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2020 (6) TMI 40 - HC - CustomsDuty Free Credit Entitlement Scheme - validity of Notification no.28 dated 28.01.2004 - third party exports - status holder - petitioner filed application before the respondent, contending therein that out of the total exports of ₹ 1070.35 crores made by the petitioner between 01.04.2003 to 31.03.2004, exports of ₹ 355.69 crores had become ineligible in view of the exclusion set out in Notification dated 28.01.2004, leaving the eligible exports at ₹ 714.66 crores entitled for the benefit of the DFCE Scheme - respondent has rejected the application of the petitioner relying upon the judgment of the Supreme Court and observing that in terms thereof, the petitioner is not eligible to any benefit under DFCE Scheme as claimed. HELD THAT - The Supreme Court in its judgment dated 27.10.2015 2015 (11) TMI 80 - SUPREME COURT had inter alia considered the letter dated 13.10.2003 addressed by the Joint Secretary, Govt. of India, Central Board of Excise and Customs, addressed to the DGFT as also various other contemporaneous letters/Circulars/Minutes of Meeting leading up to the issuance of the Notifications dated 21.04.2004 and 23.04.2004. It also took note of the counter affidavit filed by the Union of India, giving details of the modus operandi used by the exporters in inflating their exports to claim benefit of the DFCE Scheme - In the counter affidavit, specific reference was made by the respondents to the petitioner herein to contend that the petitioner has shown an exponential growth in its exports of 3816% against the National Growth of Export of merely 18%. The petitioner in fact, filed a Review Petition seeking review of the said judgment, which was also dismissed by the Supreme Court. In the Review Petition, the petitioner had categorically contended that the finding of the Supreme Court that held the petitioner as having resorted to paper transactions was not justified as the respondents had not placed any material on record against the petitioner to prove the same. Relevant paragraphs of the Review Petition have been quoted hereinabove. The Review Petition was, however, dismissed by the Supreme Court - The petitioner certainly could not have been allowed to re-agitate As far as seeking parity with M/s Adani Export Ltd. is concerned, there can be no equality achieved in the violation of law. There is no right stipulated under Article 14 of the Constitution of India in the negative. Therefore, merely because the respondents have granted some relief to M/s Adani Export Ltd. or have not made any recoveries from it, cannot entitle the petitioner, by itself, to claim benefit under the DFCE Scheme in spite of the clear and categorical judgment of the Supreme Court holding it to be not entitled for the same. Petition dismissed.
Issues Involved:
1. Validity of the order dated 28.12.2017 denying the petitioner benefits under the Duty Free Credit Entitlement (DFCE) Scheme. 2. Interpretation and application of various notifications and public notices issued under the Export-Import (EXIM) Policy 2002-2007. 3. Determination of vested rights under the DFCE Scheme. 4. Allegations of fraudulent exports and misuse of the DFCE Scheme. 5. Parity in treatment with other exporters, specifically M/s Adani Export Ltd. Detailed Analysis: 1. Validity of the order dated 28.12.2017: The petitioner challenged the order dated 28.12.2017 by respondent no.3, which declared the petitioner ineligible for benefits under the DFCE Scheme. The petitioner argued that the Supreme Court's judgment did not specifically address their eligibility under the scheme but rather focused on the validity of certain notifications and public notices. However, the court found that the Supreme Court had indeed considered the petitioner’s case, particularly noting the exponential growth in exports and the misuse of the scheme. The Supreme Court's findings were binding, and the petitioner could not re-agitate its eligibility. 2. Interpretation and application of notifications and public notices: The Government of India, under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992, notified the EXIM Policy 2002-2007, which included provisions for the DFCE Scheme. Various amendments and notifications were issued, including Notification no.28 dated 28.01.2004, which was held to be clarificatory and valid, and Notifications dated 21.04.2004 and 23.04.2004, which were held to be prospective. The Supreme Court upheld these interpretations, and the petitioner’s argument that the notifications could not retrospectively affect vested rights was rejected based on findings of fraudulent activities. 3. Determination of vested rights under the DFCE Scheme: The Supreme Court held that exporters who achieved a 25% incremental growth in exports acquired a right to receive benefits under the scheme, which could not be taken away. However, this right did not vest in exporters whose growth was achieved through fraudulent means. The court found that the petitioner’s exports were inflated through fraudulent methods, thus disqualifying them from claiming vested rights under the scheme. 4. Allegations of fraudulent exports and misuse of the DFCE Scheme: The Supreme Court detailed various fraudulent practices used by exporters, including the petitioner, to inflate export figures. These included exporting rough diamonds despite India not being a producer, re-exporting cut and polished diamonds with artificial value addition, and exporting gold medallions and jewellery to related entities to avoid import duties. The petitioner’s exponential growth in exports was found to be part of such fraudulent activities, leading to the denial of benefits under the DFCE Scheme. 5. Parity in treatment with other exporters: The petitioner argued that they should be treated on par with M/s Adani Export Ltd., which allegedly received benefits under the scheme despite similar findings. The court rejected this argument, stating that there is no right to equality in the violation of law. The petitioner’s claim for benefits was dismissed based on the Supreme Court’s clear and categorical judgment. Conclusion: The petition was dismissed, and the petitioner was ordered to pay costs of ?1 lakh to the 'PM CARES' Fund. The court upheld the findings of the Supreme Court regarding the misuse of the DFCE Scheme and the ineligibility of the petitioner for benefits under the scheme. The Supreme Court's judgment was found to be specific and binding, and the petitioner could not re-agitate the issues already decided.
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