2019 (11) TMI 777 - HC - Customs

Direction to issue a fresh certificate for unused value of the said Duty Free Credit Entitlement Certificate - Benefits under SFIS - HELD THAT - It is undisputed fact that the petitioner is an Indian Company, incorporated under the provisions of the Indian Companies Act, 1956, which is engaged in providing healthcare services at its hospital to patients to patients in India and also to patients who come to the petitioner s hospital for medical treatment in India from abroad. It is the specific case of the petitioner that in pursuance to Served from India Scheme to avail benefits enumerated in the Foreign Trade Policy, 2004- 2009 of the Government of India has filed an application on 22.03.2012 for issue of Duty Free Credit Entitlement Certificate in respect of eligible transactions of the petitioner during the period between 01/04/2008 and 31/03/2009 along with relevant documents. A careful perusal of Annexure-A clearly indicates that the fourth respondent before passing the order has not considered the details furnished by the petitioner as per Annexures F K, absolutely no discussion is made about the documents and information furnished by the petitioner and also the fourth respondent has not considered the details mentioned and documents produced along with the reply letter made by the petitioner as per Annexure-K, dated 08.04.2013 and as per Annexure-F, dated 12.06.2013. Absolutely no discussion is made with regard to contentions raised by the petitioner that how they are not entitled for the benefits under Served From India Scheme . If the fourth respondent has considered the reply made by the petitioner along with the documents, the fourth respondent ought to have given an opportunity of being heard instead of passing the order which is not a speaking order. Therefore, the impugned order passed by the fourth respondent cannot be sustained - matter remanded to fourth respondent with a direction to provide an opportunity of hearing - Petition allowed by way of remand.

Summary

Issues Involved:
1. Eligibility of the petitioner for benefits under the Served from India Scheme (SFIS).
2. Application of the principle of lifting of corporate veil by the respondents.
3. Validity and sufficiency of the impugned order passed by the respondents.

Detailed Analysis:

1. Eligibility of the Petitioner for Benefits under the Served from India Scheme (SFIS):

The petitioner, an Indian Company providing healthcare services, applied for Duty Free Credit Entitlement Certificate (DFCEC) under the SFIS as per the Foreign Trade Policy (FTP) 2004-2009. The petitioner argued that they are eligible under Para 9.53(ii) of the FTP, which includes "Supply of a Service from India to service consumer of any other country in India." Despite providing healthcare services to international patients in India, the respondents denied the benefits, asserting that the petitioner is a chain of hospitals based in Kuala Lumpur, Malaysia, and not promoting an Indian brand. The petitioner contested this, emphasizing their status as an Indian company duly incorporated under Indian law and fulfilling all statutory requirements.

2. Application of the Principle of Lifting of Corporate Veil by the Respondents:

The petitioner contended that the respondents' actions in treating them as a foreign entity amounted to an improper application of the principle of lifting the corporate veil. This principle, according to Indian law, should only be applied in cases of prima facie fraud or criminal intent, neither of which was alleged against the petitioner. The petitioner argued that their incorporation and functioning under Indian law should suffice to establish their eligibility for SFIS benefits.

3. Validity and Sufficiency of the Impugned Order Passed by the Respondents:

The petitioner argued that the impugned order was not a speaking order and failed to explain the legal basis for the respondents' change in stance from initially accepting the application to subsequently rejecting it. The petitioner highlighted that the policy's intent was to promote services from India, not specifically Indian brands. The respondents, however, maintained that the petitioner did not qualify as a "Service Provider" under Para 9.53 of the FTP, as their brand was not identified as Indian. The court noted that the respondents did not adequately consider the detailed representations and documents provided by the petitioner, nor did they offer an opportunity for a hearing before passing the impugned order.

Conclusion:

The court found that the respondents failed to consider the petitioner's detailed representations and documents before passing the impugned order. The order lacked sufficient reasoning and did not provide the petitioner an opportunity to be heard. Consequently, the court quashed the impugned order and remanded the matter to the fourth respondent, directing them to provide a hearing and consider all material and objections before passing a reasoned order in accordance with law.