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TMI Blog2015 (5) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... nstance, in items covered under product Code 1 to 7, the relevant date was taken as 1st April, 2004. In chapter 33 of ITC (HS), Oleoresins specified in the list of items under product code 7A qualified for benefit from 1st April, 2005. Product code 8.106 only included the plant Mentha (Japanese pudina) (Mentha arvensis) which qualified for export benefit on 1st April, 2004. These did not in our view include the products derived from Mentha Arvensis. Mentha Arvensis, Linn (Mint, Pudina) covered by product code 08.432 qualified with effect from 1st April, 2004. The distinction drawn between product code 08.432 Mentha Arvensis (Mint, Pudina) and 08.438 described as Mintha Arvensis (Podina) itself makes it obvious that they are different variants of Mentha Arvensis covered by product code 08.106, 08.432 and 08.438. Petitioners’ specific products i.e. value added extracts of Mentha such as Menthol BP/USP, Menthol Crystal BP/USP, Mentha oil IP were covered by product code 11 and were undoubtedly, different from those covered by product code 08.106, 08.432 and 08.438. In addition, even within product code 11, we find different kinds of Mentha derived product. For instance, 11.114 refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2006 as a result of which, the Petitioners were permitted the benefit of the Yojana only from 1st April, 2007 as against 1st April, 2004 when the Yojana was first announced. According to the Petitioners, they are entitled to the benefit of export of Menthol and Mentha Oil exported even during the period from 1st April, 2004 to 31st March, 2007 by operation of law. 5. Before proceeding further, it would be appropriate that we examine the features of the Yojana which was introduced with the stated objective of promoting exports of fruits, vegetables, flowers and minor forest produce in the year 2004. As a matter of policy, in each subsequent year, the items eligible for the benefits under the Yojana were increased or altered. In some cases, it became more descriptive. The Petitioners were given benefit of the Yojana only from 1st April, 2007 as a result of the fact that the product exported by the Petitioners was specified for the first time vide policy circular dated 28th February, 2006. 6. It is the Petitioners case that they are entitled to the benefit of the Yojana irrespective of the impugned circular by virtue of the fact that the relevant foreign trade policy came int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d minor forest produce. Thereafter, in each year the number of items covered by the Yojana was increased by amendment to the Yojana and the Appendix 37A to the Handbook of Procedures. Under the umbrella Policy for 2004-09, the Petitioners products were covered by Appendix 37A under the general heading Mentha (Japanese pudina) Mentha Arvensis under product code 08.106 which classifies Minor Forest Produce at serial No.106. 8. Some of the other features of the Yojana are as follows : Under paragraph 3.8.3 of the Yojana duty credit may be used for import of inputs or goods including capital goods as may be notified provided the same is importable under ITC (HS). Paragraph 3.8.4 provided that additional custom duty/excise duty paid in cash or through debit under Vishesh Krishi Upaj Yojana shall be adjusted as Cenvat credit or Duty drawback as per rules framed by the Department of Revenue. Under paragraph 3.8.5 the Government reserved the right, in public interest, to specify from time to time, the export products which shall not be eligible for calculation of entitlement. This provision assumes significance in the facts of the present case. 9. As can be seen from the table ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mentha for the first time in the supplement of 2007-08. 12. It is the case of the Respondents that the Petitioners are not entitled to claim the said benefits with effect from 1st April, 2004 because according to the Respondents, the Petitioners products of the herb Mentha were not notified under Appendix 37A under product code 08.106 or any other product code shown under head minor forest produce till the circular/notification was issued effective from 1st April, 2007. 13. Mr. Sridharan Learned Senior Counsel strenuously urged that the Petitioners product, value added products of Mentha were already covered under product code 8 general description Mentha Arvensis. He submitted that Vishesh Krishi Upaj Yojana was part of the foreign trade policy itself. The trade policy categorically mentions that the benefits would be available from 1st April, 2004. The details of which were thereafter provided under the handbook of procedures under paragraph 3.19. It was submitted that objective of the Yojana was to promote exports of the items mentioned in paragraph 3.8.1 of the notebook which list was expanded from year to year as seen from the table set out above and that the descript ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot alter the fact of policy which according to Mr. Sridharan is effective from 1st April, 2004. He further submits, apropos that the different dates of export which benefits will be admissible, namely, the date of 1st April, 2004 being commencement of the policy in licensing year 2004 and 1st April, 2007 the date from which the Respondents have now conceded such benefits to the Petitioners is discriminatory and violative of Article 14. No such cutoff date of 1st April, 2007 can be prescribed when policy came in effect from 1st April, 2004 and the general description of Mentha (Japanese Pudina) Mentha Arvensis (which included final value added products under Product code 11.111, 11.112 and 11.113) could be imposed. He thus challenges the imposition of cutoff date as arbitrary. 18. Mr. Sridharan contended that the plant Mentha Arvensis has no export potential at all. He further submitted that farmers themselves extract the oil from Mentha in crude form which itself has no export market. The Petitioners purchase this crude oil which is thereafter processed. The process involves purification of raw Mentha oil till value added product is made. 19. Mr. Sridharan also relied upon th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as a whole. 21. Mr. Desai then sought to rely upon meaning of mentha arvensis to mean mentha plants which grew in fields . He therefore submitted that the expression mentha arvensis mentioned in the policy refer to plant and not value added product which were subsequently notified by way of clarification that with effect from 1st April, 2008 eligibility for effect from 1st April, 2007. Mr. Desai further submitted that from the shipping bills enclosed by the Petitioners along with the letter dated 8th December, 2008 addressed to Joint Director General of Foreign Trade the Petitioner had sought benefits by describing the product exported under the heading item description Mentha, Japanese Pudina, Linn, Mint, Pudina. This according to Mr. Desai was misrepresentation since the plant was not what the Petitioners actually exported. On this basis the Respondents submit that the Petitioners are not entitled to relief in the petition and that effect of policy can only be availed from 1st April, 2007. 22. We do not propose to enter upon this controversy as it is not necessary to do so for the purposes of these petitions, apart from being drawn into considering disputed factual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Value Added Extract of following Herbs Sr. No. VKGUY Product ITC HS Code Description of Herbs Date of export from which benefits will be admissible Botanical Name Other names (1) --- --- --- --- - (2) --- --- --- - - (3) --- --- - - - (111) 11.111 - Menthol BP/USP 1-4-2007 (112) 11.112 Menthol Crystal BP/USP 1-4-2007 (112) 11.113 Menthol Oil IP 1-4-2007 (113) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d other plants are classified under product-12.11 and he relied upon the explanatory note issued for Harmonized Commodity Description and Coding System. He contended that mint was included as that part of plant and it included mint of all species. Mr. Desai also relied upon the order dated 9th August, 2011 passed by the D.G.F.T. on remand by this Court wherein the D.G.F.T. considered the Petitioner s case that the export of menthol is covered under entry at serial No. 432 bearing product code No. 08.432 with the description of Mentha Arvensis, Linn (Mint, Pudina) . 29. Suffice it to say that the Jt. D.G.F.T. held that such export product is not covered under this entry and even though in respect of some applications, had granted export benefit, after the issuing clarification by policy circular dated 28th February, 2006, recovery had been initiated. The issue before the D.G.F.T. was only to decide as to whether the product exported by the petitioner is eligible for grant of export benefit as on that day and up to 1st April, 2007. The Petitioner had then pleaded that Mentha in its natural form is not exported neither is it exportable in that form and, therefore, the intention wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by product code 11 and were undoubtedly, different from those covered by product code 08.106, 08.432 and 08.438. In addition, even within product code 11, we find different kinds of Mentha derived product. For instance, 11.114 refers to Menthone, 11.115 refers to Menthol liquid 11.116 refers to Mint Blend, 11.117 refers to Peppermint oil, 11.118 refers to Rectified peppermint oil, 11.119 refers to Spearmint, 11.120 refers to Cornmint oil, 11.121 refers to Dementholised peppermint oil and 11.122 refers to value mint, all of which qualified for benefits effective from 1st April, 2007. It is, therefore, not possible to accept the petitioners contention that their product qualified even earlier to their inclusion in product code 11. 32. In the result, the challenge to policy circular dated 28th February, 2006 on the ground that the effective date is to be treated as 1st April, 2004 and not 1st April, 2007 fails. The Petitioners will not be entitled to benefits of the Yojana from 1st April, 2004 till 31st March, 2007. Writ Petition No. 9308 of 2011 is dismissed with no order as to costs. 33. In the case of Writ Petition No. 9412 of 2011, the petitioners were concerned with the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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