The High Court held that the Foreign Trade Policy cannot, by ...

Import duty reward incentive scrip interest demand invalid; High Court quashes levy.

December 2, 2024

Case Laws     Customs     HC

The High Court held that the Foreign Trade Policy cannot, by itself, authorize the levy of interest u/s 28AA of the Customs Act, 1962, for the recovery of wrongly availed amounts against duty credit scrips as rewards formulated under the Service Exports from India Scheme. The levy of interest must be supported by plenary legislation. While the Foreign Trade Policy contemplated that if any person is found ineligible for the benefit under any Scheme, the amount would have to be refunded along with interest u/s 28AA of the Customs Act, 1962, the Court ruled that no provision of the Act under which the Foreign Trade Policy has been framed has been pointed out to show that the provisions of Section 28AA have been made applicable for levying interest on any person who is found ineligible for any benefit received under the terms of any Scheme under the Foreign Trade Policy. Consequently, the petitioner succeeded, and the writ petition was allowed by the High Court.

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