2022 (7) TMI 723 - HC - Customs

Denial of Duty Free Credit Entitlement DFCE Certificate to the petitioner - whether the petitioner was status holder or a Star Export House? - HELD THAT - The petitioner had satisfied the requirements of the amended provisions of the scheme. The stand of the respondents that de hors the amendment, the petitioner should have been a status holder for the year 2002-03 is in negation of the rights conferred on the petitioner under the Amendment and therefore, the said stand cannot be sustained. There will be a direction to the respondents to issue the relevant benefit under the current scheme known as ''Merchandise Exports from India'' Scheme formerly known as ''DFCE Scheme/Target Plus Scheme'' to the petitioner as claimed by the petitioner - petition allowed.

Summary

Issues:
Challenge to denial of Duty Free Credit Entitlement Certificate.

Analysis:
1. The petitioner, a producer and exporter of electrical goods, was denied a Duty Free Credit Entitlement (DFCE) Certificate, which is granted under a scheme for encouraging exports based on incremental growth in export value.
2. The scheme allows for a concession in import duty for exporters showing over 25% growth in export value, with the concession being 10% of the increase. The petitioner's application for a DFCE Certificate was rejected despite meeting the condition of using imported goods in the manufacturing process.
3. The petitioner, though belatedly registered as an Export House, was recognized as a Star Export House as of 01.04.2003 by the Government of India. The petitioner's application for a DFCE Certificate was initially rejected, but upon a court order for reconsideration, the rejection was set aside for lack of sufficient reasons in the decision.
4. After a remand, authorities again rejected the petitioner's claim, stating that the petitioner needed to be a status holder for the years 2002 and 2003 to qualify for the scheme benefits.
5. The petitioner argued that an amendment to the scheme removed the requirement of being a status holder as of 31.03.2003, stating that being recognized as a Star Export House with a minimum export turnover in 2003-04 was sufficient for eligibility.
6. The Union of India contended that the amendment did not change the requirement of being a status holder as of 31.03.2003, which was necessary to obtain a DFCE Certificate.
7. The Court disagreed with the Union's interpretation, stating that the amendment dispensed with the need for the applicant to be a status holder as of 31.03.2003, requiring only recognition as a status holder or Star Export House with a minimum export turnover in 2003-04.
8. As the petitioner was recognized as a Star Export House as of 01.04.2003, meeting the amended scheme's requirements, the Court held that the petitioner was entitled to the benefits and directed the authorities to issue the relevant benefit under the current scheme.

This detailed analysis of the judgment highlights the issues, arguments presented by both parties, the court's interpretation of the law, and the final decision in favor of the petitioner.