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2019 (8) TMI 1006 - HC - CustomsRejection of benefits of duty credit scrips available under the Merchandise Exports from India Scheme - suspension of IES (Import Export Code) No.3115905611 - Whether the petitioner is entitled to the benefit of MEIS scheme for exports made through FTWZ, when it is not a unit in FTWZ? HELD THAT - It is evident from the impugned communication dated 18th July, 2019 of the Deputy Director General of Foreign Trade, issued with the approval of respondent no.3, that it does not take into account the clear words of 3.06(vii) of the FTP which excludes only exports made by units in FTWZ. In this case, the petitioner's contention is that it is not a unit in FTWZ but a unit in DTA. Therefore the exports in this case was not by unit in FTWZ but by a DTA unit. This aspect has not been considered at all in the impugned communication dated 18th July, 2019. The communication dated 18th July, 2019 and direct the respondent no.3 Director General of Foreign Trade to examine this issue in the context of the petitioner's claim is set aside - petitioner to make a fresh representation about its claim for the benefit of paragraph 3.06 of the FTP to the respondent no.3 the Director General of Foreign Trade who would consider the same and pass appropriate order thereon. This it would do as expeditiously as possible and preferably within 12 weeks from the date this order is uploaded on the High Court website - petition disposed off.
Issues:
Challenge to rejection of application for benefits under MEIS scheme and suspension of IEC without hearing or reasons provided. Interpretation of FTP provisions regarding MEIS benefits for exports through FTWZ by a DTA unit. Analysis: 1. The petition challenged the rejection of the petitioner's application for benefits under the Merchandise Exports from India Scheme (MEIS) and the suspension of the Import Export Certificate (IEC) without following principles of natural justice, as no hearing or reasons were provided for the actions taken. 2. The Deputy Director General of Foreign Trade informed the petitioner that it would not be entitled to MEIS benefits due to supplies made from Domestic Traffic Area (DTA) units to Free Trade Warehousing Zones (FTWZ) being excluded under the Foreign Trade Policy (FTP) provisions. The petitioner amended the petition to challenge this communication. 3. The petitioner, engaged in exporting telecommunication equipment and fiber optic cables, claimed entitlement to MEIS benefits for exporting goods through FTWZ, not by a unit in FTWZ. The FTP 2015-20 listed categories excluded from MEIS benefits, including exports made by units in FTWZ. 4. The Joint Director General of Foreign Trade rejected the petitioner's claim for duty credit scrips under the MEIS scheme, leading to the suspension of the IEC. The petitioner challenged these actions, leading to the current legal proceedings. 5. The High Court noted that the communication from the Deputy Director General did not consider that the petitioner was not a unit in FTWZ but a DTA unit, and therefore, exports were not by a unit in FTWZ. The Court set aside this communication and directed the Director General of Foreign Trade to re-examine the issue. 6. The Court also set aside the four impugned orders dated 25th October, 2017, pending the Director General's ruling on the interpretation of the FTP provisions. The Joint Director General was directed to dispose of the petitioner's application in accordance with law, giving a personal hearing before deciding adversely on the MEIS scheme claim. 7. The judgment clarified that the interpretation of FTP provisions by the Director General would bind all authorities under the Foreign Trade Development and Regulation Act. The petitioner was given the opportunity to make a fresh representation for MEIS benefits, to be considered expeditiously within a specified timeframe.
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