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TMI Blog2014 (12) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... ence of an express provision enabling a delegate to make delegated Legislation with retrospective effect, no such power can be inferred. Section 5 of the Act does not empower the Central Government to frame policy with retrospective effect. Thus, the schemes framed under the Foreign Trade Policy cannot be altered or amended with retrospective effect. Benefit granted to the petitioners under the FPS has already been availed by them in terms of the Foreign Trade Policy as in vogue at the material time. Thus, the effect of the impugned circular is to recall a vested right; this, in my view, would also violate Article 300A of the Constitution of India. Neither the central government, nor DGFT would have the power to amend the Foreign Trade Policy or withdraw any export benefit with retrospective effect. The impugned circular inasmuch as it seeks to restrict the list of eligible items under entry 33 of Table 4 of Appendix 37D of the Handbook-I with retrospective effect is set aside. Accordingly, the impugned letters of demand are also set aside. - Decided in favour of assessee. - W.P.(C) 6387/2012 & CM No. 17030/2012, W.P.(C) 4754/2014 & CM 9467/2014 - - - Dated:- 8-12-2014 - Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . File No.05/50/87/01609/AM.12 (Licence No.0510295324 / 01.07.2011) : Rs.3,38,830/- 3. File No.05/50/87/01608/AM.12 (Licence No.0510295322 / 01.07.2011 : Rs.8,20,959/- 5. A similar letter dated 16.07.2012 was also issued to M/s Kavish Impex Pvt. Ltd. (petitioner in W.P.(C) 4754/2014) calling upon the said petitioner to refund the amount of duty in respect of said scrips along with interest. The details of the scrips and the amount of refund sought is as under:- 1. File No.05/50/87/02710/AM.12 (Licence No.0510299562 / 12.08.2011) Recovery Amount : ₹ 22,08,781/- 2. File no.05/50/87/02711/AM.12 (Licence No.0510299561 / 12.08.2011) Recovery Amount : ₹ 29,18,898/- 6. Both the petitioners have, accordingly, prayed that the said letters of demand dated 16.07.2012 (hereafter the impugned letters of demand ) be set aside. 7. The principal question to be addressed is whether the Director General of Foreign Trade (hereafter DGFT ) could issue the impugned circular to recall a benefit provided to the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision thereon shall be final and binding. Procedure 2.4 DGFT may, specify procedure to be followed for an exporter or importer or by any licensing or any other competent authority for purpose of implementing provisions of FT (D R) Act, the Rules and the Orders made thereunder and FTP. Such procedures shall be published by means of a Public Notice, and may, in like manner, be amended from time to time. 11. Chapter 3 of the Foreign Trade Policy contains promotional measures with respect to foreign trade, initiated by the Government of India. Paragraph 3.15 of the Foreign Trade Policy contains provisions for the FPS and is quoted below for ready reference:- 3.15 FOCUS PRODUCT SCHEME (FPS) Objective 3.15.1 Objective is to incentivise export of such products which have high export intensity / employment potential, so as to offset infrastructure inefficiencies and other associated costs involved in marketing of these products. Entitlement 3.15.2 Exports of notified products (as in Appendix 37D of HBPv1) to all countries (including SEZ units) shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33 5407 TECHNICAL TEXTILES WOVEN FABRICS OF SYNTHETIC FILAMENT YARN 14. If one examines the scheme of the Act, the Foreign Trade Policy as well as the role of DGFT, it is clear that whilst Central Government is empowered to frame the Foreign Trade Policy, the role of DGFT is essentially to specify the procedure to be followed by an importer and exporter for implementing the Foreign Trade Policy and to clarify any question or doubt in respect of interpretation of any provisions contained in Foreign Trade Policy or classification of any item in the ITC (HS) Code or the Handbook of the Procedures. The policy to grant export incentives by way of the FPS is an integral part of the Foreign Trade Policy; the role of DGFT with regard to the same is limited to specifying the procedures to be followed by an importer and exporter for implementing the said scheme and providing any clarification in that regard, where necessary. The Hand Book of Procedures has been framed by the DGFT in exercise of functions entrusted under paragraph 2.4 of the Foreign Trade Policy and as paragraph 3.15.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid, the interpretation of the words Technical Textiles has never been in any doubt and its interpretation cannot be called in question. However, it has been contended on behalf of the respondent that it was not the legislative intent to include polyester printed fabrics as technical textiles and it was never intended to include all items as specified under the ITC (HS) Code 5407 but only a few limited items. It was submitted that as it was found that exporters were availing of the FPS benefits for various products, the DGFT proceeded to issue the impugned circular, which must be read as clarificatory. 19. Undoubtedly, any question or doubt, which arises in respect of interpretation of any provision contained in the Foreign Trade Policy or classification of any item in the ITC (HS) or Handbook-I, is to be referred to DGFT. However, this is not a case where any doubt as to classification could be entertained. The entry in question is unambiguous and leaves no scope for any doubt. Although, the impugned circular mentions that clarifications have been sought by regional authorities with regard to the products classified under ITC (HS) Code 5407, the effect of the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export of which are eligible for incentive under the FPS with retrospective effect. 22. The above question needs to be answered in light of the provisions of Section 5 and Section 6 of the Act. In terms of Section 5, the Central Government is empowered to formulate and announce the Foreign Trade Policy and/or also in the like manner amend that policy. 23. A bare reading of the provisions of Section 5 of the Act indicates that a policy cannot be made with retrospective effect. The expression formulate and announce used in Section 5 clearly means that the power is to be exercised prospectively. The Supreme Court in Union of India v. Asian Food Industries: (2006) 13 SCC 542 held as under:- 48. The Delhi High Court, however, in our view correctly opined that the Notification dated 4-7-2006 could not have been taken into consideration on the basis of the purported publicity made in the proposed change in the export policy in electronic or print media. Prohibition promulgated by a statutory order in terms of Section 5 read with the relevant provisions of the policy decision in the light of sub-section (2) of Section 3 of the 1992 Act can only have a prospective effect. By re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the power of implementing the Foreign Trade Policy to withdraw the DEPB benefits on the export of cotton with retrospective effect from 21 April 2010. The rationale for the withdrawal was that with effect from 21 April 2010 the policy of the Union Government was not to grant incentives on the export of cotton or cotton yarn as was reflected in the notice dated 21 April 2010 withdrawing DEPB benefits on cotton yarn. Moreover, it was urged that there was an export tax which was withdrawn only on 1 April 2010. Whatever be the motive, the exercise of powers has to be in a manner which is consistent with the statute. A Special Leave Petition (SLP No.12266/2012) filed against the decision of the Division Bench of the Bombay High Court is pending before the Supreme Court. 27. In the case of Mahabir Vegetables Oils (P) Ltd. Anr. v. State of Haryana Ors.: (2006) 3 SCC 620, the Supreme Court had held as under:- 41. We may at this stage consider the effect of omission of the said note. It is beyond any cavil that a subordinate legislation can be given a retrospective effect and retroactive operation, if any power in this behalf is contained in the main Act. The rule-makin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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