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TMI Blog2011 (7) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... est, the Petition is taken up for hearing and final disposal. 2. This Petition has been listed for hearing and final disposal with a companion Petition (Vodafone Essar Ltd. vs. Union of India and ors.)1 which was decided on 17 June 2011. The challenge in those proceedings before the Court was to a Circular dated 15 July 2010 issued by the Directorate General of Foreign Trade and to several notices issued by the Zonal Joint Director and by the Joint Director General, purporting to revoking the benefit granted under the Served From India Scheme (SFIS). The scheme was formulated under the Foreign Trade Policy for 2004-09. The circular under challenge was in turn based on the minutes of a meeting of the Policy Interpretation Committee (PIC) dated 5 July 2010. Counsel for the Petitioners has confined the challenge in these proceedings to the decisions taken at serial nos. 1, 2(b), 4(ii) and 4(iii) by the PIC which were directed to be implemented by the Circular dated 5 July 2010. 3. In the companion Petition, by a judgment delivered by this Court on 17 June 2011, the Circular has been quashed and set aside in respect of the directions contained therein to implement the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnectivity with India in the provision of dedicated bandwidth services. In respect of those services, the Petitioners contract with foreign Telecommunication carriers for the provision of dedicated bandwidth between two points one of which is located in India. Payment is received for the services provided in foreign exchange. The services are provided by the Petitioners under a cohesive service contract whereby data can be transmitted between two points one of which is located in India and the other abroad. The Petitioners have stated before the Court that they do not charge separately for capacity usage in respect of the portion of the cable located in India and the portion of the cable located outside India. The Petitioners claim SFIS benefits in respect of foreign exchange that they have earned and received from foreign telecommunication carriers for eligible services covered by Appendix10 to the Handbook of Procedures of the Foreign Trade Policy for 2004-09. 5. The objective of the SFIS is prescribed in paragraph 3.6.4.1 of the Foreign Trade Policy as follows: "3.6.4.1 Objective Objective is to accelerate growth in export of services so as to create a powerful and uniqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice providers, a statement was made before the Delhi High Court that the grievance of the Petitioners there would be met if the Policy Interpretation Committee (PIC) of the DGFT would consider the Petitioners' representation and clarify the position. 9. Pursuant to the orders of the Delhi High Court, the Policy Interpretation Committee held a meeting on 5 July 2010 for dealing with a case involving a Telecommunications service provider. The minutes of the meeting sought to clarify the entitlement to SFIS benefits to Telecommunications providers in several situations. Following this, the DGFT issued a policy circular on 15 July 2010 which mandated that all Regional Authorities would review previously sanctioned cases and that the entitlement in each case would be recomputed in terms of the decision taken. The Regional Authorities were directed to initiate recoveries in the event that benefits in excess of what was permissible were provided. 10. The challenge in these proceedings by the Petitioners is to the decision contained at points 2(b), 4(ii) and 4(iii) of the minutes of the PIC. The first part of the challenge, as noted earlier, is covered by the judgment delivered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these facts, which have not been disputed at the hearing, the Petitioners would fall within the definition of the expression "service provider" in Paragraph 9.53 of the Scheme. Transmission of data, voice or video utilising the facility of an optic fibre cable laid by the Petitioners undersea from a point within India to an overseas destination in one continuous and scamless transaction would constitute a supply of a service from India to any other country within the meaning of clause (i) or the supply of a service from India through commercial or physical presence in the territory of any other country within the meaning of clause (iii). 13. Counsel appearing on behalf of the Respondents submitted that the PIC, in the course of its decision rendered on 5 July 2010, proceeded on the basis that the rentals from optic fibre cables in India could be dealt with as a separate category from rentals from optic fibre cables overseas. Counsel submitted that the situation which the Petitioners have postulated before the Court namely of a transmission of data/voice/video on a continuous fibre optic cable from a point in India to an overseas destination was not before and was not hence cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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