2018 (10) TMI 172 - HC - Customs

Served From India Scheme - It is the contention of the petitioner that such scrips obtained by the Indian Service Providers under the SFIS scheme could be used for import of any capital goods, spares, professional equipment, office equipment, office furniture and consumables - Jurisdiction. Held that - The show cause notice has been issued in the year 2014, the Policy Interpretation Committee under the Chairmanship of Director General of Foreign Trade has interpreted the policy on 27.12.2011 itself and on the premise that the proceedings are pending, petitioner claims to have approached the Court and this would not be a good ground to entertain the present writ petition, which has been filed belatedly. A litigant who seeks to invoke extraordinary jurisdiction of this Court cannot be heard to contend that representations or memorials were being submitted to the authorities and same was not disposed of and thereby a dead cause of action was alive and then, approach this Court belatedly. That apart, sub-article (2) of Article 226 of the Constitution of India would indicate that power conferred under sub article (1) to issue directions, orders or writs to any Government, authority or person can be exercised by any High Court exercising jurisdiction in relation to the territories within which cause of action, wholly or in part, arises. Jurisdiction - Held that - In the instant case undisputedly the registered office of the petitioner is located at Mumbai. The show cause notice impugned in the writ petition has been issued by the Assistant Director General of Foreign Trade at Mumbai. Duty draw backs have been drawn at Mumbai Port. Thus, the entire cause of action having arisen within the territory of High Court of Mumbai. Hence, petitioner cannot be heard to contend that this Court has jurisdiction to entertain this writ petition under Article 226(1) - Merely because petitioner is also having a hotel at Bengaluru amongst being run by it chain of hotels across the country would not give rise for cause of action within the territorial jurisdiction of this Court to exercise the power vested under Article 226(1). Petition dismissed.

Summary

Issues:
1. Jurisdiction of the High Court to entertain the petition.
2. Interpretation of the "Served From India Scheme" under the Foreign Trade Policy.
3. Validity of the recovery notice issued by the Additional Director General of Foreign Trade.

Jurisdiction of the High Court:
The petitioner challenged a recovery notice issued by the Additional Director General of Foreign Trade. The respondent argued that the High Court had no territorial jurisdiction to entertain the petition as the cause of action did not arise within its jurisdiction. The respondent pointed out that the registered office of the petitioner was in Mumbai, and the show cause notice was also issued from Mumbai. The Court agreed that the cause of action arose in Mumbai, and therefore, the petition was not maintainable in the Karnataka High Court based on territorial jurisdiction.

Interpretation of the "Served From India Scheme":
The petitioner contended that duty credit scrips granted under the "Served From India Scheme" (SFIS) could be used for importing various goods. The petitioner claimed to have obtained duty credit scrips under the scheme without objections until a recovery notice was issued. The petitioner argued that the Policy Interpretation Committee wrongly interpreted the term "All India Service Providers" in the Foreign Trade Policy, leading to the recovery notice. The respondent defended the interpretation, stating it was aimed at promoting Indian brands abroad. The respondent emphasized that the Committee's interpretation was to enhance India's image globally. The respondent sought dismissal of the petition on the grounds of merit and delay.

Validity of the Recovery Notice:
The petitioner challenged the recovery notice issued by the Additional Director General of Foreign Trade to recover the value of duty credit scrips granted. The petitioner claimed the notice was issued erroneously and contrary to the law. The respondent argued that the Policy Interpretation Committee had correctly interpreted the policy to accelerate service exports and promote the "Serve from India" brand. The respondent contended that the petitioner was not entitled to relief and that the petition should be dismissed on merit and delay. The Court noted that the petition was premature as it was filed before the adjudication of the show cause notice and dismissed the writ petition, allowing the petitioner to challenge any adverse orders in the appropriate jurisdictional court.

In conclusion, the Karnataka High Court dismissed the writ petition due to lack of territorial jurisdiction, premature filing, and the need for the petitioner to challenge any adverse orders in the appropriate court. The Court did not delve into the merits of the case, emphasizing the need for proper examination of the petitioner's response to the show cause notice before forming an opinion.