2022 (10) TMI 444 - HC - Customs

Rejection of request of the Petitioner for no objection - benefit of merchandise under Merchandise Exports India Scheme (MEIS) under Chapter 3 of the Foreign Trade Policy 2015-20 - HELD THAT - The Merchandise Exports From India Scheme MEIS is an exporter incentive given to an exporter to offset the infrastructural inefficiencies and the associated costs. The aforesaid scheme entitles an exporter to duty credit script to be utilized for discharging the basic customs duty, additional customs duty specified under Section 3(1), 3(3) and 3(5) of the Customs Tariff Act, 1975 for import of inputs of goods including capital goods, as per DoR Notification, except in the case of listed goods under Appendix 3A to Foreign Trade Policy. The petitioner herein has failed to exercise the option in all the shipping bills unaware of the changes in the procedure. Though the Government has issued clarification dated 9-10-2015 in Public Notice No. 40/2015-2020 to the effect that Paragraph 3.01 of the Foreign Trade Policy 2015-20 does not allow manual feeding of EDA shipping bill details and following of such scheme is not possible manually, it is to be noticed that the aforesaid scheme in the Foreign Trade Policy is an incentive granted to an exporter - the petitioner herein has failed to exercise the option in all the shipping bills unaware of the changes in the procedure. Though the Government has issued clarification dated 9-10-2015 in Public Notice No. 40/2015-2020 to the effect that Paragraph 3.01 of the Foreign Trade Policy 2015-20 does not allow manual feeding of EDA shipping bill details and following of such scheme is not possible manually, it is to be noticed that the aforesaid scheme in the Foreign Trade Policy is an incentive granted to an exporter. In this case, there is only a procedural lapse. If the petitioner was otherwise entitled to the aforesaid exporter incentive and was not disentitled to the same, such benefit cannot be denied - the impugned order passed by the third respondent has to go as such export incentives cannot be denied on account of procedural lapse. Accordingly, the impugned order passed by the third respondent is quashed and the case is remitted back to the respondents to re-examine the issue as to whether the petitioner had indeed exported and was entitled to the exporter incentive under the aforesaid scheme, but for the lapse of not clicking the correct option in the System/Web Portal. The Writ Petition stands allowed.

Summary

Issues:
Challenge to rejection of request for no objection under MEIS scheme due to failure to make necessary declaration in shipping bills.

Analysis:
1. The petitioner, an exporter of auto mobile components, availed benefits under the Merchandise Exports India Scheme (MEIS) under the Foreign Trade Policy 2015-20.
2. Initially, it was understood that exercising the option once sufficed for claiming incentives on all exports. However, a 2016 amendment required exporters to declare the option in each shipping bill.
3. The petitioner exported goods in multiple bills but failed to declare the necessary information to claim MEIS benefits.
4. The MEIS scheme aims to offset infrastructural inefficiencies and promote manufacturing and export of specified goods.
5. The petitioner argued that the procedural lapse should not hinder the legitimate grant of export incentives.
6. The impugned order rejecting the petitioner's request was based on the failure to follow the updated procedure.
7. The respondents contended that the petitioner should have been vigilant in following the prescribed procedure to claim benefits.
8. The court considered previous decisions and emphasized the importance of procedural rules as servants of justice, not masters of law.
9. Referring to a similar case where relief was granted, the petitioner sought similar intervention in this matter.
10. The court noted that the petitioner was entitled to MEIS benefits despite the procedural lapse and quashed the impugned order.
11. The case was remitted back to the respondents for re-examination to determine the petitioner's eligibility for exporter incentives.
12. The respondents were directed to pass appropriate orders within four weeks if the petitioner met the criteria under the Foreign Trade Policy.

In conclusion, the Writ Petition was allowed, and no costs were imposed. The judgment emphasized the importance of substantive benefits over procedural lapses in cases involving legitimate entitlement to export incentives under the MEIS scheme.