2023 (7) TMI 450 - HC - Customs

SEIS scheme - retrospective effect of notification dated 23 September, 2021 - contention of the petitioner is that the petitioner is entitled to duty credit scrip in respect of such foreign exchange earning inasmuch as the said earnings were made in due consideration to the policy which was prevailing at that point of time, i.e., FTP 2015-2020. Whether the petitioner in the facts and circumstances of the case and with the bonafides the petitioner is contending, in the petitioner s case the impugned notification ought not to have been applied till 31 December, 2021, in respect of balance amount of foreign exchange as earned which is stated to be about 23 crores? HELD THAT - In the peculiar facts and circumstances of the case, it would be appropriate that the petitioner is permitted to make an application to the Designated Officer of the respondents to make a claim for the entitlement to the balance foreign exchange as earned and to that effect its entitlement to duty credit scripts asserting non-applicability of the impugned notification. Let such application be made as permitted by the earlier order within two weeks from today. If such an application is made, the same be decided within a period of six weeks from the day it is filed, on its own merits. While deciding such application, the concerned authority should consider whether in the facts of the petitioner s case, the petitioner could be exempted from applicability of the impugned notification and/or whether it would be entitled to take the benefit of the entire foreign exchange earning for the FY 2019-20. All contentions of the petitioner to raise the challenge as raised in the petition as and when the need so arises, including all contentions of the revenue are expressly kept open. Petition disposed off.

Summary

Issues:
The judgment involves a petition challenging a notification dated 23 September, 2021, which affects the petitioner's entitlement under the SEIS scheme for the financial year 2019-2020, imposing a ceiling of INR 5 crores and reducing the rate from 7% to 5% for management consultants. The petitioner seeks various reliefs including quashing the notification and directing the respondents to grant the benefit of the SEIS scheme as per previous notifications under the FTP.

Comprehensive Details:

1. Challenge to Notification:
The petitioner challenges the notification dated 23 September, 2021, arguing that it adversely affects the petitioner by retrospectively curbing the benefits under the SEIS scheme for the period from 2019-2020. The petitioner contends that the impugned notification is illegal and cannot be applied retrospectively, as the petitioner was entitled to benefits under the Foreign Trade Policy 2015-20 before the notification.

2. Respondents' Response:
The respondents file a detailed affidavit-in-reply opposing the prayers in the writ petition and raising an objection that the petitioner has an alternate remedy available under paragraph 2.59 of the FTP 2015-2020.

3. Alternate Remedy Objection:
The petitioner's counsel argues against the objection of an alternate remedy, stating that the challenge is to a notification issued by the highest authority, the Government of India, making the alternate remedy inadequate and inefficacious in this case.

4. Court Order and Application:
A co-ordinate Bench of the Court passes an order on 17 December, 2021, allowing the petitioner to file an online application for SEIS benefits up to Rs. 5 crores per IEC. The petitioner avails of this permission, seeking benefits for foreign exchange earnings up to about 23 crores, contending that the impugned notification should not have been applied until 31 December, 2021, based on the prevailing policy.

5. Decision and Relief Granted:
The Court, without delving into the merits of the contentions, permits the petitioner to apply to the Designated Officer to claim entitlement to the balance foreign exchange earnings and duty credit scrips, asserting the non-applicability of the impugned notification. The application is to be decided within six weeks on its own merits, considering the petitioner's case for exemption from the notification's applicability.

6. Final Disposition:
The Court disposes of the petition, granting the relief for the petitioner to make an application for the balance foreign exchange earnings within two weeks, to be decided within six weeks. All contentions are kept open for future challenges, and no costs are awarded in this matter.