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TMI Blog2025 (1) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the text as well as context, without inflicting violence on the policy objective. Master Circular on Export Credit - The Master Circular is explicit in terms of its purpose and objective. The Master Circular seeks to make short-term working capital finance available to exporters at internationally comparable interest rates . The crux of the Master Circular is that export credit at competitive interest rates must be made available to exporters in the form of short-term working capital. The very same Master Circular requires banks to keep a close watch on the end-use of funds advanced and to ensure that the credit supplied at special rates under the Master Circular are genuinely used for the purposes of exports. Crux of the Master Circular is that the maximum period of the export credit would be 360 days (extended to 450 days); one of the multiple means of liquidating it may be used; and the exports so financed would need to be performed within 360 days (extended to 450 days). Within such period, if the exports financed have indeed materialised, banks may purchase the export bills or discount the export bills, and thereby adhere to the period, simply converting the pre-shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e First Lot, HDFC Bank was justified in reversing the subvention amount applicable to the exports underlying the Second Lot. We are unable to agree with Mr. Sridharan, who moulded his argument to submit that as and when the export eventually took place, at least the subvention for the first 450 days ought to be available. Principle for Drawing a Line - The controversy is only about whether the export documents should be submitted within 450 days and whether the exports should materialize within 450 days. We have articulated above that in our view, considering the objective of the Master Circular, the core requirement is for exports to have materialised within 450 days and the export documents evidencing the same ought to be submitted. If the export documents, even if submitted later, demonstrate that the exports indeed took place within 450 days, the fact that they were filed a few days late would not be fatal. One would be compelled to hold that the First Lot reasonably falls on the right side of the line. However, where not only have the exports not taken place at all within 450 days, but also the exporter himself has foreclosed the export credit within the 450-day period stating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning to the First Lot within a period of four weeks from the date this judgement is uploaded on this Court s official website; j) Consequently, the RBI and the Ministry of Commerce and Industry shall reimburse HDFC Bank with the funds that correspond to the subvention reversal in relation to the First Lot having been corrected as above; k) HDFC Bank shall within a period of four weeks from today, provide to the Borrower, a detailed statement of account and the computation of the manner in which it has worked out the dues owed and owing between them, in accordance with the declaration of the law in this judgement; l) There shall be no change to the reversal of subvention in relation to the advances made in connection with the Second Lot. - B.P. COLABAWALLA SOMASEKHAR SUNDARESAN, JJ. For the Petitioners: Mr. V. Sridharan, Senior Advocate, a/w Gopal Machiraju, Krusha Maheshwari, Ruchi Wagaralkar, i/b Sriram Sridharan, Advocates. For the Respondent No. 2-UoI: Mr. Y.R. Mishra, a/w Upendra Lokegaonkar, Shailendra Y. Mishra, Advocates. For the Respondent No. 3: Mr. Prasad Shenoy, a/w Parag Sharma, Aditi Pathak, Vijay Salokhe, Kirti Ojha, Megha More, Ankit Upadhyay, i/b BLAC Co., Advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther 90 days was allowed, which would lead to the permissible period expanding from 360 days to 450 days. At the time of the original sanction of the advances, and at disbursement, differing tenures had been envisaged between the parties, but the period of the credit was extended to the maximum permissible limit under the Master Circular. For all purposes of adjudicating this Petition, the maximum period applicable under the Master Circular is 450 days (instead of 360 days) and inter-changeable references are made. 6. At the heart of the dispute is the interpretation of one paragraph and its implication for the entire Master Circular. It is placed in the section that deals with tenure of pre-shipment credit Paragraph 1.1.2 (ii), reads thus:- (ii) If pre-shipment advances are not adjusted by submission of export documents within [360] 1 days from the date of advance, the advances will cease to qualify for prescribed rate of interest for export credit to the exporter ab initio. [Emphasis Supplied] 7. HDFC Bank has argued that in view of the aforesaid paragraph, whether exports took place within the said timeframe and whether the export credit was redeemed within the said timeframe a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Rs. ~3.52 crores). 11. According to the Petitioners, in sharp contrast, under the Master Circular, there is no requirement at all for exports to materialise within 450 days the only requirement is that the exports must actually materialise at some point of time. It was their submission that where the exports have materialised within 450 days, the exports documents could be supplied eventually without having to be given within 450 days. The Petitioners would go a step further and submit that even where exports have not materialised within 450 days, but eventually materialise thereafter, the benefits of the Subvention Scheme ought to be available for the 450-day period. 12. For reasons recorded in this judgement, we disagree with the Banking Ombudsman and HDFC Bank in relation to the reversal of subvention for export credit towards the First Lot. We disagree with the Petitioners in relation to the Second Lot. We find their respective positions that are contrary to our findings, unreasonable and arbitrary. In our opinion, for the reasons articulated in this judgement, the Master Circular, which is aimed at providing competitively-priced working capital to help Indian exporters compet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b the subvention provided for the 450-day period (the maximum period of entitlement for the subvention). However, HDFC Bank charged penal interest of 2% for the period of the credit beyond 450 days. It is common ground that the export documents demonstrated that the underlying exports had been made within the permissible 450-day period, although these export documents were delivered to HDFC Bank after the expiry of 450 days. This is the First Lot of export orders about which the Borrower is aggrieved; f) HDFC Bank was also the Authorised Dealer under the Foreign Exchange Management Act, 1999 ( FEMA ), through whom the export realisation was effected by the Borrower; g) On February 14, 2022, the Borrower wrote to HDFC Bank stating that certain exports were delayed beyond the 450-day period for reasons outside its control. The Borrower expressed its desire to foreclose the export credit outstanding and liquidate the fixed deposits lying as cash collateral against such credit. None of the export credit advances had run the course of 450 days. This is the Second Lot of export orders about which the Borrower is aggrieved; h) On February 24, 2022, the Borrower expressed its desire to for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the subvention reversal in the sum of Rs.3.52 crores be corrected; n) On May 26, 2022, a complaint was filed by the Borrower with the Banking Ombudsman against the two subvention reversals in respect of the First Lot and the Second Lot; and o) The Banking Ombudsman passed an order dated October 13, 2023 ( Impugned Order ) rejecting the Borrower s complaint, and endorsing the position canvassed by HDFC Bank, namely, that the export documents ought to be filed within the time limit of 450 days, failing which the credit would cease to be export credit. 14. Against this backdrop, this Petition has been filed assailing the Impugned Order as being arbitrary and unreasonable. Contentions and Submissions of Counsel: 15. We have heard the Learned Counsel for the parties at significant length Mr. V. Sridharan, Learned Senior Counsel on behalf of the Petitioners, Mr. Prasad Shenoy, Learned Counsel on behalf of the RBI and Mr. Mustafa Doctor, Learned Senior Counsel on behalf of HDFC Bank. 16. Mr. Sridharan essentially submitted that the fundamental requirement of the Master Circular was that the export should materialise, and that there was no firm mandatory deadline under the Master Circula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Master Circular imposes an over-arching and clear requirement that not only the export credit ought to have been liquidated in 450 days, but also it ought to have been done in the manner stipulated i.e. by submission of export documents within 450 days. He would submit that the Master Circular had made a conscious choice of words in requiring that the export credit ought to be adjusted by submission of the export documents within 360 days from the date of advance . 19. Mr. Doctor would submit that the credit extended would ab initio have to be treated as normal domestic credit and not as export credit since the export documents were not delivered within 450 days. When asked if HDFC Bank s stance would remain the same even if the documents submitted a few days late indeed demonstrate that exports were truly effected within 450 days of the advance, Mr. Doctor would submit that HDFC Bank had to follow the stipulation spelt out in Paragraph 1.1.2 (ii) without any room for reading it down or extrapolating it. He would emphasise that the Master Circular was a regulatory directive under the Banking Regulation Act, 1949 ( BR Act ) and it was as good as subordinate law, and consequently, HD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Subvention Scheme, are both instruments of law that seek to implement the stated economic policy objectives. It is not drafted by legislative draftsmen who would draft subordinate law that would be tabled for review by the legislature, but by regulatory and government officials, seeking to propound a bundle of incentives and disincentives to further the State s policy choice. Therefore, when such instruments fall for interpretation, they ought to be read purposively, contextually, and in a manner that has due regard to the text as well as context, without inflicting violence on the policy objective. If more than one view is possible in interpreting such instruments, the interpretation that would further the object and suppress the mischief sought to be addressed by them, is the one that Courts should adopt. 24. In our view, these two instruments would need to be interpreted not only with an inter-textual reading (whereby the consequence under one instrument would have implications for the other) but also with an intra-textual reading (whereby the concepts covered by various portions within each instrument would draw their meaning by necessary regard to other portions of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest rate for export credit is special and cheaper, and that rate is not available for normal credit. 28. For clients having a good track record, banks are also permitted to accept redemption of the pre-shipment credit from proceeds of any other export order relating to the same commodity. Such credit may be marked off with proceeds from exports for which no pre-shipment credit has been drawn from any other bank, or by ensuring that proceeds of exports on which other pre-shipment credit had been availed of, are used to liquidate the other pre-shipment credit as well. 29. The RBI has recognized that since the availability of raw material could be seasonal in character, time taken for the manufacture and shipment of goods could be longer than the delivery schedule under the export orders. Therefore, the exporter may have to procure raw material and manufacture products, in anticipation of potential export orders from customers. Therefore, the Master Circular envisages provision of a running account facility 5 . For such facility, the banks must not insist on prior lodgment of the export orders for the pre-shipment credit to be disbursed. Running account facility can only be gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of time to be decided by the banks. (c) Banks should mark off individual export bills, as and when they are received for negotiation / collection, against the earliest outstanding pre-shipment credit on 'First In First Out' (FIFO) basis. Needless to add that, while marking off the pre-shipment credit in the manner indicated above, banks should ensure that export credit available in respect of individual pre-shipment credit does not go beyond the period of sanction or 360 days from the date of advance, whichever is earlier. (d) Packing credit can also be marked-off with proceeds of export documents against which no packing credit has been drawn by the exporter. (ii) If it is noticed that the exporter is found to be abusing the facility, the facility should be withdrawn forthwith. (iii) In cases where exporters have not complied with the terms and conditions, the advance will not be treated as export credit ab initio. (iv) Running account facility should not be granted to sub-suppliers. [Emphasis Supplied] Subvention Scheme: 31. The Subvention Scheme entailed the Government of India subsidising Indian Rupee-denominated export credit advanced in conformity with stipulated c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interests of depositors or banking policy so to do, it may determine the policy in relation to advances to be followed by banking companies generally or by any banking company in particular, and when the policy has been so determined, all banking companies or the banking company concerned, as the case may be, shall be bound to follow the policy as so determined. (2) Without prejudice to the generality of the power vested in the Reserve Bank under sub-section (1), the Reserve Bank may give directions to banking companies, either generally or to any banking company or group of banking companies in particular, as to-- (a) the purposes for which advances may or may not be made, (b) the margins to be maintained in respect of secured advances, (c) the maximum amount of advances or other financial accommodation which, having regard to the paid-up capital, reserves and deposits of a banking company and other relevant considerations, may be made by that banking company to any one company, firm, association of persons or individual, (d) the maximum amount up to which, having regard to the considerations referred to in clause (c), guarantees may be given by a banking company on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective of the Master Circular is to provide short-term working capital. The maximum period (360 days, extended to 450 days due to impact of the Covid-19 pandemic) has been consciously chosen as the designated period to make this a window for providing short-term working capital. With this context in mind, it would be important to examine various ingredients of the Master Circular. 36. There is no doubt that Paragraph 1.1.2 deals with the maximum period of the advance and in doing so, it refers to adjustment of the advances in 360 days. However, HDFC Bank has argued that this is a provision that would ensure that even for these 360 days, the credit would not be export credit, despite exports actually having been achieved and despite proceeds having been realised (all within 360 days) if there is a delay of even one day beyond 360 days in submission of export documents that prove these facts. By necessary implication, according to HDFC Bank and the Banking Ombudsman, if the export is effected on the 360th day and proceeds are realised on the same day, but it takes a day more to compile the documents, the financing would simply stand disqualified for coverage as export credit under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of adjudicating this Petition, we have treated the period of three months as 90 days and maintained the reference to one year as 360 days and conservatively adopted the period of 450 days as the maximum permissible period of export credit. 40. The Master Circular also makes it clear that export credit and pre-shipment credit may be liquidated out of the export bills being purchased or discounted by the bank, thereby converting the pre-shipment credit into post-shipment credit. As noted earlier, even balances lying in the EEFC Account could be utilized for pre-paying or re-paying the export credit. Indeed, rupee resources of the exporter to the extent such resources are proceeds of exports that had actually taken place could also be used for repaying the export credit. 8 It is also evident that under the running account facility 9 , it was provided that pre-shipment credit could be marked off on a first-in-first-out basis in the manner described earlier in this judgment. So also, the Master Circular also envisages that where an exporter has been granted accommodation against cheques and demand drafts and other payment instruments received from abroad at normal commercial in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at exports must take place within 360 days, which is what the export documents would have to evidence. There is no intelligible differentia on the treatment of the loan as export credit, on the basis of the currency denomination. When export documents are referred to in the language of Paragraph 1.1.2 (ii), it is evidently to demonstrate that exports have indeed taken place. When Paragraph 5.5 refers to exports having taken place, it is aligned with the same objective. As stated earlier, while the Master Circular is a regulatory instrument, it is a policy document that is not drafted by legislative draftsmen, but by regulatory officials. The most commonsensical, reasonable and logical meaning ought to be given to its contents in a manner that furthers the regulatory objective of the instrument. 43. In our opinion, to hold that Paragraph 1.1.2 (ii) of the Master Circular mandates that despite exports actually having materialised within 450 days and regardless of the proceeds being realized, even one day s delay in submission of the export documents would be fatal to the very status of export credit , inflicts serious violence to the very policy objective of the Master Circular. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed pointer that the crux of the Master Circular is that the maximum period of the export credit would be 360 days (extended to 450 days); one of the multiple means of liquidating it may be used; and the exports so financed would need to be performed within 360 days (extended to 450 days). 46. If one were to treat the submission of export documents no later than the 360th day as an all-consuming essential requirement that renders meaningless the performance of all the other obligations, instead of looking to the substance of what the export documents are meant for (to prove that exports indeed took place within 360 days), the very policy objective of the Master Circular would be turned on its head and be grossly undermined. From a conjoint intra-textual reading of the Master Circular and its various provisions, as articulated above, in our opinion, it is when exports do not materialise within 360 days, that the domestic lending rate coupled with the penal interest would become applicable to the amounts advanced. The reference, twice, to the requirement of submitting export documents within 360 days (first in Paragraph 1.1.2 (ii); and next in Paragraph 4.2.2 (ii) of the Master Circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd spirit so as to bring about a perceptible improvement in credit delivery and related banking services to the export sector. Therefore, the Master Circular leaves no room for doubt that a robotic and literal reading of one sentence from the Master Circular in a manner that undermines the very regulatory objective of the Master Circular must be shunned. The Master Circular enjoins that its provisions must be read in the spirit of the document and not just in a literal manner. The instrument is indeed a beneficial regulatory instrument and it is envisaged that situations may emerge which would require the spirit to be invoked in its implementation and administration. 49. The spirit of the Master Circular is evident from the terms noticed above that short-term working capital must be made available at competitive rates in a timely manner to exporters. Such export credit must not exceed the maximum period of 360 days (extended to 450 days). Within such period, if the exports financed have indeed materialised, banks may purchase the export bills or discount the export bills, and thereby adhere to the period, simply converting the pre-shipment credit into a post-shipment credit (which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Paragraph 1.1.2 (ii), ignoring the scheme emerging from various other provisions referred to above, HDFC Bank has sought to erode the very status of the credit advanced by arguing that it had ceased to be export credit . 53. It is reasonably evident to any reader of the material on record that HDFC Bank had indeed adopted the correct approach in October 2021, when it reversed the subvention benefit only for the period after the expiry of the maximum permissible tenure of export credit. It is only on April 20, 2022, that HDFC Bank developed second thoughts on the subject and purported to read Paragraph 1.1.2 (ii) as an entitlement to treat the entire advance as not constituting export credit for the entire period. It is truly noteworthy that even at this stage, HDFC Bank did not charge the domestic lending rate for the entire period despite purporting that the advances were not export credit at all right from their disbursement. If HDFC Bank s argument that the phrase ab initio used in Paragraph 1.1.2 (ii) is to be read as simply disqualifying the credit as export credit, the natural corollary would be that such credit would have to be treated as normal domestic credit. Indeed, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the presence of a valid return, the procedural aspect referred to can well receive a liberal construction . In the present case, he points out, there is no dispute that the returns filed by the assessee were valid. In fact the assessments have been made on the basis of the returns filed. The tax has been paid even before the submission of the returns. There is no suggestion that the tax paid fell short of the tax due on the return. This is also not a case where the assessed tax is much higher than the tax admitted on the basis of the returns. In these circumstances, he argues, the assessee must be held to have fulfilled the conditions prescribed in Section 15. 9. Learned counsel for the assessee referred to certain decisions in support of such a rule of construction. In CIT v. Kulu Valley Transport Co. Pvt. Ltd. the court had to construe a provision intended to benefit the assessee. Under Section 22 (2-A) of the Income Tax Act, 1922, a return of loss had to be filed within the time prescribed for return under Section 22(1) if the assessee wanted to carry forward the loss claimed. It was not so filed but was nevertheless treated as a valid return by reading the provisions of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a manner that erodes the very purpose of the statutory instrument should always be avoided. 56. In the result, we hold that the advances that financed the exports forming part of the First Lot clearly constitute export credit and are fully eligible for the subvention under the Subvention Scheme. Any subsequent period of the credit before its redemption i.e. the period of delay in submission of the export documents after the expiry of the maximum period of export credit, would be the period for which the Borrower enjoyed subvention despite the expiry of the maximum permissible period under the Master Circular. The Subvention Scheme is very clear that the subvention would be available only until the date on which the export credit becomes overdue. Reversal of any subvention for such period of delay would be a natural requirement, and we hold that HDFC Bank s first reaction on October 4, 2021 i.e. of reversing the subvention only for such delayed period was the correct approach that would get support under the Master Circular. HDFC Bank must compute the precise period of delay under each of the underlying exports and charge and effect the reversal of the subvention only for such pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing. 60. It is another matter that the Borrower hedged its stance by stating that it would eventually provide export documents as and when they materialise, and that the subvention ought to be kept available to the Borrower. That would not further the case of the Borrower since even such a request is untenable for the reason that although the 450-day period had not expired in relation to any of the export orders in the Second Lot when the export credit was foreclosed, even thereafter, the exports did not materialise at all within the 450-day period. With no subsisting credit continuing after February 24, 2022, and no export having materialised within the 450-day period, there is no occasion to monitor and keep examining if the exports actually materialised at an even later date. We are conscious that these exports indeed materialised eventually. However, that is of no consequence for interpreting the Master Circular, which has picked a specific period (360 days, extended to 450 days) as the maximum period for which export credit assistance is to be provided. We have already explained above that if the exports are not effected within the stipulated period, there would be no question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his argument to submit that as and when the export eventually took place, at least the subvention for the first 450 days ought to be available. Principle for Drawing a Line: 64. Before parting with the matter, we must mention that in the course of the hearing, we had requested the counsel for the parties to address us on where one should draw the line on the period of delay both in terms of delay in submitting the export documents and in terms of delay in effecting the exports. To deal with the issue, Mr. Sridharan would draw reference to a judgment of the Supreme Court in Collector of Central Excise, New Delhi Vs. Ballarpur Industries Ltd. (1989) 4 SCC 566 to state that it is neither necessary nor wise to enunciate principles of any general validity that should cover all cases. According to him, the Court must examine the facts of each case before it and rather than drawing a line of demarcation, the Court should decide which side of a border-line, the case before the court would fall in. The following extracts in the judgment are noteworthy : 19. We are afraid, in the infinite variety of ways in which these problems present themselves it is neither necessary nor wise to enunciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a few days late would not be fatal. One would be compelled to hold that the First Lot reasonably falls on the right side of the line. However, where not only have the exports not taken place at all within 450 days, but also the exporter himself has foreclosed the export credit within the 450-day period stating that it is unlikely to be completed within the period, we have no hesitation in holding that Second Lot does not reasonably fall on the right side of the line. Other Case Law Cited: 67. Mr. Doctor would rely on a Five-Judge Bench judgment of the Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company and Others (2018) 9 SCC 1 (Dilip Kumar) to submit that if there is an ambiguity in a tax exemption provision then the interpretation must lie in favour of the Revenue, which is the direct opposite of the rule of interpretation for charging provisions, where ambiguity in the provision must be interpreted in favour of the Assessee. However, the Supreme Court has hastened to explicitly clarify, in Dilip Kumar, that even when interpreting exemption provisions, the Court has to distinguish between conditions that require strict compliance to avail of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ypically seen as a fiscal measure. However, what falls for interpretation in the instant case is not the Subvention Scheme so much as the interpretation of the Master Circular. By interpreting the Master Circular in the manner it has, HDFC Bank has sought to hold that the credit advanced to the Borrower got disqualified from being export credit . Based on such disqualification, HDFC Bank would extrapolate such interpretation into determining the implications under the Subvention Scheme, to reverse the subvention provided. However, there is no ambiguity that emerges from the Subvention Scheme that requires adjudication in this Petition. What falls for interpretation is the Master Circular, which its own authors have mandated must be interpreted and implemented in letter and spirit. 69. If anything, Clause 2(A)(iii) of the RBI Circular on Subvention makes it clear that the subvention benefit would only be available from the date of disbursement until the date of repayment, or the date beyond which the export credit become overdue. The necessary implication of the aforesaid provision in the RBI Circular on Subvention is that the benefit under the Subvention Scheme would be available f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the subject/assessee and it must be interpreted in favour of the Revenue. 66.3. The ratio in Sun Export case is not correct and all the decisions which took similar view as in Sun Export case stand overruled. 26. It may be noticed that the five-Judge Bench judgment did not refer to the line of authority which made a distinction between exemption provisions generally and exemption provisions which have a beneficial purpose . We cannot agree with Shri Gupta's contention that sub silentio the line of judgments qua beneficial exemptions has been done away with by this five-Judge Bench. It is well settled that a decision is only an authority for what it decides and not what may logically follow from it (see Quinn v. Leathem as followed in State of Orissa v. Sudhansu Sekhar Misra, SCR at pp. 162-63 : AIR at pp. 651-52, para 13). 27. This being the case, it is obvious that the beneficial purpose of the exemption contained in Section 3 (1) (b) must be given full effect to, the line of authority being applicable to the facts of these cases being the line of authority which deals with beneficial exemptions as opposed to exemptions generally in tax statutes. This being the case, a liter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mum permissible period of export credit i.e. during the period of the delay in submitting the export documents, would attract interest at the normal interest rate along with penal interest in terms of the bank s policy (published pursuant to the Master Circular); f) If exports did not materialise within the stipulated period (360 days, extended to 450 days), for purposes of the Master Circular, it would be treated as exports not materialising at all. In such event, the very purpose of providing short-term working capital to finance successful exports would be undermined if the credit extended were to be treated as export credit despite exports not having materialised. Therefore, the credit advanced ought not to be treated as export credit . In our opinion, any other reading of the position would enable contrivances and devices that convert the short-term working capital available under the Master Circular into a long-term or even perpetual supply of cheap credit, abusing the Master Circular; g) Consequently, subvention would be available to the Borrower in respect of the finance provided in relation to the First Lot; h) Subvention would not be available to the Borrower in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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