them solely based on exceeding ?1 crore during the financial year 2013-14. The Union of India conceded that the present petition's prayers were covered by the decision in the previous case, and the petitioner's claims had to be allowed accordingly.

Issue 5: Direction to the Regional Authority for examination of the petitioner's case
The High Court allowed the writ petition, directing the Regional Authority to examine the petitioner's case for export incentives and pass a reasoned order. The court emphasized that the application should not be rejected based on the total claimed amount exceeding ?1 crore during the financial year 2013-14. The Regional Authority was instructed to conduct the necessary scrutiny as per the relevant provisions within ten weeks, with the official respondent required to complete the exercise and inform the petitioner within the specified timeframe.

In conclusion, the High Court disposed of the writ petition with the aforementioned directions, emphasizing no costs were to be awarded in the matter.