9911796707
TMI Blog2015 (1) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferred. While granting relaxation of conditions of non-transferability of Duty Credit Scrip within group companies, it has not put any further restrictions. Para 9.28 only deals with definition of term Group Company. On reading of this definition, it would mean that to qualify to be a group company, an enterprise must have minimum of 26% or more voting rights or in a position to appoint more than 50% of Board of Directors in another company. It does not envisage that the company which earned Duty Credit Scrips alone should hold 26 % or more voting rights or has power to appoint more than 50 % of Board of Directors in the other company. On a plain reading, neither the provision in para 3.12.7 nor definition in para 9.28 seeks to restrict t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Scheme. These scrips are transferable within the group company. Therefore, petitioner requested the Director General of Foreign Trade to permit utilisation of scrips by GHIAL. Petitioner submitted a representation dated 20.12.2013 requesting to grant such permission. In response, by letter dated 12.2.2014, the petitioner was asked to furnish documentary evidence as per para 9.28 of the Foreign Trade Policy for the years 2009-2014 duly attested by Registrar of Companies to process the case further. On application, the Registrar of Companies, informed that no such certificate can be issued. Therefore, a certificate from M/s. Brahmayya Company, Chartered Accountant of GHIAL was obtained and submitted in lieu of requirement of certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without jurisdiction and competency and rejection of the request of the petitioner on the ground that petitioner does not hold minimum 26 % shareholding in GHIAL is contrary to Foreign Trade Policy. 4. Learned senior counsel further contended that the scheme is a beneficial provision and has to be liberally construed. The scheme is to encourage foreign trade. Thus, facility of utilisation of scrips obtained on account of such foreign trade carried out by one company be utilised by another company is also intend to encourage foreign trade. This encourages the group companies to actively involve in foreign trade and earn good returns. The interpretation placed by the Policy Interpretation Committee and applied by the Director General is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Tata Teleservices Maharastra Limited and M/s.Essar Oil Limited, the facts are identical and request was rejected by applying the provisions in para 9.28 of the Foreign Trade Policy strictly. He therefore submits that decision communicated to the petitioner is valid and is not erroneous nor illegal or arbitrary warranting interference by this Court. 7. With an objective to facilitate imports and to augment export, Foreign Trade (Development and Regulation) Act, 1992 (Act 22 of 1992) was made. From time to time Central Government notifies Foreign Trade Policy (FTP). Last such policy was notified in the year 2009 operative for a period from 2009 to 2014. Wherever necessary, changes were effected in the meantime. The policy sets out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... six percent, or more of voting rights in other enterprise; or (b) Appoint more than fifty percent of members of board of directors in the other enterprise. For group companies to claim benefits or have their exports counted for benefits to be claimed by another member of group, the group company should have been in existence at least 2 years prior to date of application under any of export promotion schemes notified in Foreign Trade Policy. 11. Cumulative reading of objectives of the Act and the FTP, more particularly various incentives incorporated in Chapter 3, would show that Central Government is giving lot of impetus to encourage exports, more particularly in service sector. As part of this impetus, the Duty Credit Scrips are is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not envisaged and impose an additional restriction. The Director General of Foreign Trade has only power to interpret the existing clauses but cannot seek to amend or alter the Foreign Trade Policy terms. The impugned decision amounts to altering the terms of Served From India Scheme and is in excess of power and jurisdiction vested in him. For the foregoing reasons, the impugned proceedings dated 22.7.2014 is set aside and second respondent is directed to receive served from India Duty Credit scrip No.09100566123 dated 4.7.2013 and transfer the same in favour of GMR Hyderabad International Airport Limited in terms of Foreign Trade Policy 2009-2014, if necessary by extending the period of validity for a further period of six months from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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