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2021 (4) TMI 1233 - HC - CustomsInterpretation of statute - Paragraph 3.09(2)(i) of the FTP in so far as it excludes Service Providers in Telecom Sector from the benefit of SEIS - Benefit under Service Exports from India Scheme (SEIS) - Duty Drawback Scrips on foreign exchange remittance - HELD THAT - The Service Providers in Telecom Sector meant and included only the Telecom Service Providers of services mentioned therein. The ambit and scope of such exclusion was not of Service Providers who render services to such Telecom Service Providers - Though, a similar list is not appended to FTP or HBPv1, there is no reason for a different interpretation to be placed to FTP 2015-20. Clearly, what was made ineligible for availing benefit of SEIS in terms of paragraph 3.09(2)(i) are the Telecom Service Providers and not the Service Providers who provide services to such Telecom Sector. The Foreign Trade Policy is clear and unambiguous inasmuch as it excludes the Telecom Service Providers from the benefit of the SEIS and not the Service Providers who provide services to such Telecom Service Providers. As noted hereinabove, the ambit of the term was clearly spelled out in S.No. 2(C) of Appendix-10 to HBPv1 to FTP 2009-14. No different intention regarding the same is discernible from the FTP 2015-20 - the Service Provider is one who in terms of a license granted under Section 4 of the Indian Telegraph Act, 1885 provides Telecommunication Services as defined under Section 2(k) of the TRAI Act. I see no reasons to interpret Service Providers in Telecom Sector in the FTP differently. Thus, exclusion of Service Providers in Telecom Sector from benefit of SEIS is of a service provider providing telecom services. The Impugned Instructions dated 22.05.2019, therefore, sought to impose fresh restrictions on the eligibility of the service providers entitled to the benefit under SEIS, which amounted to amendment in the policy, and is therefore, ultra vires the Foreign Trade Policy - there is no ambiguity in the FTP on the scope of exclusion from SEIS benefit as provided in Paragraph 3.09(2)(i) thereof, even if one is to hold otherwise, the above principles would apply and the interpretation sought to be placed by the respondent on the said provision cannot be sustained. Where the impugned Instructions/Circular dated 22.05.2019 has been issued under the instructions of the DGFT itself, the remedy of appeal under Section 15 of the Act would clearly be otiose and redundant. As far as the remedy under Section 16 of the Act is concerned, once it is held that the Impugned Orders have been passed on basis of Instructions which are otherwise ultra vires the Act, the petitioner cannot be denied the benefit of an original adjudication on merits and the decision on an appeal under Section 15 of the Act in accordance with law, and be relegated only to a remedy of review. The respondents are directed to consider the claims of the petitioner(s) under the SEIS afresh and in accordance with FTP 2015-20 - Petition allowed.
Issues Involved:
1. Validity of instructions dated 22.05.2019 issued by respondent no. 4. 2. Eligibility of services provided by the petitioner under the Service Exports from India Scheme (SEIS). 3. Power of respondent no. 2 to modify the Foreign Trade Policy (FTP). 4. Violation of principles of natural justice. 5. Maintainability of writ petition due to the existence of an alternative remedy. Detailed Analysis: 1. Validity of Instructions Dated 22.05.2019: The petitioner challenged the instructions dated 22.05.2019, which declared that all services in the Telecom Sector are ineligible for SEIS benefits. The court found these instructions ultra vires the FTP, stating that the DGFT does not have the authority to amend the FTP by issuing instructions or circulars. The court held that the exclusion of "Service Providers in Telecom Sector" in Paragraph 3.09(2)(i) of the FTP refers specifically to telecom service providers and not to service providers offering services to the telecom sector. 2. Eligibility of Services Provided by the Petitioner Under SEIS: The petitioner claimed eligibility for SEIS benefits for Engineering Services under CPC Code 8672 and Management Consulting Services under CPC Code 865. The court noted that the respondents had not properly considered whether the services rendered by the petitioner fell under these CPC codes but had instead broadly declared all services in the Telecom Sector ineligible. The court emphasized that the FTP's exclusion applies only to telecom service providers themselves, not to those providing ancillary services. 3. Power of Respondent No. 2 to Modify the FTP: The court reiterated that the power to amend the FTP rests solely with the Central Government under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. Respondent no. 2, the DGFT, only has the authority to advise the Central Government and carry out the policy but cannot modify it. The instructions issued by the DGFT were deemed an unauthorized modification of the FTP. 4. Violation of Principles of Natural Justice: The petitioner argued that the orders were passed without granting an opportunity of hearing, violating the principles of natural justice. The court agreed, noting that the respondent no. 3 had acted on the instructions of respondent nos. 2 and 4 without independent adjudication. The court held that such quasi-judicial decisions must be made independently and not be influenced by superior authorities' instructions. 5. Maintainability of Writ Petition Due to the Existence of an Alternative Remedy: The respondents contended that the petitioner had an alternative remedy of appeal under Section 15 and review under Section 16 of the Act. However, the court held that since the impugned orders were based on ultra vires instructions, the appeal would be futile. The court cited precedents where it was held that if the basis of the order is invalid, the availability of an alternative remedy does not bar the exercise of jurisdiction under Article 226 of the Constitution of India. Conclusion: The court set aside the impugned instructions dated 22.05.2019 and the subsequent orders dated 11.06.2019 and 03.06.2019. It directed the respondents to reconsider the petitioner's claims under SEIS afresh, in accordance with the FTP 2015-20, and to pass a reasoned order within eight weeks, after giving the petitioner an opportunity of hearing. The petitions were allowed with no order as to costs.
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