9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (10) TMI 753 - HC - CustomsExports of valves for industrial uses - Recovery of benefit Focus Product Scheme (FPS) - Denial of benefit of Merchandise Exports from India Scheme (MEIS) under the new policy - legislative intention - Validity of trade notice issued by DGFT - Held that - The scheme(FPS) came to an end on 31.03.2015. Long after that, DGFT issued the impugned clarificatory circular, in which, it is provided that the intention all along had been to grant the incentives to bicycle parts only. The other items, which are not parts of bicycle appearing in the said description, are not eligible for the benefit. Strictly speaking, though the new policy may not provide a safe guide to interpret the old policy, we may take note of the contents of the new policy also. This is for the reason that if the Government of India noted a mismatch between the heading and the contents of an entry, the reasonable way to resolve the discrepancy would be to delete that portion which was unintentional. DGFT has powers to issue a circular / clarificatrion - However, a clarification cannot run counter to the plain interpretation of the provision and in guise of clarification, an entry cannot be amended. The power to amend an entry would be with the Government of India. Quite apart from the nature of the impugned trade notice, in any case, the respondents could not have stalled processing of the petitioners applications for export benefits flowing from the MEIS which would stand on entirely different footing. Even if the petitioners were to refund the benefits already received under FPS, the respondents would have to follow the procedure for ensuring recoveries. Merely stalling the petitioners applications for grant of export benefits flowing under a fresh scheme would simply not be permissible. The impugned trade notice dated 14.12.2015 is quashed. The respondents shall not seek any recoveries of the export incentives granted to the petitioners under FPS and shall process further their applications for export benefits under MEIS in accordance with the provisions made therein. - Decided in favor of petitioners.
Issues Involved:
1. Validity of Trade Notice No. 11 of 2015 dated 14.12.2015 issued by DGFT. 2. Retrospective application of the trade notice. 3. Recovery of benefits already granted under the Focus Product Scheme (FPS). 4. Withholding of benefits under the Merchandise Exports from India Scheme (MEIS). Detailed Analysis: 1. Validity of Trade Notice No. 11 of 2015 dated 14.12.2015 issued by DGFT: The petitioners challenged Trade Notice No. 11 of 2015 issued by the Director General of Foreign Trade (DGFT), which clarified that the intention behind Entry No. 269 in Appendix 37-D was to grant incentives only to bicycle parts. The court observed that the trade notice did not merely clarify but effectively amended the entry itself. The entry included items such as taps, cocks, and valves, which are not typically used in bicycles. The clarification sought to exclude these items, rendering the entry meaningless. The court held that a clarification cannot amend the entry and that the power to amend lies with the Government of India. Therefore, the trade notice was not valid. 2. Retrospective application of the trade notice: The petitioners argued that the trade notice could not be applied retrospectively to cases that were closed long ago. The court agreed, stating that the DGFT does not have the power to issue circulars with retrospective effect. The Foreign Trade Policy (FTP) 2009-14 recognized the DGFT's authority to issue clarifications, but such clarifications must not contradict the plain interpretation of the policy. The court cited previous judgments to support the view that retrospective amendments are not permissible unless specifically conferred by statute. 3. Recovery of benefits already granted under the Focus Product Scheme (FPS): The respondents initiated actions to recover benefits already granted under the FPS, based on the impugned trade notice. The court observed that the petitioners had made correct declarations in their applications, and the benefits were granted accordingly. The scheme ended on 31.03.2015, and the trade notice was issued much later. The court held that the respondents could not seek recoveries based on a clarification that effectively amended the entry. The DGFT's intention to grant incentives only to bicycle parts was not evident from the entry's language, which included items not used in bicycles. 4. Withholding of benefits under the Merchandise Exports from India Scheme (MEIS): The respondents withheld benefits under the MEIS, citing the petitioners' failure to refund benefits under the FPS. The court found this action impermissible. The MEIS was a new scheme with its own provisions, and the respondents could not stall the petitioners' applications for benefits under it. The court directed the respondents to process the petitioners' applications for export benefits under the MEIS in accordance with its provisions. Conclusion: The court quashed the impugned trade notice dated 14.12.2015 and directed the respondents not to seek recoveries of the export incentives granted under the FPS. The respondents were also instructed to process the petitioners' applications for export benefits under the MEIS. All petitions were allowed and disposed of accordingly.
|
