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2021 (3) TMI 444 - HC - CustomsSEIS Scheme - Validity and legality of Policy Circulars No. 06/2018 dated 22.05.2018 and 08/2018 dated 21.06.2018 - determination of eligibility of service providers for Service Exports from India Scheme (SEIS) to claim benefit to the extent of free foreign exchange earnings - HELD THAT:- In the present case, the petitioner has been granted SEIS benefit / reward in the form of duty free scrips for the financial year 2015-16 by the respondents. For the financial year 2016-17, petitioner's application for seeking benefit under SEIS was pending. In the meanwhile upon representations received from the industry, the impugned circular Nos. 06/2018 dated 22.05.2018 and 08/2018 dated 21.06.2018 have been issued by the respondents - Policy circular No. 06/2018 dated 22.05.2018 states that the actual service providers (and not ports) are eligible for SEIS benefit in respect of their share of earnings made by performing the notified services under the SEIS scheme. Further, the aggregator of services (ports) shall be entitled for benefits under SEIS only for services exclusively rendered by the ports and for which the foreign exchange earnings (or INR payments as allowed under the scheme) are received and retained by them on this account. The port cannot claim benefits to the extent of free foreign exchange earnings (or INR payments as allowed under the scheme) simply routed through it as receipt of service charges with regard to services rendered by other actual service providers. Section 5 of the FT (D&R) Act provides that the Central Government may from time to time formulate and announce the Exim Policy by issuing notification in the official gazette. Thus, it is the Central Government which has power to amend the policy by adopting the procedure as stated in the Act; the power to announce the policy and to amend as such solely remains within the domain of the Central Government and cannot be delegated. It is clear that for any amendment to alter or modify the provisions of FTP 2015-20, the powers are exclusively vested in respondent No. 1 i.e the Central Government in terms of section 5 of the FT (D&R) Act, 1992. In such circumstances we have to examine as to whether by way of the two impugned policy circulars any new conditions or restrictions can be added or read into the FTP or whether respondent Nos. 2, 3 and 6 can add / alter / amend the provisions of the FTP without recourse to exercise of powers conferred by section 5 of the FT (D&R) Act upon the Central Government - By virtue of the two circulars, modification and alteration of provisions of para 3.08(c) of the FTP 2015-20 has been made which stipulates the provisions of deeming INR earning as foreign exchange in terms of the Reserve Bank of India guidelines. Policy Circular No. 8/2018 dated 21.06.2018 clearly overrides the authority of the Reserve Bank of India and an attempt is made to introduce a provision for issuance of a certificate by the petitioner enabling the local domestic service provider, such as, ports to deem their INR billing as in foreign exchange. Such overriding policy decisions in our view would require an amendment in the FTP 2015-20 and as mandated under the provisions of section 5 of the FT (D&R) Act would have to be carried out only by the Central Government. Circular Nos. 06/2018 dated 22.05.2018 and 08/2018 dated 21.06.2018 in so far as they seek to add and amend the provisions of the FTP 2015-20 by inserting additional conditions to curtail the rights / benefits claimed by the petitioner as service provider are ultra vires the Foreign Trade Policy for 2015-20 - Impugned order of refusal dated 25.10.2018 passed by the Additional Director of Foreign Trade, Mumbai cannot be sustained and is accordingly quashed and set aside
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